Tessellation within our Partner Ecosystem

Before we talk about?tessellation?and how in the world it relates to a post about channel partners, let me take you on a quick trip in my time machine back to 1987.?

1987 was the year I graduated from high school, and give me credit for admitting that publicly.??I look back on it as a nostalgic time where my mullet, faded jeans with holes in them, and collection of Bon Jovi and Def Leppard concert t-shirts ruled the day.??It’s no longer 1987, but it is May and that’s graduation season for high school and university students, so hence my nostalgia.

As I think back to those days (which by the way seem like yesterday……) I am reminded of the things we were doing to position ourselves for the next chapter in life:??going to university.??And a big part of that for me revolved around the SAT test.??For me, words were my strength and that was reflected in the “Verbal” portion of the SAT.??Math was reflected in the “Math” portion of the SAT and it was not my strength and my scores were accurately reflected.???Lucky for me I had no desire to be an Electrical Engineer, so off I went into the world to capitalize on my strengths and improve my areas of weakness.

All of this brings me full circle to math.??And while I might have hoped back in 1987 that I wouldn’t need much of it in real life, that proved to not always be the case.??If you’re reading this, and you haven’t given up yet, you may be wondering how this applies to the channel, to partners and what we all do for a living.?

The relevance is this:??We’re all dealing with new routes to market and new partner types.??Are you trying to answer questions from your partners about where they fit in this ecosystem???Is your channel ecosystem moving to subscription and consumption models right before your eyes???And are you collectively trying to determine channel value in these new models and consumption vehicles??

Tessellation is a mathematical term that means:?“a special type of tiling (a pattern of geometric shapes that fill a two-dimensional space with no gaps and no overlaps) that repeats forever in all directions.??While I am not a math expert, I like this term because it describes what we are dealing with in the today’s partner climate:??We need all of these shapes (partners) to fill a multi-dimensional space where we have no gaps and no overlap, we need it to repeat, scale and be flexible enough to move in any direction.??

I know you are thinking “I’m not good at math”, or maybe “Math is boring!” and this is too technical so get to the point already.??I get it, so I have three principles for this article, which are Direction, Relevance and Value.

The first principle is that the market is going to move in this Direction with or without us, so do we accept that as a cornerstone.??If we don’t, we all risk becoming Kodak, or Blockbuster and we risk the market moving past us.??

Want some data???Azure is an $85B marketplace growing at 46% QTQ.??AWS is $67B growing at 36% QTQ and GCP is $19B with a growth rate of 44% QTQ*.??There are no other businesses or industries on earth that have that much revenue with that level of growth, and there is no immediate stopping that freight train.??

If the direction of the market is going to include these marketplaces (and it is), then how are they Relevant to all of us???Each of these marketplace providers has their strengths and development areas, but I’ll break them down this way:

·??????Azure:??Strength within all segments of the market, largely due to all shapes and sizes of customers using O365 and other MSFT apps universally.??They also have a strong engagement model with the partner community.?

·??????AWS:??Their marketplace technology and capability is the most sophisticated and advanced of any current player.??They have deep reach within enterprises and web-centric, born in the cloud companies with cloud-native applications.?

·??????GCP:??The newest entrant of scale into the mix, they are generally the most partner inclusive and most collaborative.??They do focus on solutions and verticals, and don’t forget that Google doesn’t have all the money in the world, but they have a lot of it.??

All these characteristics make the “Big 3” of marketplace providers extremely relevant.??But is there a place for partners within this burgeoning ecosystem to add Value???I believe the answer is yes, but it’s different than anything we have seen before.?

For example, this is a very different business when it comes to demand gen.??We’re not going to do “traditional” demand gen activities with these players.??That’s going to require all of us, especially partners and our marketing teams, to think differently about how we find customers and create demand.??There is a significant shift of customer demand for a digital transactional relationship, and that’s very different from how we’ve used MDF, SDF and other partner funding mechanisms historically.??

And the role of partners is going to be different in many cases.??I’ve said for the past 12 months that “this stuff doesn’t install itself” within marketplaces and while that is true and it does apply, we’re going to see this manifest itself within the partner world as a Private Offer.??

A private offer enables you to receive pricing that isn’t publicly available within the marketplace.??You negotiate pricing and terms with the seller (marketplace) and the buyer (customer) to create a private offer for the designated customer.??Generally, partners can participate in both the margin and programmatic incentive arena to make money.??That’s in addition to any services or other value-added activities the partner performs with the customer to create a robust and rich marketplace solution.??

I had a boss and mentor who, among other things, always required me to have a point of view, and have an opinion.??It was ok to be wrong, but I at least had to have a point of view, so I’ll close keeping that advice in mind with my point(s) of view on this topic:

1.?????Marketplaces are here to stay.??They bring with them extraordinary scale, an opportunity to add value and a different avenue to access market segments.?

2.?????We can all co-exist.??The game may be played in a way that we aren’t yet comfortable with, but there are places in the value chain for everyone.?

3.?????It will be different.??But didn’t we all get into this business because we love the fast pace of change???And we love how technology changes every 18 months??

That’s my point of view, thanks for reading to the end, and I welcome and encourage your thoughts, input and dialogue on this topic.

-Mike

*Source:??The Channel Company, 2022 State of the Channel