Fps Channel Insights Research Highlights 2011

Channel Insights 2010 ResearchResearch fieldwork conducted by Gorilla Corporation

Presentation & analysis by Fox Parrack Singapour

Channel Insights 2010 Research

© 2011 Fox Parrack Singapour & Gorilla Corporation. All rights reserved.Page: 2

The contextFor many, if not most, technology vendors, the channel has become an increasingly

significant element of their go-to-market plans. The massive potential of a motivated

and equipped partner channel to provide greater market coverage and greater customer

touch, when compared to the costs and limitations of a direct touch internal team, is a

compelling proposition for any management team. And the tough economic pressures of

the last few years have only proved to underwrite the logic of that particular argument.

In simple terms, the channel represents the engine of growth for the tech sector.

So, with this level of importance, an intimate knowledge of the channel would appear to

be a prerequisite for all those with a significant partner-based strategy. The harsh reality

is that in most cases vendors have a limited view of their channel partners – the top tier

may be well known and regularly touched, but the vast majority are thinly understood

and rarely touched. The Pareto rule, which stills seems to apply to most channel

performance measures, is probably the best indicator of the state of play.

The role of Channel InsightsThe Channel Insights research study has been created to fill this gap in knowledge,

to indentify the pinch points that prevent partners from becoming that motivated and

equipped engine of growth, and to provide indicators to vendors for what needs to be

done going forward.

And as a little taster for the full study, the research has uncovered a number of significant

issues that should give those at the driving edge of channel strategy some cause for

concern. I refer to these issues as ‘disconnects’, and a few are particularly troublesome.

The main areas of disconnect revolve around the question of sales and marketing

support provided by vendors and especially the marketing aspects, also accreditation

and, thirdly, the very nature and status of the relationship between partner and vendor.

IntroductionBy David Fox, Chairman of Fox Parrack Singapour



MethodologyBetween November 2010 and the end of January 2011, over 100 UK channel partners

were interviewed on a wide range of issues. These in-depth interviews, often lasting

over 20 minutes, provide both quantitative and qualitative insights into the health

and wellbeing of the UK channel. Respondents were drawn from a cross- section of

the partner community in the UK, providing a representative sample of the channel

landscape.

Importantly, this 2010 survey follows previous Channel Insights research carried out over

several years - the first study was in 2002 – providing trending data to identify shifts in

attitude and behaviour, as well as the progression of the major channel issues.

What turnover did your company achieve last year UK 2010

Less than £250,000 12%

£250,000 - £500,000 14%

£500,000 - £1m 14%

£1m - £2m 13%

£2m - £5m 12%

£6m - £10m 2%

£11m - £50m 11%

£50m+ 5%

Confidential/Non Disclosed 13%

Don’t know 3%

Respondent profiles



Some of the marketing pinch points • Fromourlatestsurvey52% of partners do not have a dedicated marketing

resource - a slight rise from 48% in 2006 and on a par with 2004.

• Just40% of partners now quote a dedicated budget for marketing, down from

57% in 2006, and 47% in 2004. The situation had improved but the positive trend

has reversed.

• There has been a huge rise in the number of partners reporting that marketing

activity is funded ‘from another budget’, up from just 3% to 32%. A good deal is

now funded on a discretionary basis.

• 93% of partners say that they, not vendors, drive marketing activity. Given the

huge vendor investments in Partner Marketing Portals and co-marketing content,

this position indicates that we still haven’t got it right yet!

• 78% of partners surveyed could not name a successful vendor marketing initiative

that they had been involved in.

What sales & marketing support do they NOT want from vendors?When the ’Least useful assistance’ responses are mapped, a major disconnect in the

vendor/partner relationship becomes even clearer.

Top ‘Least Useful’;

1. Help with Marketing Planning

2. Technical Accreditation

3. Technology Training

To underpin the real extent of the picture here, the gap between these top 3 ‘least useful’

and the fourth position (Event support) is significant - more than twice the vote between

third and fourth positions.

The issue of leads• 54%reportreceivingnoqualityleadsonamonthlybasis.

• Almost70%saythattheydonotreceivequalityleadsfromvendors.

• Thiscomparestothenexthighestscoreof1qualityleadpermonthandper

vendor for 7% and 9% respectively. The long tale of more than 1 lead falls

away rapidly.

Key highlights



The Channel Insights research was conceived to indentify pinch points that may prevent

partners from becoming the motivated and equipped engine of growth for the IT

sector. Some of these problem areas are significant and we have referred to them as

‘disconnects’.

From the authors’ perspective, here are two of the most important;

Channel Disconnect 1: The role and value of marketing• #1issuethatconcernspartnersis‘differentiation’buttheydon’tseemarketing

helping this

• Over50%havenodedicatedmarketingresourcesand60%don’thavededicated

marketing budget

• Over90%ofpartnerssaythatthey,notvendors,willdrivemarketinginitiatives

• Majoritynotvaluingvendorassistancewiththeirmarketingplanning

• Majorityfocusonleadprovision,andnotnecessarilyonstrategicgrowth

strategies

Impact:

These factors point to the limited ability for at least 50% of partners to effectively drive

business, beyond a tactical sales approach. A harsher prognosis may question these

businesses’ abilities to actually survive longer term, certainly as the market heats up and

becomes more competitive.

The big disconnects



Channel Disconnect 2: The issue of trust and the relationship value• Partnersareincreasingtheirfocusondirect,especiallyface-to-facecustomer

engagement

• Incontrast,themajorityofpartnersareactivelyshunningdirectvendor

involvement in such activities as events and joint sales visits

• Themajorityofpartnerswantvendorstoprovidethemwithleadsand,to

a slightly lesser extent Coop funding, but they do not want to have any real

collaboration with vendors (e.g. on sales and marketing activity)

• TechnicalAccreditationisnolongerseenasuseful-certainlynotsufficiently

valuable when compared to the cost

• TechnologyTrainingfromvendorsisalsonotseenasuseful

Impact:

When assessing these factors, the conclusion we are left with is that many partners

are adopting a ‘go-it-alone’ attitude. It illustrates ‘supplier’ rather than ‘partnership’

relationships. Indeed, in most scenarios, these are transactional arrangements rather

than relationships and not a firm foundation on which to build a predictable and scalable

‘engine of growth’.

Need more information?A full presentation of the Channel Insights research study and a more comprehensive

report can be made available, please contact the authors overleaf.

The big disconnects



About Fox Parrack SingapourFox Parrack Singapour is Europe’s longest established integrated tech-marketing agency

and has worked with many of the industry’s biggest brands such as BT, BlackBerry, Cisco,

Microsoft,Nortel,Novell,Oracle,Symantec,VodafoneandXerox,aswellasnumerous

emerging technology companies.

FPS delivers programmes covering:

• DemandGenerationandLeadNurturing

• ChannelMarketing

• BrandandProductCommunications

The organisation has over two decades of channel marketing experience, starting with

launch of Frontline/First Software (now C2000) in 1984 and is a founder member of n42,

pan-European network of tech-focused marketing agencies.

Contact: David Fox, [email protected]

About Gorilla CorporationGorilla Corporation is a global organisation that supports Fortune 1000 companies in

business growth and optimisation strategies worldwide.

Gorilla’s specialist skills cover:

• salesandchannelstrategy

• partnerecosystems

• channelprogrammes

• outsourcedfieldsales

• telemarketing&insidesales

Theteam’sexperienceincludesworkingwithIBM,HP,Oracle/Sun,Cisco,McAfee,Apple,

Avaya, Alcatel, BT, Telefonica, Symantec, and Microsoft.

Contact: Carlo Tortora Brayda di Belvedere, [email protected]

The companies behind this report

mailto:[email protected]

mailto:[email protected]



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Fps Channel Insights Research Highlights 2011