Hybrid Solution Providers Are More ‘Strategic’ With The Customer Than Ever: The Channel Company CEO Raddon

Evolving customer needs are helping drive partners to adopt multiple business models, delivery models and advanced technology practices, top solution provider executives and The Channel Company CEO Blaine Raddon say during XChange+ 2021.

Partners are embracing the hybrid solution provider model at an accelerated rate, positioning them to better meet customer needs in a dynamic economic environment, The Channel Company CEO Blaine Raddon and a panel of top solution provider executives said Thursday.

The growing adoption of the hybrid solution provider model is shown in the results of the latest Annual Channel Census from IPED Consulting, which Raddon shared on Thursday during the live-streamed session at the XChange+ 2021 virtual event. The Channel Company is the host of XChange+, and is the parent company of CRN and IPED.

During the panel, the three executives shared their insights from using the hybrid solution provider approach of offering multiple business models, delivery models and advanced technology practices while going to market. And Raddon discussed how the model is critical for the channel as a way to meet evolving customer needs.

“The hybrid solution provider model is not a new business model. It’s a recognition that all of these things are blending together--and that the successful solution provider is centered around their customer now, as an extension of the customer,” Raddon said during the XChange+ 2021 session.

[Related: The New Channel Normal: How Solution Providers Are Adapting In The Midst Of Coronavirus]

The hybrid solution provider is “basically going to do whatever the customer needs, in order to build their business around their customer and their customer segmentation,” Raddon said.

Along with offering several different business and delivery models, and specializing in multiple advanced technologies, the hybrid solution provider approach includes the ability to sell to a wider range of account relationships in addition to IT procurement.

The three executives who spoke during the session Thursday were CMA Technology Solutions President and CEO Chad LeMaire, NWN CEO Jim Sullivan and Overview Technology Solutions President Marc Menzies.

“As an industry, we’re beginning to move forward,” said Menzies, who is also the CTO of Ronkonkoma, N.Y.-based Overview Technology Solutions. “Calling ourselves something like a hybrid solution provider actually is much more appropriate.”

Though the hybrid solution provider model is nothing new, the pace of adoption among partners has been increasing, according to IPED’s Annual Channel Census. Key factors driving the shift have included the rapidly changing economic environment and the greater appetite for digital transformation among customers during the past year.

“COVID has come along and accelerated customer transformations,” Raddon said in an interview with CRN. “The digital transformation of the business, the digital transformation of marketing -- all of that just got accelerated. And we don’t have an expectation that it’s going to pull back fully to where it was before.”

For partners, this growing demand for digital transformation work makes the hybrid solution provider model more relevant than ever, Raddon said.

“It’s all about the customer. Your focus needs to be first and foremost about the customer, and your relationship of being more strategic with the customer,” he said. “They want a deeper, strategic relationship. They want you to be able to sell any technology they want. They want you to be able to deliver it how they want. They don’t care about what you call yourself. And you’re going to need to sell to everybody that makes a decision, or impacts the decision, at the end customer.”

In the Annual Channel Census, a full 100 percent of solution providers reported that they now go to market with at least three different business models. More than half--56 percent--said they now utilize four or more business models.

By contrast, 11 percent of solution providers still had just a single business model as of mid-2018, when The Channel Company released its previous study on hybrid solution providers. Common business models for partners include managed services provider, VAR, systems integrator and consultant.

Likewise, 87 percent of solution providers now report having at least three different delivery models--such as cloud, on-premise, off-premise and managed services. That’s up from 70 percent as of mid-2018.

“This industry has changed. What the customer expects us to do--or even better, will allow us to do--is so much broader. We do so much more with them,” said LeMaire of Baton Rouge, La.-based CMA Technology Solutions. The company originally began in 1984 with a focus on a single vendor, IBM.

“What I like to think now is that when people say, ‘Technology will help me solve this business problem’ --[they think] ‘let’s call CMA,’” LeMaire said. “If we make that transition, then we’ll be here forever.”

In terms of the impact on business from the pandemic, LeMaire said it has opened the door to do far more with customers around cloud and managing the customer’s infrastructure.

“All those things that they weren’t so sure they wanted to do--they’re ready for us to do now,” he said. “We saw a tipping point probably somewhere in the middle of last year. It’s really been a good deal for us.”

Raddon noted during the session that the direction for the channel hasn’t changed during the pandemic--it’s just that everything has sped up.

“That change that COVID accelerated, I don’t think it necessarily shifted our direction,” Raddon said. “But it accelerated and made permanent some of the things we’ve been seeing in the data.”

In other findings from the Annual Channel Census, 72 percent of solution providers report having three or more advanced technology practices, while 76 percent are selling to at least three different types of account relationships. In addition to IT buyers, common account relationships with customers can include line of business, purchasing, security and marketing.

Altogether, 62 percent of the partners surveyed are achieving all four dimensions of the hybrid solution provider model -- going to market with three or more business models, advanced practices, delivery models and account relationships.

Overall, Sullivan said that the hybrid solution provider “resonates well” at NWN, No. 80 on CRN’s Solution Provider 500 for 2020 and based in Waltham, Mass.

“The partner has never been more important than it is today, and has got to be focused on delivering a business outcome,” Sullivan said.

Ultimately, the adoption of the hybrid solution provider model is just the latest in a series of transformations for the channel, Raddon said. Partner business models were originally driven by the vendors, but eventually began to be driven by certain technologies for many partners, he said.

With this latest transition, the focus for the channel is “all about the customer relationship and trying to sell what the customer needs,” Raddon said.

“The channel is adaptive, and over time has been very responsive to the marketplace,” Raddon said. “Now the channel is changing [again] given the market conditions that they’re facing.”