Cloud Software Association

Breaking into the channel can be difficult, especially for cloud distributors. This might lead some to wonder whether it’s actually worth it.

Ryan Walsh, Chief Channel Officer at Pax8, made a compelling argument for why it is.

Here is what businesses should take away from this incredibly informative talk.

Why do cloud distributors even need the channel?

In general, there are three misconceptions that cloud distributors might have about the channel.:

1. All customers will buy direct.
2. Online marketplaces will replace the channel.
3. Distribution is dead.

None of these things are necessarily true. The buyer journey is more complex than many realize, and partnerships still have a place in it.

But even with these misconceptions out of the way, some might wonder what the channel can actually offer. The answer: scale and reach. Trusted advisors can help cloud distributors reach those they wouldn’t otherwise.

What are the channel cloud opportunities?

More and more money is being spent on application software like SaaS. In 2016, $144 billion was spent on application software. Of that, $36 billion was SAS.

That’s a massive spend, and shouldn’t be overlooked.

SMBs are considered long tail, which is why some are hesitant to partner with them. But taking advantage of selling into this channel is important, and can lead to revenue growth.

How do you define the channel?

In order to understand what the channel can give, it’s important to really understand what the channel is.

In short, the channel can be defined as “different routes to market.” And these different routes to market are important because there are so many different kinds of customers out there.

A business can’t hope to hit every customer on their own. That’s why they turn to different routes, rather than selling just directly. Companies who lean into the channel are able to reach a wider audience.

MSPs are a trend in the channel that aren’t going away.

What can you learn from tapping into the channel?

1. Be persistent. Commit to the channel. It will likely take a while for partners to trust you. You might not hit full momentum until 18 months.
2. Build a partner management console. Give partners a place where they can see their customers and reach out to them. Make it easy for partners to work with you.
3. Set up monthly billing. Annual terms are not nearly as effective. Recurring revenue from monthly billing is better.
4. Provide an API for billing. This is new, but it’s becoming more prevalent. If you don’t consider API now, you’ll likely be left behind.
5. Partner with channel experts. Be a part of the partner community, and learn from others who have been in the channel longer than you.