Pushing the Channel to Cloud

The headline diagram is the technology adoption curve. In the channel, cloud is still in the Early Adopter phase. Despite 10+ years of shouting and begging, the channel has not fully embraced cloud services (UCaaS included).

In the PBX space, on-premise may have seen the bankruptcy of Avaya; the exit of Toshiba; and the acquisition of Shoretel, but the hardware guys are still there taking in revenue and waving their flag. Ask Digium. They released new on-premise Switchvox models this week.

Partners are struggling with one thing: Business Model.

I spoke with a Shoretel partner at ChannelCon who was able to transition to cloud sales. He points out the significance of having a revenue stream that would allow him to spend the two years needed to build up a cloud practice.

A number of partners have been disrupted by Avaya, Shoretel and Toshiba, but also by broadband and price compression (that seems to have no end).

Cloud Providers can beg for the Big A - Attention – or you can talk to their Tribe. Seth Godin wrote a whole book on the concept of Tribe. Talk to those that will listen; not interrupt and annoy those that will not. 

And please stop standing a stage telling everyone that they are going the way of the dodo bird. No one wants to hear it anymore. Keynote speakers starting saying this 5 years ago or longer - and partners are still standing, defiantly.

You aren't selling religion. You think you are. The "Religion of Cloud" has by and large not been adopted - like any investor had hoped.

UCaaS started as IP Centrex. The marketers put some makeup on it and some botox and started calling it UCaaS. This product has had more name changes than Prince – but it still boils down to fancy dial-tone replacement in many scenarios.

Why haven’t partners jumped on your bandwagon or drank your cloud kool-aid yet? There are 4 main reasons: inertia, money, stubbornness and fear. 

Inertia being the fact that they are heads down doing what they do and they don’t want to change. [No one does. Change sucks.] The stubbornness is part of this, too.

They have to consider if their business model (money) will even work anymore. That is a scary proposition. A partner sold a 110 seat UC deal and asked, "Is it worth all the headache for the commission?" Providers don't have an answer for this (mainly because they are also struggling with their business model!)

I see many partners shifting models to software/coding, systems integration and even selling their own services. IoT kind of lends itself to a partner bundling and selling something unique that they put together. I think we will see more of this because it is more interesting and has better margins.

The fourth factor is Fear. Fear of change. And so much has to change - the business model, the skills, the talent, the buyers, the sales process, et al. It's basically a forklift upgrade to the partner business. (It is a forklift upgrade for providers too, but they don't tell you that.)

The other fear is fear of the service. Telecom is broken. Carriers can't even deliver network in a reasonable and reliable manner. How in the world can a partner not have trepidation about something as complicated as Cloud Contact Center, IoT or cyber-security?

An outage took out all of Birch. How come the cloud platform didn't stay up or fail-over? If their own phone numbers went dark, how can a partner rely on them for cloud PBX? And this isn't an isolated incident. Carriers are experiencing outages more and more. The disaster recovery and redundancy that is built into a cloud platform isn't always as advertised, as we have seen. So the fear or uncertainty is another factor.

So what should the Cloud Providers do?

Start by talking to those who will listen. Enable them to be successful. Then once they are successful, help them tell their stories. [Maybe read Tribes by Seth Godin. Or watch his TED Talk.]

Next, find out where the friction is. This industry has a terrible reputation when it comes to customer service. And it keeps getting worse. It starts right after the ink on the contract is dry. Get better from that point on. Work on the post-ink processes. Be Customer-Centric IRL (not just in lip service!)

Finally, diagram the business model. Remember in Jerry Maguire? Show Me The Money!!! Not because partners only think about commissions, but cloud is disrupting business models. They need to see where they need to be. They need to know that selling cloud services makes financial sense?

I will leave you with this analogy to dating apps like Tinder. You need better pictures in your profile if you want partners to stop swiping left. There has to be something interesting in the description too. And when we do meet F2F, you better be more than a pretty face - and you better look like your profile photos.

Till next time. Peter Radizeski of RAD-INFO INC.