8
Jan

A Transformed Enterprise IT Buyer has Transformed the Business Model of the Services Companies that Provide Support, and More

Much has been written over the last several years about the characteristics of a new enterprise IT buyer for 2013. We have written about this new buyer in earlier posts to this blog, for example in a post on the possible Obsolescence of Outside Software Sales Teams [as a result of] a Combination of Factors.

The bottom line on this new buyer is that she does almost all of the work required to research, specify, and identify likely solutions for “bleeding wounds” online before ever lifting a telephone to call on a sales organization.

Further, she is likely to be a survivor of a number of failed IT projects. We have written on this topic of failed IT projects earlier in this blog in a post titled Buyer Skepticism must be an Underlying Assumption for Enterprise IT Sales in 2012. This experience, where lots of money was expended on IT projects that failed to deliver a return on investment (ROI), as anticipated, has fed the enterprise need for so-called “portfolio management,” which amounts to an activity undertaken to ensure that, for future projects, all efforts will be made to capture as much of anticipated ROI as possible.

Our recent interactions with the services companies that do business with this new enterprise IT buyer, meaning the systems integration businesses, development shops, and other consulting and even advisory firms, indicate that they, too, have been transformed to keep up with the times, and in a manner that increases the difficulty that most ISVs will likely face should these ISVs opt to pursue channel sales strategies targeting these services businesses.

Specifically, we think that enterprise IT market demand for turnkey systems integration work is a mere shadow of earlier years. The reason for this decline in demand is that enterprise IT organizations, generally, are shouldering more of the responsibility for all of the key aspects, meaning the actual answers to “who/where/how/why” questions for all implementations of solutions for core requirements.

Enterprise IT may not provide the actual human resources required to implement core projects, but they do, with increasing frequency, specifically direct all aspects of the implementation. Therefore, in this new world, the type of products that we discussed in yesterday’s post to this blog, specifically, products on the periphery of core demand, which, nevertheless, can play an important role in an integrated solution, will likely have to look to joint marketing opportunities with vendors of core solutions if they are to capture the attention of channel partners.

In the next post in this series we will look at how this constrained atmosphere necessitates a different set of themes for marketing communications efforts for these peripheral products in search of channel partners.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved

7
Jan

Important Points for Enterprise IT ISVs to Address as They Consider Implementing a Channel Sales Strategy

There are many reasons for enterprise IT ISVs to consider implementing a channel sales strategy for products. In our experience the most prominent of these are:

  • an ISV is supported by too few internal sales personnel, or
  • a software product requires a comparatively complex installation, which is usually accomplished with some significant amount of customer-specific customization, or
  • a software product (usually a commodity) is targeted to a market where customers generally work with a select set of prime vendors and have little to no motivation to change their buying preferences

Another very important reason for enterprise IT ISVs to explore the opportunity presented by a channel sales strategy stems from the distance between a software product’s typical application and the core driver of market interest.

It is worth taking a few words to explain this last notion. Consider that products designed to satisfy peripheral market needs are, necessarily, located at a distance from the core market driver. Examples of these software products on the periphery include, but are certainly not limited to, applications designed to enable wider use of specific features of the core application. These products are usually captive to the core application and intended to meet the needs of specific market niches.

If one considers Microsoft® SharePoint® as a core solution designed to address a need for enterprise content management, then a product like the Outlook to SharePoint connector offered by Colligo Networks can be seen as a means of enabling users to extract better performance from SharePoint, itself. We note that Colligo Networks’ solution provides SharePoint users with a seamless method of storing email data to document libraries, in other words the system works without any need for human intervention, thereby ensuring that a substantial proportion of documents sent by email, as well as email messages, themselves, will be correctly stored in SharePoint document libraries.

While gaining assurance that most email messaging is recorded in SharePoint document libraries may not be critically important to lots of businesses, for those businesses operating in highly regulated industries, where adhering to compliance regulations is an ongoing imperative, gaining such assurance is, in fact, very valuable, and, more often than not, worth the cost of acquiring a solution like the one offered by Colligo Networks.

In our experience, products positioned at a distance from core market drivers, which, nevertheless, can be used, like Colligo’s Outlook to SharePoint connector, to deliver a tangibly more valuable solution to users, are particularly well positioned for a channel sales strategy. After all, for a range of service providers, including businesses offering users system integration, or custom development, it makes sense to include these products in project implementation plans for the strategic role they play in ensuring that the end customer receives optimum value.

Therefore, one could argue that the task of attracting channel partners, for peripheral products correctly positioned, should be a rather easy one for sales. But, as we will show in the next post to this blog, in 2013 some other factors are at work that act as repellents, regardless of how successful a product market message may be.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved

1
Nov

Selling Products & Services for Enterprise Business Through Partners

A method can be used to mitigate some of the difficulties related to the complex sale for enterprise business. Specifically, enlist the assistance of an intermediary who is already entrenched within the prospect business. Opting for a channel sales strategy should be a natural decision where some facts have been determined through prospecting calls or visit with the prospect:

  • Products and services are purchased by a central procurement organization
  • Central procurement maintains an approved vendor list and
  • There is either no opportunity for your business to be added to the approved vendor list (they are no longer “taking applications”) or
  • Your contact lacks the authority to purchase in a manner but through the central procurement organization

If the above factors are in place then you have no choice but to work through one of the approved vendors. This necessity is not necessarily a negative. Choose a partner who is not an “order taker,” but a business with complementary offerings who can introduce your product or service to other prospects. This type of partner typically is not after a discount on your product; rather, the partner has a relationship with the prospect that will be benefited through provisioning products like yours. Of most importance, your partner, an approved vendor, is already a trusted resource for the prospect. Leverage that familiarity to cut through gobs of time that you would otherwise have to spend building trust with your contact, his/her management, etc as you schedule meeting after meeting in an effort to push the sale forward.

Neither does including partners within the complex sale strategy remove the opportunity of maintaining a national sales effort of your own. I have substantial experience working with businesses where it made sense to simultaneously operate channel sales and national sales efforts. Invariably these two teams of ambitious sales people would collide within prospects, but our solution was to provide a clear incentive to our national sales teams to defer to partners where possible. In fact, we utilized a lead generation system of delivering these national opportunities to motivate partners to allocate substantial attention to us. We also experienced strong cash flow as these “approved vendors” fast tracked our sale through the procurement organization.

Where products or services are built for the enterprise computing market–meaning personal computers, local networks and shared access to larger computing systems (mainframes, etc), it is a pure natural to leverage a channel sales strategy, which has always been a familiar characteristic of such markets. Use the channel to your advantage.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved