An Interview with Daniel Graff-Radford for Website Planet. When talking about PRMs, Allbound is one of the first names that come up and with reason. We talked with Daniel Graff-Radford, CEO of Allbound, to know more about the platform, understand the company’s...
The Partner Channel Podcast Episode #15
Managing a Channel in 2021
In this episode of the Partner Channel Podcast, Larry Walsh sits down with Daniel to discuss key findings from Channelnomics annual reports and their impact on the ever-evolving role of channel managers.
Daniel Graff-Radford: Welcome to the Partner Channel podcast, The Voice of the Partner Channel community, I’m Daniel Graff-Radford the CEO of Allbound. I’m excited to be here with Larry Walsh, the CEO and chief analyst of Channelnomics. Welcome, Larry. Thank you for being on the show.
Larry Walsh: Hey, thanks for having me.
Daniel Graff-Radford: Great do you mind starting off by telling us a little bit about your background in the channel and how you’ve got yourself to Channelnomics?
Larry Walsh: We’re a research and strategy firm specializing in the technology markets, mostly in channels, have been doing this now for hard to even believe to say that we’re going on our 11th year. And it’s been a wild ride, if you can see wild on a podcast, we don’t want to get crazy, nor do we. But this is a. How do I get to Channelnomics.
Well, we just rebranded, so we just you know, we just for the first 10 years, we were 20 to 2112 group and we started in 2010. And I jokingly say that I did this because I ran out of places to work. And it’s a bit of a euphemism prior to this, I was in publishing, I used to be the editor of a magazine called For Our Business.
After that, I went on to run the channel group as a publishing company called Ziff Davis. And and they did a publication called Channel Insider, and I’ve had a few other stints around the industry and we know that when me and.
You know, a couple of my coworkers now when we are looking at this and few other people over the years, we like we see all these things, we have a really broad and deep view of what’s going on, in the channel and in the industry. Let’s go apply this rather than just talking about it. And so the that was the genesis of 2112 and what eventually morphed into Channelnomics. So that’s where we are today. So we do a lot of market and bespoke research for technology vendors about the channel. We do a tremendous amount of channel strategy, work and program, development and program, you know, creating new frameworks and we do a lot of enablement work and helping our clients and their partners achieve higher levels of success.
Daniel Graff-Radford: I’ve been really looking forward to talking to you today, Larry, you know, there aren’t that many people out there that have thought this hard for this long about how the channel works, how it doesn’t work, its trends, data. There’s a lot of us that are operating within the channel day-to-day, but having this number of years of insight is going to be incredibly exciting for our listeners. Related to that, your company recently published reports and trends on what you guys saw as changes in the space for 2020, which was a different year for so many people. What are some of the findings that you would like our listeners to know about?
Larry Walsh: Well, we yes, we just released our annual two reports released this time of year, every year. Is our Channel Chief Outlook Report, which provides a look, a look back and a look forward of what channel professionals, channel chiefs are thinking and what they expect to see happen in the year to come, as well as our channel forecast report, which is about the partners and what they’ve seen.
Really, the thing that jumps out at me when I was looking at the data and these reports, if you look at the outlook report and what the vendors saw and where they see themselves going and did a year over year comparison, because we do these studies at the beginning of every year. So we we did the study last year and we did the reporting last year. It was before the pandemic.
So we’re doing it again, and what did we see? Virtually the same numbers. It didn’t really change all that much in terms of what they experience as well as what what their outlook is slightly muted in a few places, generally optimistic, more investment going into the channel, There’s a greater appeal for automation budgets. Channel budgets for sales, marketing, partner enablement are going up, not down. So there’s a lot of positivity in the in the vendor side. On the partner side, though, we saw something entirely different and the pandemic did leave a mark on the partners, even though the partners have a what we would call an optimistic outlook for 2021, their optimism is significantly muted compared to previous years. This is the lowest level of anticipated growth we’ve seen in five years. So we do see there was a real impact on the partner community, but not so much on the vendor side. The vendors, whether the weather 2020 rather. Well, I mean, if you’re looking at earnings reports, you’re looking at what’s happening on Wall Street. You can see the tech community is doing extraordinarily well, particularly on those that are dealing in services.
The partner side, you know, particularly mid and smaller partners that didn’t have the the fiscal health to weather the pandemic conditions as well. They did see they did feel the pain a bit more. So hopefully we’re going to see in 2021. And this is based on our reporting, our research, the partners will recover, they will grow. But I think it’s going to be certain, it’s going to be contextual. And that’s depending on what circumstances, the types of products, the types of services, they are going to dictate their level of success. The one thing I would say, though, is it’s to be particularly keep an eye on the growth of endpoints and edge devices. And in 2020, we saw a significant step back in the level of managed services, revenues being generated by partners being replaced by edge and endpoint devices. And we believe that that’s that’s mostly driven by the surge and work from home that will that will moderate, you know, going into the new year as things start to ease up in terms of the lockdown conditions.
Daniel Graff-Radford: You know, that was just really well said. You know, that the optimism at the beginning of 2020 on the vendor side, mirroring the optimism of the vendors in 2021, you know, and then seeing the muted effects and muted optimism on the partner side is kind of a tale of two cities in what should be a closely aligned partnership. And, you know, seeing the change in our world where some of the managed services are moving to more automation, more devices and how that affects the channel and thinking about who these channel partners are that are pivoting and taking advantage of some of these automation and new security technologies and some of those that aren’t. It’s a really interesting world of haves and have nots in that case. And if you can pivot into this changing world and think about, you know, having services that help people that are at home, then it’s great if you are locked into devices and services in in an office, it could be a really difficult year for you. So that’s a really interesting way to see the dichotomy there.
you know, turning back to, you know, your your data and your reporting, you know, what are some of the the what’s the data that you found in twenty twenty that has rippling effects into twenty twenty one that kind of lead to strategies your company would be interested in helping to promote or engage with people?
Larry Walsh: You know, I think that there’s a lot of question about where do we you know, how are we going to service the customers going forward.
It shows up in the data that shows up in some of the pressures we’re seeing the parties are under, there is a definitive impact of marketplaces on and on channels. What we’re telling, we do expect to see the the development and growth of marketplace strategies as a route to market to continue. We expect to see more alignment of technology alliances the ISVs and other and other technology providers. We do see sales, automation, digital sales whatever you call them is our term for marketplaces as becoming increasingly important in the go to market as a means of simplifying sales, expanding reach. But I think the thing that we do when we talk with our clients again is use that same approach of what’s the mission that we’re trying to accomplish and assign a mission around those marketplaces. They can exist alongside traditional channels. In fact, they can open up opportunities for additional channels for existing channels and partners. And that’s what we’ve been working on with a number of companies, is helping them to identify not a shift in sales motions, but how do we adapt and maximize opportunities as a result of these of the opening up of a new channel? And it’s also important to note that there is an ongoing debate about marketplaces as a threat to the existing channels. And our response to that is, is that a marketplace, whether it’s your own or you’re working through somebody else’s, is another channel. And we don’t need to think of them. Think of marketplaces as a threat as much as an opportunity.
Daniel Graff-Radford: Yeah, we’re definitely seeing massive growth in engagement into marketplaces that makes a lot of sense. And, you know, one of the things that some of our listeners may know is that we do a study each year looking at what partner actions lead to growth and also some of the trends in, the demographics of who the channel leaders are. And we’ve seen a shift in actions by partner type, but also a shift in some of those demographics year over year. What we’re seeing is that, you know, there’s a more even break between sales leaders and marketing leaders and who is leading the channel than there used to be. Probably more on the sales side. We’re also starting to see a little bit younger generation, more tech-savvy leading the channel. And we’re seeing a lot more probably because of covid remote interaction, driving revenue. What are you seeing are some of the trends and data that you’re seeing in actions that lead to revenue or demographics of who’s in the channel?
Larry Walsh: Well, let’s start with remote selling, you know, and I think that this is something that is here to stay. It’s going to rethink the way that we engage with channels and engage with customers. And so I think that 2020 taught us that our second office doesn’t necessarily have to be an airplane seat. And I think that there’s not going to be a whole lot going back. I’ve been trying to tell people a lot of people I talk with around the channel, her longing to get back on the road. And so I say, OK, well, let’s talk about that. The earliest you’re probably getting back out in the road in a meaningful way or a way that starts to look like it used to is probably October ’21. It’s not going to come any sooner. And it all depends on vaccinations and reaching that critical mass of herd immunity The the other thing we’re seeing, though, is that much like you’re talking about the shift in technology savviness, there is I think the one thing that the channel is is very interested in it comes up in our research, is that they are looking for greater levels of automation. They’re looking for more data, more insights to drive the decision-making both organically and externally generated, you know, shameless plug. That’s what I specialize in, is the externally generated stuff. But I think the other thing beyond all that is we’re seeing a greater globalization of the channel as well, and so we are particularly with larger companies, but even in smaller companies, we’re encountering people, more people from all over the world with different experiences, different perspectives and different voices. And I believe that that bodes well for the future of our industry.
Daniel Graff-Radford: And I think that makes a lot of sense here, going back to something that you said at the beginning, talking to your customers, that optimistically, you know, face-to-face selling will start again in October depending on travel restrictions and immunizations mask all of that. One of the things that we’re seeing in our software from our customers is massive trends in some of the remote security companies that are helping with endpoints with people at home, the software that helps people rethink how to configure their op, their office space, to be less oriented to people going in every day. And so I wonder if come that October, if there’s nowhere to fly to. You know, you look at people that are actively trying to end their leases or try not to to to have places, you know, you can still fly to that location and take someone out for a meal or meet them in a coffee shop or a coworking space. But I think we haven’t really figured out the nonoffice sales model for when travel happens again. I think it’s going to be an interesting, different world that I don’t think a lot of people have thought through, nor how could they, because it’s kind of early.
Larry Walsh: Well, we wrote I penned a note to our clients about the California exodus, HP’s moving. Oracle’s moving. Tesla’s moving.
I think redistributing the tech industry across the country is a good thing. It will expose, instead of concentrating everybody in Boston, in Raleigh, in Austin and in San Francisco, you get a diversity across the country and help lift the economic development of communities everywhere. But I also think that this trend is going to make make channels more important first, it’s going to be liberating because we already have and we will continue to hire people based on their talent, not based on their location. So we will get the right people at the right time, regardless of where they may be.
Daniel Graff-Radford: I think that will be really interesting. I think everyone is on the edge of their seat to figure out when travel happens again. What does it mean? You know, not just here I am in Atlanta at Delta Airlines is super fixated on learning that. But, you know, the rest of the world, you know, what goes back to the way it was and what changes. And I think there’s going to be a new way that face to face meetings will be important. And I like your your idea of it being hyper local. And I wonder how it will shift as as you just said, people are moving all the time. I can’t get through a day without talking to someone about them moving in or out of, you know, a tech hub or somewhere else based on all these changes. It’s an interesting flux.
Larry Walsh: Well, there’s there’s another there’s another voice. There’s another voice, another actor in this conversation that we often overlook. And that’s the CFO. And the CFO has learned that, again, if you look at some of the earnings statements from the technology vendors, the CFO has learned, hey, we could actually make sales go up and not while not traveling.
What does that tell me? You know, we did not spend a million dollars sponsoring a PGA event to have 50 percent of the attendance be our staff. You know, so you can start to see that we in and I’ve and I’ve said this to channel chiefs. And their staffs is that. I don’t say I’m not trying to say that we shouldn’t travel. I absolutely think travel still will be essential going forward. But we’re going to have to think about ways of what what is justified travel. And what is the ROI that gets attached to it, because we’ve now learned that we can do it differently.
Daniel Graff-Radford: Yeah, I think that how people gather together in person within a company, how people decide to meet between partners and customers and how travel works and where people are located, that same CFO is noticing fantastic productivity results with all of these new tools that are out there without people sitting around with each other and a lot of cases as well. And employees are noticing how much nicer it is in a home office than in a cubicle with a lot of noise. And so they’re there as some of these costs are leaving and benefits are realized. But it’s not fully realized because there is a collaboration that’s missing. There is a relationship aspect that’s missing. And so there’s going to be a different balance than we’ve ever had before. And figuring it out together will be really interesting this year.
All right. Wrapping it up with the final four questions. Number one, if you had a superpower, what would it be and why
Larry Walsh: the greatest superpower anyone has is reading. And I just tell people, you know, you don’t read, read whatever you can and absorb and try out new ideas and new thinking and use it as engagement. jokingly say to some of the companies we work with and said, if I was Bruce Wayne, I do channel consulting for free because I love what I do. But the reality is, is that we humans were blessed with this huge brain and more of us need to use it in the way we feed that brain is with words. I remember the first time someone explained philosophy, a love of learning, and it sort of stuck with me as a key human trait for success.
Daniel Graff-Radford: And, you know, taking it back to the channel, can you share with us one mistake or one and one success that you or someone else has had the channel so our listeners can learn from others?
Larry Walsh: The one mistake and the one success I have are the same. You know, and I look forward to, you know, once a year, I have a really, you know, pretty good mistake I make. And but it’s also my success, because that’s where you come back to. I’m talking about learning.
I learned, I adapt, I get better, you know, and we need to know one of the things I think as an industry we need to get better at is accepting mistakes and failure. You know, as I said this with my team when we kicked off the year, you remember that movie, that liner Apollo 13, where you said, you know, failure is not an option. No failure is absolutely an option and we need to learn to embrace it. Sometimes you have to try things and fail. And I know somebody is probably thinking listening to this is that. Yeah, yeah, yeah. We hear that all the time. I go, yeah, we hear it, we know it. But in business, there is now an expectation that failure is not an option and it actually stymies progress. It stymies it squelches innovation. And so I absolutely encourage my team to fail.
Ok, and what’s an example of a book that you recommend to someone who has made the decision that they want to be in channel leadership, what is something that they can learn from the one I would recommend, I thought was really interesting for its content in this concept. It’s called Skin in the Game. I actually I had to put it on for me to see Nicholas sleep. He also wrote the book Black Swan, probably the most misused term regarding anomalies in business. But Skin in the Game is most recent work and talks about to find success with with know again what I was describing, those competing people or entities with those competing interests. You have to give them a reason for being there and that’s having skin in the game. If you’re just there trying to entice them without a without a definitive means of meaningful impact on their world doesn’t work out as well. So it’s it’s a good read. It’s a very good read.
Daniel Graff-Radford: I think that’s a great choice. And, you know, given that you are an analyst and researcher and you’ve been doing this for a long time, I’m excited about the final question. You know, looking five years into the future, what are some changes that are happening now that you think people should be thinking about that will create big change in the years to come?
Larry Walsh: This is this is profound. You know, it’s easy to point to a shift in buying patterns and in mechanisms. Everybody wants to point to marketplaces now as well look at this. Reality is, is that we’re going to become increasingly dependent on analytics using data to drive decision making, but a lot of that is going to be a shift away from the point of transaction and more to the post-sales engagement. We see a lot of people talking about it now in the conventional way of describing this now as customer experience. I can tell you that most of the talk about customer experience today is lip service, but it’s the customer that is driving this conversation, not the supply side, the vendors, and the partners. It’s the customers that are demanding better levels of customer experience. And it’s going to require us to rethink, well, what is it that where do we actually create value? And today, the value in many regards is created at the point in the time of transaction. And where it needs to be created or maintained and cultivated is in the post-sale period between the transaction and the renewal, and that’s where I think you’re going to see a lot of this shifting. And that means that there’s going to be a huge shift in the channel paradigm. We foresee a future and could come within the next five years where partners are no longer transacting sales.
Daniel Graff-Radford: Larry, I love it, I love it at the beginning of this conversation, you talked about that intersection between partners and vendors at the point that makes the most sense for the customer. And I love that you’re also talking about the future of these partnerships being centered in the customer experience, the post-sale experience, and where we could design amazing customer experiences through partnerships where those intersections hit. I think that’s I think that that is a lovely way to sort of think about where it’s been and where and where the puck is going to be. And, you know, very grateful to you, Larry, for joining us here today.
Larry Walsh is the CEO and Chief Analyst at Channelnomics. And I really want to thank all of the listeners that have taken the time to join us here at the Partner Channel podcast. If you like what you’ve heard, I want you to subscribe anywhere that you listen to podcast. And if you want to learn more about Allbound, you can find us at Allbound.com