Vendors Say They Want to Empower Partners to Invest in Services, But What Do They REALLY Want?

April 6, 2011 at 9:34 pm Leave a comment

With Service Delivery being where the margins and customer loyalty lock-down are, vendors are finding it difficult to promote autonomous services delivery for their solution providers.

by Beth Vanni, Vice President

It’s no surprise that vendors have considered increasing partner sales competency the #1 vendor priority for the last several years. Market penetration is essential for long-term growth, and well-connected self-sufficient channel partners make for strong allies. What is interesting, however, is that while vendors consider autonomy an asset in their channel partners and consistently indicate a goal of applying enablement resources to drive partners’ overall competency, they indicate just the opposite when it comes to services delivery.  The results of our 2011 State of Partnering Study reveal that while solution providers are increasingly desirous of services delivery autonomy, vendors are increasingly focused on closer engagement through sharing tools, co-sale mentoring and co-delivery.

In order to tether their providers to their products, the sharing of IP and methodologies is on the rise, as is service provider certification on delivery skills.  Nearly one third of our vendor respondents indicated they would be sharing their services IP and methodologies with their partners.  While these types of activities are helping foster critical partner knowledge, they are still fostering strong co-delivery dependencies. As evidence — while over 30% of vendors indicate that they are working to help their partners build their own services, over 60% of vendors are still invested in a services structure that favors partner delivery of vendor solutions, or a co-sell and co-delivery scenario.

The longer term question remains — can vendors who are pushing solution providers towards more autonomy in value-based selling, truly expect to reign these same partners into a shared services engagement model? — or even more extreme, into a role of acting as a sales agent for the vendors’ own professional services delivery staff.   Although the majority of vendors in our study indicate using partners as sales agents for their services is on the decline in favor of higher levels of partner engagement, until this year it has remained the #1 engagement model between vendors and their services partners.

Henry Ford said, “A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.” Solution providers and vendors are both well-aware of service delivery’s profitability potential as well as its importance in securing long-term customer relationships.  Yet by recent statistics from Consulting Magazine, many leading consulting firms (including the professional services divisions of larger IT manufacturers) have seen their utilization rates and fee structures take a beating over the last several years of economic turbulence.

Isn’t this the ultimate wake-up call for vendors to divest of professional services beyond services for only their most strategic customers?

You can access the Executive Brief of Amazon Consulting’s 5th Annual State of Partnering Study at here.  This is THE most comprehensive analysis of the IT vendor community’s plans and priorities for their channel partners.  The complete report is available for free to all subscribers of the Amazon Consulting PartnerG2 market intelligence subscription service.  For full details go to


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Can’t Live with ‘Em, Can’t Live Without ‘Em: Brand-Franchise Channel Partnerships: Who Do End-to-End Solutions REALLY Benefit?

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