how special are specializations?
DESCRIPTION
Specializations are becoming the new table-stakes in value-based channel programs. Their goal? To help differentiate partner value and drive increased competency. But, are specializations considered a distraction to the partner sales and technical certification requirements? Are they a worthy partner investment in long-term skills development and market position? This exclusive channel research explores the perceived value and ROI of channel specialization programs, from both the vantage point of 400 solution providers and 40 vendors. Get answers to these questions: Which type of specialized partners are vendors looking to develop or attract? What are the specialization program requirements and benefits? What ROI are partners expecting on their specialization investment? How does specialization improve the solution providers’ relationship with their customers and vendors?TRANSCRIPT
Amazon Consulting 2011 1
How Special are
Specializations?
Does the Value Warrant
the Investment?
Research - Executive Summary
Amazon Consulting 2011 2
Solution Providers Vendors
Respondents’ Profiles
Annual revenues >$5m (55%)• 50% are regionally focused
VAR and SI are two leading
business models (58%)
Large organizations• 40% >$5b
• 33% >$1-5 b
More heavily software focused• 55% infrastructure software
• 33% applications
N = 34N = 391
Amazon Consulting 2011 5
When are specializations important?
What is the value of specializations?
How do I get partners to invest?
What do the program structures look like?
What are the trends or best practice in specialization programs?
What are the pitfalls to avoid in building specializations?
Amazon Consulting 2011 6
When Are Specializations Important?
Amazon Consulting 2011 7
Trigger Result
Portfolio grows very broad Partners can choose their focus
Channel conflict grows Partner need better differentiation and
ways to establish customer value
Vendor needs to expand marketshare
or enter new markets/verticals
Use specialized partner skills to foster
partner-led selling
Vendor needs to foster field sales
teaming with direct sales
Partners establish credibility and
mindshare with vendor sales teams
Vendor needs to scale services
delivery
Partner gets enablement and IP from
vendor services teams, either pre or
post-sale
Breadth of Portfolio and Partners are Key Drivers
Amazon Consulting 2011 8
Currently 3,000 Specialized partners each with avg. 3 specializations.
Total of 30,000 certified implementation specialists (individuals)
Broad portfolio
from M&A activity
Foster field sales
teaming - access
to Partner
Business Center
(100 global reps)
Content and
competency
assessments
organized around
“Knowledge
Zones”
Amazon Consulting 2011 9
The End-user
• Clearly delineation of partner skills and vendor endorsement
• More alignment to their solution needs and industries
The Partner
• Enhanced market credibility
• Enhanced profitability (services attach, can charge more)
• Makes partner to partner collaboration easier
The Vendor at HQ
• Defines partner investment and loyalty; allows for clearer prioritization of support
• Helps to promote specialists to end-users and field sales teams
The Vendor in the Field
• Makes the “trusted friends” network less critical
• Gives broader set of skilled partners to work with
Amazon Consulting 2011 10
Creating End-User Value & Partner Differentiation
What were the biggest drivers for your company in creating a specialization program?
0% 20% 40% 60%
Make co-selling with direct teams easier
Target market penetration, leverage partners' vertical expertise
Partners investment opport. & show commitment
Allow partners to differentiate
Providing greater end-user value
Amazon Consulting 2011 11
Scalable Computing & Infrastructure
Oracle Solutions
Microsoft Solutions
Enterprise Storage
Services Sales Networking
Public Sector SMB Health Care
SAP SolutionsConverged
InfrastructureVirtualization
SoftwareBusiness
Critical SystemsNetwork Security
Office Printing Graphics Store Solutions
Solution
Technology
Market
PartnerONE Elite Portfolio
Focused on
creating partner
differentiation and
encouraging
solution-selling
across the broad
portfolio
Integrated set of
specializations
based on solution,
technology or
market orientation
Clear linkage of
specializations to
main program
tiering
Amazon Consulting 2011 12
Specializations are SpecialLess than 20% of partners hold specializations
Q: How broadly have you currently implemented your specializations program across your partner community and program structure?
< 10%
11- 20%
21 –35%
36 – 50% > 50%
Amazon Consulting 2011 13
0% 20% 40% 60% 80%
Partners more readily adopting emerging technologies
Better key market penetration
Easier, more effective sales teaming
Higher profitability
Increased loyalty
Increase competency
SP Vendor
Increase Competency and Profitability
V: What value do you want to create between your company and partner around their specialization investment? SP: In what ways could investing in specializations positively impact your relationship with your IT leading vendors?
Other Solution Provider
Objectives
More marketing support &
visibility – 30%
More channel program
benefits - 23%
Amazon Consulting 2011 14
Global Commerce
Integrated Architectures Specialization (IAS)
Focused on
increasing partner
competency around
company’s evolution
to solutions &
architectures
Aimed at increasing
partner profitability
Market, technology
and architecture/
solution
specialization
options
Specialization
requirements tied to
Silver & Gold
program levels
Amazon Consulting 2011 15
Most Have 3 – 5 Specializations
1 – 2
3 – 5
6+
Q: In terms of revenue, who are your top four strategic IT vendors? Q: How many specializations do you currently hold
with these strategic vendors?
Amazon Consulting 2011 16
Creating better differentiation and ways to establish customer value for the
partner ecosystem and scaling services delivery for Microsoft
Competency and advanced competency across people/methodology,
technology, revenue, sales and marketing, and customer evidence
Amazon Consulting 2011 17
0% 10% 20% 30% 40% 50%
Doesn’t help differentiate us from our competition
Difficult to provide the customer references required
Current specializations haven’t been that beneficial
Too many employees have to earn/maintain specialization
Takes too much time
Too expensive
Solution Providers Vendors
57% of Solution Providers Decided Not to Specialize
QSP: Have you ever considered obtaining certain IT vendor specializations but decided not to? Why did you decide not to obtain those specializations?
QV: What are the barriers that have prevented your partners from investing in your specialization program?
“Usually, the
barrier is, that it
doesn’t mean
anything to the
client”
We’re too small to
have dedicated
person for every
single product
Amazon Consulting 2011 18
Time and Expense are Barriers
Q: Have you ever considered obtaining certain IT vendor
specializations but decided not to?Q: Why did you decide not to obtain those specializations?
0% 10% 20% 30% 40% 50%
Difficult to provide the customer references required
Doesn’t help differentiate us from our competition
Too many employees have to earn / maintain specialization
Current specializations haven’t been that beneficial
Takes too much time
Too expensive
> $5m < $5m
Amazon Consulting 2011 19
Partners Specialize to Increase ProfitabilityExpect to see that return within a year
0% 10% 20% 30% 40%
Varies by vendor line
More than 18 months
12-18 months
6-11 months
3-5 months
Less than 3 months
How long do you expect it to take to realize return on investment
on an investment in specialization?How do you measure return on investment from your investment
in specializations?
0% 20% 40% 60% 80%
Higher attach rate of services to products
Better market differentiation
Increased customer satisfaction
New customer acquisition
Increased revenue
Increase profitability
Only 2% do not evaluate the ROI of their investment in specialization
ROI Metrics Time to ROI
Amazon Consulting 2011 20
What Partners Value
Opportunity
Investment
Brand Strength
& Demand
• Brand recognition
• Strong reputation
• Install base demand
• Financial health
• Innovative technology
• Technology vision
Revenue &
Margin
• Reasonable product
margins
• Professional & support
services margins
• Multiple engagement models
(agent, reseller, OEM)
Relationship Training & Enablement
• Technical training cost
• Sales training cost
• Staffing opportunity cost
• Formal certification
• Use of services
methodology & templates
• Limited channel conflict
• Clear rules of engagement
• Accessible partner manager
• Strong local relationships & clear
teaming processes
• Executive level support
• Chemistry and abiding trust
• Technical support
• Sales support
• Marketing support
and MDF or co-op
funding
• Field mentoring
Program
Support
• Ease of transaction mgmt.
• Automation of key program
elements
• General ease of doing business
• Demo, lab equipment & NFR’s
Business Process
Performance
Incentives
• SPIFs
• Rebates
• Promotions
• Deal
registration
Amazon Consulting 2011 21
Program Structures Attributes of a Strong
Specialization Program
Aligned with customer
targets & portfolio solutions
Enrollment is proportionate
to breadth of partners
Advances holistic skills of
partner (not just technical)
Distinct and quantifiable
benefits to partner, esp.
economic
Gives clear direction to
vendor direct sales team
about engagement &
support
Is leveraged through
vendor marketing strategy
Specializations
(verticals, solutions or functions)
Certification & Accreditation
(products)
Core Product Training
(sales & technical)
Amazon Consulting 2011 22
Technology Solutions Skills Most ImportantWaning focus on customer segments or verticals
0% 20% 40% 60% 80% 100%
By ServiceCapabilities
By TechnologySolutions
By VerticalMarkets
By CustomerSegment
Vendor SP Future SP Current
Q: In which areas of IT vendor specializations is your company
planning on investing? Q: Which areas do you have IT vendor specializations?
Amazon Consulting 2011 23
Many Vertical SpecializationsLimited solution provider interest
0% 10% 20% 30% 40% 50% 60%
Aerospace and Defense
Media and Entertainment
Public Sector
Energy, Chemical, Utilities
Retail
Transportation and Distribution
Financial Services & Securities
Manufacturing
Consumer Products & Goods
Telecommunications
Banking
Education
High Tech
Healthcare/Medical
Solution Provider Vendor
QSP: In which vertical markets would a vendor specialization be most attractive to you in the next 18 months?
QV: Which vertical market specializations do you offer today?
Amazon Consulting 2011 24
Longstanding focus on
industry solutions, especially
in the mid-market (penetration
of “general business”
category)
Committed to measuring
customer satisfaction and
client references through
specialized partners
Quality vs. quantity approach
– partners must apply to
become specialized
Five specialties:
1. Cloud Computing
2. Industry Solutions
3. Infrastructure Solutions
4. Systems Storage
5. System X
PartnerWorld Specialties
Amazon Consulting 2011 25
Partners Want Financial Incentives Deeper Training & Technical Support
Q: What are the most important channel program benefits you currently receive from your existing IT vendor specializations?
0% 10% 20% 30% 40% 50% 60% 70%
Early access to demos and labs
Preferred access to vendors’ leads
More lucrative sales influence/referral fees
High-profile visibility through the vendor’s outbound marketing
Promotion to a higher tier in the vendors’ program
Free or preferential technical support
Specialized sales or technical training
Eligible for higher financial incentives
Current
Expected
Amazon Consulting 2011 26
Misaligned Program Expectations
QV: What additional benefits are your partners asking you to provide for specializations (that you currently don’t offer)?
QSP: What are the most important benefits you expect to receive from your IT vendor specializations?
0% 10% 20% 30% 40% 50% 60% 70%
Early access to demos and labs
Preferred access to vendors’ leads
Promotion to a higher tier in our program
High-profile visibility through the vendor’s outbound marketing
Free or preferential technical support
Specialized sales or technical training
Eligible for higher financial incentives
Solution Providers Vendors
Amazon Consulting 2011 27
Assess Your Need for SpecializationWhat are your real drivers?
Who’s experiencing the greatest pain or lack of value?
Define an Effective ProgramDo specializations scale your services delivery needs?
Are industry specializations significant in your business?
Determine the Value PropositionWill it increase the partners profitability?
Is the value chain (end-user, partner, vendor) clearly defined?
Evaluate Your Partners SpecializationsDo you have enough partners specialized? Too many?
What is the capacity for specialization?
Drive Field Level EngagementAre the partners investments in specialization visible at the field level? Does your field align with industry and/or technology competencies?