IGEL, Arrow, Pax8 Execs On The Keys To MSP Growth in 2021

Three channel experts say accelerating digital transformation, while focusing on customer experience will be the differentiators for successful solution providers in 2021.

Opportunities Abound In 2021

As the first month of 2021 wraps up, channel leaders from Pax8, Arrow and IGEL said the biggest opportunities this year for solution providers encompass customer experience and driving digital transformation.

But none of that is possible if the solution provider is not focused on the customer’s business outcomes, said Balaji Subramanian, global channel chief, IGEL.

“The way you are going to get subscription revenue is through renewals. The only way you are going to get renewals is through high customer adoption. The only way you are going to get high customer adoption is through customer success and customer experience,” he said. “Focus on that and you’ll get really good results.”

Subramanian, Pax8 Chief Product Officer Ryan Walsh and Arrow Electronics North American sales director Dan Daneilli shared their outlook for 2021 at The Channel Company’s Best of Breed winter 2021 virtual conference this week.

The panel discussion was moderated by Tom Coleary, president of F3, an IT consultant, engineering, and integration firm based in Glastonbury, Conn. He asked the panelist three questions. Here is what they had to say:

What did you see as channel partner’s biggest challenge in 2020?

Walsh: What we saw is a lot of clients of our partners were slow to embrace digital transformation. So throughout 2020 there was a lot of adapting for our channel partners to help their customers survive, initially. A lot of that was focused on supporting and securing a remote workforce. How do you alter your business model? How do you alter your workforce specifically? Security became a dominant challenge. If you weren’t really prepared for that, in the way that was needed, for a remote workforce, that is one of the biggest challenges our partners were facing.

Subramanian: So what we saw was first of all uncertainty. People couldn’t forecast demand properly. We saw large projects were being pushed out, but then it actually started stabilizing a little more. It was interesting. Some of our biggest industries: health care for example, for them having connected health technologies was a big, big thing. There’s a lot of opportunity for our partners to take advantage of that.

But forecasting, managing big deals, all of that became a little tenuous, and still is frankly. I tell my partners don’t worry about forecasting the full year. Let’s just forecast quarter by quarter, and let’s get through this year, quarter by quarter.

Danielli: For big partners to small partners, a lot of us were caught off guard at the rate we needed to accelerate digital transformation. It really brought to light that we need to have much better business models for how we execute this opportunity and even become more consultative for the customers that we are jointly selling into. Security really rose to prominence through that period. Especially through Q2 and into Q3 we saw a lot of demand for security products working from home, working remotely.

All in all, 2020, I think we all banked a lot of knowledge credits that we’re all carrying in 2021, enhancing some the business models. I think there’s a lot to be said for some of the new programs that will come from distributors and OEM to help support the acceleration of digital transformation.

What do you see, from your lens, as the No. 1 opportunity for partners as we head in to 2021? Where should we make a big bet, maybe?

Walsh: Three things that we see around that: one is, to the extent those watching this are not taking advantage of recurring subscription business, there’s a great opportunity to go into that realm and grow that stack. We’ve checked some surveys of customers and really what they want their partners to do is, if you are going to go in that direction, they need their partners to put that together in a seamless way. So when we talk about data protection, it’s not a point product issue any more. You really have to think about it from a broader, no walled-garden-type physical location anymore. So for us, we’re talking to partners about what does that look like: data protection, and security, and remote work? That is what progressive partners we are working with are focusing on.

We did another survey specifically around security. The large partners, they had more advanced security: cyber threat hunting, security operations, mobile security. The differences in those offerings for large partners were like 20 percentage points greater than a smaller partner. I see that as an opportunity.

The last thing on top of all this, we’ve really seen the most progressive partners take advantage of this through a phenomenal customer experience. I don’t think that’s new. As a partner, we’re seeing automation play into that equation, in terms of, how do you facilitate a great customer experience? You just have to be fast and easy. That’s some of the opportunities were working with our partners to take advantage of.

Subramanian: All of our customers are going through digital transformation journeys, at what ever speed they might be, but they all focus on business outcomes. You are going to be very successful if you focus on that. If you focus on the skills that you need, the services that you can provide and that customer satisfaction that you want to be able to provide. So for example, our pillars of success, in our program, for from a partner-facing stand point is skills, customer success, and of course, sales.

How do you do that? How do you acquire new customers, but also increase the wallet share of existing customers? That’s just as important. Recurring revenue, subscription model, that’s the name of the game. The way you are going to get subscription revenue is through renewals. The only way you are going to get renewals is through high customer adoption. The only way you are going to get high customer adoption is through customer success and customer experience. Focus on that and you’ll get really good results.

Danielli: All of our businesses are driven by, and measured by good customer service. I think the single biggest opportunity for the channel ecosystem is to better leverage platforms in how they are engaging with their customers.

I think there’s two really big opportunities, and two areas we’re really focusing on. First, in the pre-sales capacity, we can support our partners in becoming much more consultative. We’re bringing platforms like cloud physics to our channel partners to enable them to become more consultative. These are fantastic when we start to wrap our opportunity-creation framework around it.

We are surfacing a whole lot of contextualized information that’s allowing our partners to become a lot more consultative around driving digital projects, a lot more planned and purposeful in what we are driving in that. The second things is, as we’re seeing the rise of cloud and consumption, one of the biggest challenges for partners is how do you operationalize this business?

You’re going to go from doing a million-dollar deal, and $300,000 renewal, to 36 transactions over three years and change orders, a multitude of different cloud transactions that go with it. How you operationalize that is absolutely critical.

Arrow over the last six years has invested over $100 million in our cloud billing and aggregation platform, Arrow Sphere. We see that as a critical part of supporting our partners in developing their own cloud practices and leveraging our economies of scale.

In 10 or 15 seconds, what are you doing to set these partners up for success in 2021?

Walsh: It’s captured for us in one word. We’re focused on orchestration. Gone are the days when you had one vendor that says do everything with me. Whether you are Arrow or IGEL you are living in an ecosystem with other technologies. We are helping and providing product and services around orchestration, meaning allowing the customer and the partner to use the technologies they have, but stringing them together in a single solution.

Danielli: Aggregation through platforms, would be how I describe what we’re doing to change our interaction with channel partners.

Subramanian: I’m always a big believer in winning the hearts and minds of partners through enablement. So Enablement. Enablement. Enablement.