From competition to complement – why and how channel partnerships can work in a cloud world

Can we be all things to all people? Of course not. This was the driving theme behind our presentation at a recent event for managed service providers (MSPs). We’re taking a fresh look at how channel partnerships can work in a cloud-first world and trying to address the issues stifling growth.

Channel partners need to add value for their customers while retaining margins and transitioning to annuity revenue streams. Juggling the multiple priorities of change and growth is challenging but as we transform and start building out new practices, customers expect the same high level of service from our core business.

Thriving in this challenging and changing landscape is tough. It’s something we’re coming to terms with, having had to look at our own strategy. At Rackspace, we’ve had to evolve faster through working with different partners, whilst building our portfolio and keeping pace with what our customers need.

Of course, forming partnerships isn’t just about getting the right portfolio, it can also be about market coverage or delivering to new verticals. More and more we see competitors needing to partner together to satisfy all their customers’ requirements.

None of us can be everything to everyone, all the time and everywhere, though increasingly, customers want you to be. The good news is, you don’t have to be.

How are expectations changing?

So much has changed in the last few years, which has in turn led to emphasis on the many benefits of partnering. We’ve got Infra as a Service, Platform as a Service, Disaster Recovery as a Service and, in fact, the development of ‘Everything as a Service’.

And where has this led channel partners? The service wrappers that resellers and MSPs used to put around traditional technologies such as the hardware, networking, software and the like have been absorbed by the vendor – it’s all ‘part of the service’!

This leaves us all needing to evolve, using approaches that reflect the new realities.

Rethink and reinvent

To be successful, we’ve had to take a long hard look at what we think we do, what we actually do and what customers want, today and in the future.

Three years ago we were a Managed Hosting Partner, competing with Microsoft on cloud opportunities. Today, we’re the largest UK reseller of Azure because we took a decision not to compete with one of the largest global companies.

Our journey has been about moving away from hosting and competing with the hyperscale providers, instead partnering and becoming the company with the most competencies in the world across AWS, Azure and Google Cloud Platform, as well as VMware and security. In fact, we now get a significant amount of our business leads from our partners, combining our skills to provide compelling solutions for customers.

This is about finding synergies, instead of trying to go out there and do a sub-standard job of each others’ areas or spending years and millions on R&D developing services or tools someone else is already doing well.

So, it’s time to think about where your greatest strengths really lie.

Working out your strengths, and your gaps

It can be easy to start acquiring lots of partners, but our experience tells us you need to build quality and long-term partnerships which will ultimately help you achieve your business goals.

Success is about finding the right partners to complement your business, and this fit very much depends on the thing you can do better than anyone else. You need partners that can complement where it makes sense and not compete on your core elements.

Of course, this process isn’t just thinking about holes in your portfolio, coverage or ability to access particular segments, but also dealing with the increasingly complex skills required to build a successful tech business in today’s cloud first world.

Fixing your talent challenge

Highly certified cloud engineers are not easy to come by – certifications from the major cloud players are tough to get and those with them are commanding ever better rewards.

It’s something we’re only too familiar with. For example, as we’ve been building our public cloud practice, we recently sought to recruit cloud engineers for one of our business units. We received 200 applicants for one role, but out of these, only one potential candidate. The fact is, most of our specialists come from internal promotion. We’ve identified that continually investing in our talent keeps us competitive – both in terms of retaining our people and satisfying customers’ needs for highly experienced and certified specialists.

Working with partners helps when it comes to bridging the skills gap – our partnerships aren’t just about technical facilitation, but getting around the table with our partners and prospective customers to seal the deal together.

Where do want to grow next?

The 24x7x365 customer isn’t going anywhere. If anything, the customer that expects the exceptional round-the-clock service is only going to get more demanding.

As I said upfront, we’re actively reaching out to new partners, looking to build practices around them, managed by a channel-focused team that enables us to give and get the most with partners and look for new opportunities to succeed together.

We’re keen to discuss the possibilities with you, so if you want talk around how partnering could shape your future strategy, feel free to drop us a line.

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