So Many New Tech Companies. Whatta Pain in the Channel!

The last 5 years in the tech sector have been especially change-spastic.? Over 585,000 tech companies?now operate in the United States alone, showcasing the industry’s vibrancy.?McKinsey estimates that AI alone, could contribute up to $15.7 Trillion to the global economy by 2030. Interestingly, the Big Four and?Microsoft?constitute only about?20%?of the overall market2. (Microsoft, Apple, Alphabet, and Amazon) ?While the “Big Four” remain influential, their tech ecosystem has expanded significantly.?

What’s with the latest myriad of new entrants to the tech market-space?? Are they making money? Are they taking money away from other industry stalwarts?? What’s the current state of cloud migration of core systems such as SAP, IBM, ServiceNow, Guidewire, Oracle?? Seems like a long crawl over broken glass to the cloud for migrating the core systems that run the business world.? Lastly, what does all of this mean for channel partners who need to support the evolution?? Let’s look at the state of the industry and then explore the swimmers in the channel.

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Look at what’s come to market just in the last 7-10 years:

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1?? Microservices Architecture: Enables development of complex applications as modular services, offering flexibility, scalability, and resilience.?

2?? Low-Code/No-Code Platforms: Empowers citizen developers to create applications quickly and easily, improving business agility.?

3?? Open-Source Technologies: Cost-effective and customizable alternatives to proprietary systems, like Linux, Kubernetes, and PostgreSQL.?

4?? Blockchain Technology: Enables secure, decentralized, and transparent transactions, useful for supply chain management, digital identity, and financial services.?

5?? Artificial Intelligence (AI) and Machine Learning: Automates tasks, enables predictive analytics, and enhances decision-making across industries and the common man.

6?? Cloud Computing: Real On-demand access to computing resources, challenging traditional core systems providers and prompting them to offer cloud-based solutions.?

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These technologies are transforming the IT landscape, enabling businesses to move away from traditional, monolithic systems and adopt more agile, cost-effective, and innovative solutions. As a result, legacy core systems providers are facing increased competition and must innovate to stay relevant.

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Since 2020, the technology landscape has witnessed a surge in new companies entering the market. So what are the implications to the channel as partners who steward the integrations?:

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• The Future of Channel Partnerships: Partnership EVOLUTION -Both partners and providers need to evolve how the other represents the other, approaches the economics of the relationship, and see their relationships through the lens of the customer. Right Sizing – Signing too many partners for the sake of “hoping” solutions will be sold by many partners instead of several projects by a few, is no longer a sustainable business model without relaxing old relationship themes. Adaptability: Agility is essential for both providers and partners. Education and Support: Continued education on new technologies is vital and must be influenced together. Long-Term Relationships: Partnerships should focus on sustained value beyond the initial sale drawing focus to Customer Lifetime Value.

Channel partnerships play such a pivotal role in connecting technology providers with end customers. These partnerships have historically been a driving force for business growth, allowing companies to expand their reach, tap into localized knowledge, and deliver innovative solutions. However, the rapid influx of new companies and technologies has significantly impacted these relationships.

·?????? The presence of so many technologies make it difficult for partners to be loyal to independent vendors.

·?????? Every tech vendor has individual needs they need fulfilled by partners.

·?????? The economics are changing due to slimming tech margins to the partner.

Final thoughts:? Tech providers need to rethink their partner relationships so that there is more skin in the game, better loyalty, and more concrete benefits for the partners to supporting their technology and overall business methodology.? For decades, the investment community has dictated the direction of technology providers as just that; “providers of technology, not suppliers of support and integration services.”

Customers are the ones who benefit in the end for tighter cooperation.? However, the tech and the partner world will be “killing it” in new ways when they relax their legacy business programs and accept the inevitability that new ones are needed.

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Rich Salerno is Head of Strategy for OnTarget Partners (OTP) and is a Managing Partner of ReachFartherNow; OTP’s Strategic Services Division. Rich has more than 3 decades of sales and marketing experience in the technology industry, most specifically in Enterprise, Cloud, SaaS, BPM, RPA, AI and professional consulting services. He came to OnTarget as a former successful customer of OTP to build a division dedicated to making it easier for tech companies and their partners to sell and implement their solutions. OTP’s Channel Master 24’ program is an example of reinventing a Sales methodology that has been ripe for transformation and a continuing challenge for most tech companies to manage and forecast. He can be reached at:

[email protected]