The pandemic has had a significant effect on the entire partner ecosystem – vendors, partners, and customers alike. Some impacts were sudden, whilst others have continued to develop over time, changing the course and reshaping the future for organisations as they now look to embed sustainable changes over those they reacted to before.
The degree of these impacts also vary considerably between industry sectors as some continue to thrive, whilst others are still continuing to struggle.
While this might sound counterintuitive, the pandemic has actually increased business for the partner ecosystem, not decreased. The bulk of our partners have experienced significant business growth year over year. I believe this stems from two primary factors.
Firstly, there was an evolving trend away from the legacy of the last recession, where customers have been stagnated by process and centralised control driven by cost and operational efficiency. We’ve now seen a move towards a more agile play into new markets and growth opportunities - underpinned by increasing digital behaviours.
Secondly, the impacts of the pandemic have accelerated some of these transformations forcing customers to reach out to their partners for help. This has worked well for some partners and helped in accelerating their own transformation and presenting richer opportunities for them to add value to customers more at a business level. The varied ability of some partners and investments in skills has also started to pay off, enabling choices over simply reselling of technologies.
The reality is that customers are demanding more flexibility in order to meet future variations in demands, which are also less predictable. The optimal way to do that is as a service especially for those organisations below large enterprises, where it simply becomes easier to ‘buy’ a service rather than ‘make’ your own solution.
But this creates two diverging opportunities where simplicity drives a more commoditsed model and a trend towards market places, whilst others look for business value in solving more complex issues that still require a comprehensive solution but still within the ‘as-as-service’ model.
This creates an interesting challenge for all partners when they consider the development of future value propositions, while still looking for new growth and sales pipeline. The future of hybrid work and the application of DaaS plays straight into this sweet spot today. This chimes with the volume lower margin reselling model over development of the partner’s own as-a-service propositions.
As we enter this new phase, above all, organisations are demanding flexibility – in the way work gets done, where and when it gets done, and even in the technology used to empower this new way of working. As a result, we’re seeing significant growth in the as-a-service business model.
In my conversations with partners, I consistently hear that the biggest shift in demand is the increase in the number of customers asking for operational and technological flexibility. They want to purchase things as-a-service and have the flexibility of a more utility-like model.
Evolution
What’s behind this drive among partners to hosting services and offerings? I think it boils down to a few things. First, and as stated previously it’s clear that uncertainty has been a key factor. In addition, technology has now caught up to the as-a-service model that we’ve become used to in so many other facets of life. As a society, we have become used to consumption models and pricing.
Many industries such as retail have operated these models for some time now as consumers for example have realised this model makes sense and fits their needs. Now it’s evolving into the business technology space and customers are looking at vendors and partners demanding that they only want to pay for what they use at the point they use it.
Again this was amplified during the sudden impact of Covid with organisations having to urgently meet the needs of flexibility and agility to scale up and down and to pivot in uncertain times.
As the world continues to evolve, I expect to see these consumption and service-based models continue to gain prominence. This evolution will require transformation on the part of the partner as well as the vendors.
New normal
Looking ahead, I predict this will be a significant learning year for partners as they find their place in this new landscape. But there is still some concern and hesitancy in the partner community that they don’t know what their optimal role is in a changing landscape. In fact they are as affected as the customers they are endeavouring to serve.
I anticipate that there will be a shift in customer focus and as Covid has forced many customers into a reactionary mode to quickly pivot and find immediate solutions – even if they were intended to be short-term.
Two years in, there’s a shift toward building a strategy for a sustainable business in the “new normal,” and one which anticipates the unexpected. In many instances, economics have a funny way of balancing things out. Within most as-a-service industry models a premium is paid for flexibility and lower costs are associated with longer term commitments.
Whatever the model, it’s imperative the right level of flexibility is provided to suit the end-customer, their business and their objectives, in such an uncertain and dynamic economic landscape.
This feature appeared in our June 2022 print issue. You can read the magazine in full here.