Transcript

Ian Moyse:   I’ll put the hard question out there then and then I’ll give you my opinion on it. So the question I would pose would be, Are we going to see an increasing shift from channel sales to direct selling by traditional vendors?

Announcer:  Welcome to the Software Channel Partner Podcast where you’ll hear leaders of partner programs talk about their greatest challenges and most successful solutions and now your host Louis Gudema, the president of revenue & associates.

Louis Gudema:  Welcome to the Software Channel Partner Podcast where we talk with leaders in software partner programs to learn about what’s working today. I’m Louis Gudema, the president of revenue & associates where we help companies grow faster by enabling their channel partners to market better and grow faster.

Today I’m talking with Ian Moyse, EMEA sales director for Natterbox. Ian was the sales director for Rackspace’s UK new business sales team, and has had key channel roles at NetIQ, Webroot and other companies. And Ian has served as a board member to many companies. Ian, welcome to the podcast.

Ian:        Hey Louis, good, good to be here today. I hope I can add some value to your listeners.

Louis:    I’m sure you will. Just before we get started, I noticed that you recently tweeted about the Ancestry DNA test. Did you have that done?

Ian:        Crikey, you’re monitoring, that’s an interesting specific. In fact I’ve done the Ancestry piece before in a different way where you pay a company to do it. So I had that done as a present for my parents a long time ago of the whole history, and there was nothing horrific in there good to know. But there was lots of interesting stories that came out about. So I’d invite anyone to get that done because it’s often very intriguing of where your family truly came from.

Louis:    Yeh, I had that done through Ancestry also. There’s other services that do it too. I was very disappointed to find absolutely nothing of surprise. No good stories that were lurking in our past that we didn’t know about.

So please tell me about your career path and what brought you to where you are today in your channel work.

Ian:        Sure. I’ll do it quite succinctly so we can get into some meat of value for the listeners. I fell into computing early on by seeing one of the old 1K computers when they came out, was hooked, ended up then everything on programming ended up at IBM being a programmer analyst. And in a couple of years into that left to do sales and purely because I saw salespeople out there who at that time my opinion was I knew better, I understand this stuff, but they’re earning a lot more than I am. So, and they’ve got the big mobile phone — it was a brick at the time — and a car and all the rest of it. So I went to the shiny side.

Inside sales very quickly promoted to external sales and it happened to be in channel — wasn’t that I knew what channel or direct sales or the difference was at that time, it just happened that the first job I found was in Novell distribution, many years ago. Novell at the time when it was a 95% market leader globally on local area networking. And that’s how I got into channel, and it was all I knew. So I was in channel up until about six or seven years ago. Throughout my career I’ve spent 20 plus years in channel, building channels as you describe for different companies, and being one tier, two-tier. So I’ve worked at the multiple tiers, reseller, distributor and vendor and seeing all the mix. I’ve got a fairly good understanding of all the different VARs, OEM type relationships from varying different sides of the coin.

Louis:    Well it’s interesting what you say about Novell. Things do change.

Ian:        Oh Yeh.

Louis:    They were the huge, huge leader in networking 25, 30 years ago and now of course they don’t exist at all. So the channel, you’ve written about this too, how the channel or rather the cloud has morphed over the last 20-plus years. And Larry Ellison at Oracle was talking about really cloud computers in the 90s. But you’ve talked about how ASP came and went, ‘application service provider’ and other models. How have you seen that — over 20 plus years — how have you seen that evolution and how has that affected the channel as each of these phases has kind of come and gone?

Ian:        Yeh, you’re right. And to context that I’ve lived the change. I’ve worked now in the cloud sector, cloud-computing sector for the last 13, maybe approaching 14 years. Initially when I moved into that, I did that through channel. So I helped build channels for cloud and understanding the difference, so I bridged from being in a channel traditional product model into cloud. And for the last five or six of my 13 years in cloud, I’d been in running direct sales teams in cloud. So I’ve got the view and I’ve also transitioned myself because I could see some challenges coming and etcetera. So let’s maybe talk, and I’ve written papers on this when I tried to help channels transition and understand that. So let’s maybe talk through a few of those bits in summary.

So I think we need to go back to how it used to be and the value of the channel and the key values that were there. And if you think about it, the vendor, typically held a relationship with distributors and sometimes the key resellers. The distributor was mainly resellers. Sometimes end user a support and sometimes the vendor would engage the end user with the reseller where it was a big opportunity. But in general it was vendors would sell to distributors, distributors would sell to resellers, and resellers would sell to the end customer, the end business.

And the key values that the channel, the reseller level had in bridging the gap between the channel and the end-user were things like the breadth of product they could hold and sell, i.e. as a reseller to have a credit line with every vendor, if they would even allow you to do it, would have been messy and complex. And you would have been a small fry, right? If you were a customer buying some servers from HP, and four servers, the technology and the models then would not have made that a cost-efficient model for anyone involved. If you’re a, you know, HP to sell to you in whichever country and locale you’re in, they wouldn’t have been around the corner from you. Whereas you would typically have had a reseller that was fairly local to you. So therefore location came into it as well that you. Somewhere in your County or your state if it was the US, you would have a partner who you had a relationship with. They were local to you. So relationship, locality and they could sell you a breadth of products so you only needed one credit line and often they’d carry stock. So on the key products they might have stock of things for you.

So the whole operation and those were the value propositions that made sense. And they would come and install the product for you and be your maintenance partner who could easily, if something wasn’t quite working, come by and help you or replace a product or install something. And that was the model we were in, and it worked for a great many years and it worked because the nature of the products were physical. The software came on a CD. It used to be disks, right, you may remember where you get a bit of software, it’s on 72 5-1/4 inch floppies or whatever, but it was a physicality to things.

And for me running channels at that point, you know, what did I look for in resellers? It was at top level, it was one of a combination of four things. It was, did they have geographical advantage to me? There was a region there where they served that region and they were well known in that region, therefore they could be my conduit to customers in that region. What relationships did they have? Because it was a lot easier than as a, whether you be a distributor or a vendor, how you’ve got to start a relationship from scratch. Much easier to have an agent who had relationships already and could leverage those for you. I also looked at what vertical expertise they might have. Maybe they specialize in legal firms, therefore they could be a good partner for you because they understood the terminology and the processes as well as having the relationships.

And the other thing I looked at is what integrations could they add. If I was a distributor or vendor with a technology, that technology didn’t work in isolation and did we have the skills to be able to install that and configure it with Citrix or with Novell, as we mentioned, etcetera. If you had a reseller who actually sells multiple of those products, they could compliment your product with the value they had in technical expertise in these other products. And bringing them together for customers and installing them and knowing which patches to apply and how to integrate the two together using ODBC drivers and all that stuff as the world was.

Louis:    So you’re saying that when this was more of a physical industry going through distributors to the partners was the way that most of it was done. Although today I hear when I interview people on the podcast, quite a lot of companies, they may be using distributors, but they also have sometimes thousands of direct relationships with partners.

Ian:        Yeh. And so things have changed, right. So that’s where we, if you look back at the baseline, I guess where the industry developed, that’s sort of how it worked and it made sense. What we’ve seen though is technology changing, what needs to change. And the changes are coming, if you think about it, from the end customer attitude of buying and their expectations. And they’re coming from the value proposition that’s offered through the channel. So let me throw some things out there. So in cloud, what’s different? Well, there’s no stock needed, right. There’s no physicality of a, Here’s a CD or Here’s a bit of hardware because all you really need — in the majority, and I’ll talk generally, there are variances in each cases of course — but is a web browser. If you can log into a web browser, you can provision platforms on AWS and Azure and spin up servers and then dump software onto it all from within your PC as you’ve got.

If it’s software as a service, you can just spin up a login often with just a credit card and be up and running within seconds. So there’s no physicality of anything to move around or usually there’s nothing to even install. Sometimes it might be a plugin to your PC or to your browser. But reality is that that part of stock holding and spare parts and all that has gone.

Credit line: it used to be also that resellers are, I miss that out when I discussed a second ago would offer a credit line to the customer and buffer that back up the channel because if you put a product on site, having a reseller would basically carry the credit risk. That was one of the values that if something happened and the customer didn’t pay or went out of business, there was a protection sort of line to the vendor at the back end that you’re not having to deal with credit lines of, you know, the breadth of every customer out there, which was just too broad across the globe.

With cloud, with a credit line that changes because customer doesn’t pay, like Netflix, right, if you don’t pay, the service gets suspended. So your risk factor is minimized but you haven’t sold something out there that you’ve got to chase collection on because you’ve got a level of control of suspending access to the service. Don’t pay, you don’t get access. Installations gone.

Louis:    And those subscription fees are sort of like the monthly fees you might’ve paid on something that you had on credit in the past?

Ian:        Yeh.

Louis:    So you’re really paying for it over time and the time is as long as you use it.

Ian:        Exactly. But you’ve also got that debt control piece that the customer doesn’t pay you can do something about it. Whereas previously on product, once it’s on site, you can’t go back in there and take the product away, you just couldn’t. So it changes the dynamic. Installation: what installation is there with a cloud service? You can spin up a service within seconds, perhaps a marketing service of which there are many out there. Marketing will sign up on a credit card with their own budget and be up and running and be able to load data and start doing stuff this afternoon. There’s no: I’ve got to buy a server, deploy it. That’s all handled as part of the underlying piece of a SaaS service for example.

Maintenance: well there’s no maintenance for someone to go on-site for anymore for cloud services. You may maintain their local PCs and printers, etcetera, but the core services that used to be server-based, really, think about Office 365. The maintenance is based in it and baked in and it’s delivered by the vendor. There’s nothing for you to do and go on site and upgrade the server or have a backup. It’s all handled as part of the inherent cloud service, you know. And then you start questioning the values that I described. Is location as important anymore. Is a cloud services and I work in the cloud vendor world now selling direct, we’ll sell to customers around the globe, often large transactions, having never met the customer. You’ve done it over the phone and you’ve done it over the web. So yes, you’ve spoken to them and where it’s large, yeah, you may have met them, but often we’re transacting large, hundreds of thousands of dollars or pounds transactions, having never physically met the client. So the value of having a reseller locally is in question. You know, is it really as valued in the cloud world as it was before? But there are still value adds in the cloud world for a channel partner, think about.

Louis:    Well, you’ve got a very different buying experience on the side of the customer too because everything in the past used to go through IT. And now you have every department may do an end run around IT and buy its own solutions. HR will buy the HR, SaaS software and marketing will buy its MarTech software. And they may have to get some sign off from IT or they may have to get some cooperation from IT if they need to integrate with an enterprise database. But quite a lot of this now is a totally different buyer than who the partner was working with in the past.

Ian:        Very good point. And shadow IT, as you described, absolutely we see that where different departments have their budget can spin something up and it’s really a question of the company’s policies, whether IT is even involved, whether they know the transaction’s gone on, which has a security implication of course for the business. So I’d advise IT should be involved as part of it. But you’re right, the line of business owner with a budget is now capable very much to not only spin up a SaaS application, but to a degree to spin up a server with AWS or Azure fairly easily. And in a way that enables them to pay monthly or with some of the platforms we now say compute down to the second billing. So the world’s changed.

Louis:    So all these changes have happened and it’s affected the vendors and it’s affected, the partners and the customers. How well do you think partners have adapted? What are the biggest challenges? It’s kind of whiplash and I know when I talk to other vendors that they say some legacy partners are challenged to deal with this new world. How, in your experience — and you not only do your work at Natterbox, and I do want to ask you and I should have at the beginning to tell people what Natterbox does, what it is — but how do companies, how do vendors successfully enable their partners to be successful when this rate of change is so rapid and complete?

Ian:        So I’ve seen the struggle and I lived it, right? I was in channel businesses trying to recruit channel partners, which was my status quo mantra so to speak, that was all I knew to resell cloud. And it’s hard and it was hard back in 2011, 2012 when I was pushing this and wrote a whole series of white papers on this, of all the challenges. And went around educating around Europe and also in the US in keynote speaking of these are the challenges. The problem is the resellers who didn’t come to those sessions are the ones that needed it. But the ones who came were trying to figure out how do I step across the chasm? And it is a chasm. It is not an easy thing to transition.

And one of the foundations I always said to people is How you reward your salespeople and your line of business, your own line of business processes. Because if you’ve got it, Here’s the option, Mr Salesperson, you can sell this sale here, which is all upfront and your commission plan pays you upfront on for 150,000 pound or you can go cloud. And the initial transaction I’m making the numbers up of course is 20,000 pound, but you’ve got annuity year on year or month on month, however it’s structured. But how you’re paying them. And if you’re paying them on the initial transaction straight away, you’re floored. And so that was the big one I said to resellers, You’ve got to look at is your commission plans are not structured around a subscription model.

And salespeople will absolutely have a driver to how they are goaled. And then they’ve got a mortgage to pay, they’ve got bills to pay, and if they see, well if I sell, this might be right for the customer, but I own a tenth of the amount as an example. Guess where their focus is going to be? And cloud at that point needed more selling it and had more challenges of security, adoption, and questions from customers. You know we’re in a more mature world now having moved on a number of years where a lot of customers are cloud committed, they’ve got multiple cloud systems in place. And any project they go through, they will look at the options including cloud options. And that’s what back then it was portraying of, you need to consider cloud in every project. It may not be right or appropriate and you may go private cloud or you may go on network, but at least consider it.

Now in the age we’re in 2019 approaching 2020, I think we see much more maturity in the customer where they always will look at cloud. But the challenge is still there for the reseller. And exactly what you said I saw a lot of legacy resellers struggled. And the challenges, and I appreciate the challenges, what happens if your customer goes cloud to you as a company the billing profile is different, right. It’s a longer-term, a cloud model and the annuity and the longevity of the contract and the repeat transactions are better for your business. Short term, it’s a pain. And I lived this and when I speak at events, I’ve had a good friend of mine, who runs a reseller, he founded his own reseller many years ago in the software world, in the NetIQ technology world, those days when I was around that space. And he’s still the CEO today and today they are a pure cloud reseller, and they focus on Google Compute. And they’ve now actually got to a point where they’ve engineered some of their own applications on Google so they own their own IP.

And when he talks, and he’s got a beautiful story of, I tried to transition and do both. I was a product reseller, put my feet in the cloud camp and do both and I found, Do you know what, I don’t think we’re going to get there. So he risked his whole business for a two year period where he only commissioned salespeople on the cloud side and said, Look, we have to, I can see where we need to get to and I need to force this. I’m going to go the hard way. And so he talks it, Guys, this is hard, you really need to commit to transition to cloud. However, he gives it more story than I’m giving, but he talks importantly about the other side, what he’s seen in his business since he made it. He said he risked his business. He could have, and it was hard for two years. They went backwards before they went forwards, but now they’re more profitable. They can see where they are for the next three, four, five years based on the contracts they’ve already got with longevity. It’s more fun, but all his business metrics are more predictable and more successful. But it was hard, but it was hard.

Louis:    Yeh. That recurring revenue is a wonderful thing to have. But did he have to give, or do companies, do partners typically have to give their salespeople a bigger base for a while to tide them over from that product sale commission to the cloud?

Ian:        Well, what he did was put commission plans in place around cloud that were incredibly attractive, but cost him as a business. They cost him as a business. There’s no question. He’s very open about that. Was he paying over the odds during that transition? Yes. Because his view was What we don’t want to do, we’ve got good salespeople, but they’re not experienced in selling cloud, but I need to get there. I can see the metrics for my business, why we need to do this, so I need to support them to do it. I can’t just say to them, Just sell cloud, I have to incent them. And he did that. He rewarded them financially and incented them for what was going to be a hard transition. And as it turned out, he talks about it took him two years to tip the chasm between being where he was and being what you could consider a truly cloud reseller where the revenues were paying for the costs.

Louis:    He had to front-load more of the commission than the actual payments from the customers for those cloud services would.

Ian:        Yep. Well all he can say now is what he’s ended up with is a more successful business and he also talks about, he carried most of his salespeople came across with him. He lost a couple in that transition, but most of them are still with him today. And he’s in a much more successful, stable place where he can predict where he’s going to be in three or four years. Which in the old product world you had to resell it every year, right? He pretty much knows next year he’s going to, even if he stopped selling and turned his salespeople off, he’d be in the same place he is now, if not growth from the customers he’s got. That’s a really attractive place to be.

Louis:    Yeh, absolutely. I used to own a marketing agency and we were project to project and then we transitioned to a SaaS service before it was called SaaS. And specifically because I wanted that recurring revenue model, I didn’t want to have to wait for the phone to ring. And sometimes when the economy wasn’t very good, the phone stopped ringing. But that recurring revenue kept going all the time. And so it’s a wonderful thing to have. Let’s step back now for a second. And why don’t you tell people what Natterbox is and what you do?

Ian:        Sure. So Natterbox we are a SaaS telecoms provider. So we own our own SaaS IP and we’re also a registered telco around the globe and what we’ve built and delivered, now we’re in our 10th year is the most integrated telephony platform for Salesforce. So we’re very focused on that market and building out value around the Salesforce ecosystem, which I think’s interesting, we’ll maybe touch on in a second, interesting how they’ve gone to market and what their channel looks like. So, yeh, so that’s what we do. And we sell direct. We do have a number of specialist partners, but not the traditional reseller model you would expect. We have partners who have OEMed parts of our technology into their platform, and we work with Salesforce partners who implement Salesforce but do not resell our technology. They’re implementation partners with a relationship with customers. So a very different channel than I spoke about, I was involved with many years ago.

Louis:    Okay. And you’re on a number of boards and advisory boards. Is that to help companies with this transition to the cloud?

Ian:        Well, to offer a different vein, we’ve all had different experiences across our career. So I’ve done direct, indirect. Where my value comes from now for a lot of these industry bodies and companies that I’m involved with is my experience of cloud, selling cloud, both direct and indirect and the challenges of cloud sales teams and getting to customers. So that’s sort of my value add. You know I talk a lot around social selling and personal branding and events. So it’s, I bring a mix of advice to these companies and they’re typically high growth companies in the cloud sector.

Louis:    So for Natterbox, you were saying you have a very particular approach to channel and it sounds like technology partners?

Ian:        It’s partners, you know, I haven’t, and it would have been very easy for me here and also in my previous role at a CRM vendor Workbooks where it was a cloud SaaS offering. I could have fallen back into my old pattern, right, which is go and recruit normal channel resellers and try and sell. But the world’s changing. And in the cloud model, what I’ve seen having come from the channel model is, it’s very easy if you’ve got a very strong technology platform to sell direct globally very quickly. And the challenge with resellers, and the pros I’ve talked about, but the challenge is you’ve got to bring them up to speed and they’re not just going to sell your product. And what I’m involved in now is very complex business process type products, which aren’t simple for a reseller to adapt and adopt.

And Natterbox we sell only to Salesforce customers. And guess what? Salesforce sells direct, Salesforce doesn’t sell and license their platform through a reseller channel. Their channel, they’ve gone to market with is implementation partners. And that’s where there’s value, right. Whereas a cloud vendor, you license the technology to a customer, but the customer in complex technologies like ours, where it’s business processes, needs to configure it. And build workflows out around their own business. Do you want the vendor to do that directly or do you want someone more local where you’ve got a partnership and understands perhaps your vertical and understands your business and partners with you.

So we often work with Salesforce partners who have implemented Salesforce for a customer and understand their workflows and their nature of their business and how they’ve implemented as you described their martech. And can integrate our telephony amongst their, Pardot for example, and their Salesforce and brings it in and integrates it and builds the workflows out to combine those platforms. And that is an added value that makes sense.

Louis:    So does Natterbox focus primarily on Global 2000 or SMB also or what level are you selling at?

Ian:        Well, we sell all right across, SMB, mid-market and enterprise. We’ve got global customers who use us across, we’ve got one that uses across 28 countries, another one 14 countries, just rattling them off. So we have big brand names who use us across the globe. And we also have local companies who use us for 20 users for a phone system. The key being, if they’ve invested in Salesforce. The more they’ve invested in Salesforce as their core data platform for the business, the more they will get value from us. Because we put all, we basically say, Right, all your telephony data now becomes a core part of that platform. And it’s one data repository. So in Salesforce you have your customer data, you perhaps have your transactions, you have your martech data around your touch points. You now have your telephony data as part of the same dataset. So you now have a more of a 360 view. That’s where we fit. So where that fits we’re the right technology for that customer.

Louis:    So we were talking earlier about how technology sales used to go through IT, but now a lot of technology is sold to departments with IT just perhaps involved somewhat, but not centrally. This sounds like, Natterbox sounds like something that might be sold to the sales department, sales ops, but at the same time you’re talking about a telephony system and that’s an IT thing. So who do you sell to?

Ian:        Good question. Absolutely we’re a prime example for that. And it’s all of the above and more. So we will often engage with who will be the lead engagement with us. Sometimes it will be a head of sales, sales director, sales VP because they want to improve their sales engagement. They may have a need for, they want to, you know, the world’s changed, they can’t get hold of as many people so they may be looking for how do we get more customer connects in a day. And we’ve done that recently for a customer, we increased their customer connects by just under 30% by doing one thing that our technology allows. So their cold calls success rate has gone up, for example.

It may be the marketing director who is looking to more close-loop know what goes on, because challenge for them is they’ll do an event, they’ll run a billboard ad for it. Depending on the nature of the business, they’ll do something marketing spend wise, but customer calls that come in, guess what? They’re reliant totally on the sales rep asking where did you first come across this and log it against the campaign. We can do some clever things that will close loop that. So if a customer calls in before the rep even answers the phone, we can tie it to the right campaign. We know what campaign created that phone call. So, martech.

Customer experience leader: You want to improve your customer journey when they inbound to you. We can improve the customer journey, personalize the phone call. Wouldn’t it be great if you call a business and it says ‘Hi Ian, we detect we didn’t call you back on your open support case yesterday if that’s what you’re calling about press one if not press two for everything else’. Straight away my customer experience has gone up because the phone system is personalized and shortened my phone journey the same as you do with websites. So we see that side of the business.

We also do get involved with technical people leading the project where they’ve been tasked with improving the quality of the phone system and they’re involving, in that project, perhaps sales marketing, customer experience. And also service and support directors get involved because they’re looking to improve the customer’s experience when they get support and also improve the agent’s experience. How do I get my agent more effective to close a service ticket, first call resolution? How do I improve the number of first-call resolutions?

So we have a plethora of different techniques and technology and processes in our system that help all of those areas. And technology being the underpinning piece, yes, IT gets involved. And often IT gets involved because of what we’re doing. Because remember what we’re doing is bridging a software as a service application sat inside Salesforce, but also with the telephony. And the telephony bit is often historically a customer will either have a platform, so they may have a PBX, Avaya, Mitel, Cisco out there and don’t want to replace it. You know they may have a heavy investment in that and a support team with experts. We can do all we do over the top of those platforms. So their questions become lots of questions around how do we integrate. How do you sit on this platform? Do I need to reconfigure anything? Is there any limitations?

So IT often gets involved at some point, whether they’ve led the project, they’r brought in by the line of business owner, or we’ve suggested You should have IT involved in this to validate and make sure you’re comfortable with what we’re delivering and the level of security we provide. Which we know they will be, but it’s having that engagement during the process so that it makes it an easy adoption for the customer. So all of the above, as you described.

Louis:    And your sales is direct, so that’s pretty complex. How then do you enable your implementation partners?

Ian:        So we work with them at different degrees and of different types. So it can be as simple as We’re doing the telephony piece — and that bit we tend to own the telco piece because you really need that expertise and we’ve got the experts in our teams to provide that. But it’s the Salesforce side, it’s bridging Salesforce with Natterbox. Often what the customer wants to achieve will be a workflow or a process that takes a… Let me give you an easy example. You have a website where a customer fills in a form and it comes into Salesforce. Often what they want to do is do things like instigate an immediate phone call from that to the customer as quickly as possible. You don’t want to leave it three days till you call them back. It may be you want to put that into a call queue. So that’s a bit of Salesforce workflow and processing, and some of our side.

So that’s something where often partners can add value to the customer and it creates Salesforce configuration work for our workflow to enable what the customer wants to do. And they can now do it because we’ve provided them extra Salesforce functionality. So the Salesforce expertise that a Salesforce partner has suddenly gets extended because they have process calls available to them that weren’t there before, that are telephony calls. Instigate this call into a call queue so that it goes into the queue for the users and that can be instigated from Salesforce.

So the Salesforce implementation partner now has access to provision a lot of other things they couldn’t before because the telephony was outside the platform. So we work closely with them. And the gain for the customer is, which parts sit with Natterbox correctly and which bit sits within Salesforce, and let’s do the appropriate bit where the expertise lies.

Louis:    So I’m going to ask you two questions that I often ask people when I’m hiring. So this is some variation of that. So first what do you think is a channel program or a campaign that you’ve done that you would think of as especially successful, and it could be before Natterbox, it could be at another company, one that you’re especially proud of?

Ian:        So I’d suggest one would be recruiting new partners. So engaging with a partner rather than sell-through to the customer. And it was an educational campaign, and around cloud, so exactly what we’re talking about. We built a campaign which was to add value to customers of training them and giving them insight into what is involved. How do you encompass cloud technology into your business in a successful manner? And the tagline around it was something like, it was many years ago, ‘Everything you wanted to know about selling cloud, but we’re afraid to ask’. And we involved in that speakers, so we made it very educational. It wasn’t pitchy about our product at all and that was I think the value we guaranteed: You’re not going to come along and it’s going to be totally centered around our product. This is going to be: here’s the commission plan, here’s the emotive piece, here’s the difference is you’re going to get from your customer and the value and how are they going to perceive you. And we also had, the customer I spoke about speak around having an external speaker around this, whether it be a Gartner or an analyst speaker or a reseller who’s gone through it.

So what we position was absolute value to you. And we’ve packed rooms with that and we ran that across Europe. So I remember being in Holland, in the Nordics in the UK and delivering the same piece. But it was a robust piece of education and true value that you’re going to go away with genuinely things you’ve learned and ideas that no one else has shared with you, because everyone’s telling you about product. And we didn’t mention it apart from our logo on the screen, we didn’t. We guarantee that we will not try and pitch our product or this is only works with us. This is generic, true educational value for you. And we packed the room with CEOs and MDs of partners lapping up value, because we truly were investing in their business for the future. And that worked really well.

Louis:    That’s a great example. That’s a great program. So now what’s a program or a campaign that wasn’t successful that you did in the past that didn’t perform as well as you had hoped or expected and why do you think that was?

Ian:        Sure. And I think that would be a sale through campaign again in cloud where we thought just putting together something slick of clouds. You know and this was the old days, right, so we’ve learned better now. But what was going on then, and hopefully people aren’t doing this today, was Cloud’s going to save your money. Cloud’s going to make you more — it was all the headlines that everyone spouting right. Cloud is just going to save the world for you, generically, and it’s going to save the world for all of you generically, and it’s not the case, right? I learned that in the early days of selling cloud. And how I would position it now is, cloud technology has a great many advantages for different customers and they will vary from customer to customer, but a cloud technology will not be right for everyone every time in every scenario.

So you know, Natterbox for example, in certain scenarios where customers are looking for certain values, outcomes that I’ve described, improve your agent efficiency, these sort of things, we would do a fantastic job for a Salesforce customer. If all you’re looking for is a cloud telephony system that just, you can just dial the phone and you don’t see value in Salesforce integration, we’re not right for you, right? So no cloud solution, no matter what it is, whether it be hosted applications, whether it be a re-platform, whatever it is, is right for every business. There’s no one size fits all in cloud, the same as it wasn’t with old product. And I think there’s been too much of that going on in cloud. That cloud is the behemoth solution to all your woes, will fix your business.

Cloud is a technology that aligns with people and process. Digital transformation has great value and we’re seeing radical changes with customers, but it is not easy. It is not a flick a switch, buy a cloud solution and suddenly your shortage of leads in your business is fixed. Buy a cloud martech solution and it fixes everything overnight. No, it doesn’t. It gives you a more efficient way. It will give you new functions you perhaps didn’t have. It will enable you to do things quicker and faster, more agile. But you still need the people and the processes aligned to that. Too many people have bought cloud and it was marketed and that’s one of the mistakes I’d seen done based on Just buy some cloud and look what it will do for you. It is an enabler but it doesn’t solve it out of the box and you’ve got to realize that.

Louis:    Alright, good example. Don’t oversell. What should I’ve asked you that I didn’t? What keeps you up at night?

Ian:        That’s a really good question. Well in channel, I’ll put the hard question out there then and then I’ll give you my opinion on it. So the question I would pose would be, Are we going to see an increasing shift from channel sales to direct selling by traditional vendors?

Louis:    So I had Jay McBain from Forrester on the podcast.

Ian:        I know Jay.

Louis:    And he said, yeah, he expected there to be, that the channel would be less than it is now, but I don’t know that it certainly wasn’t going away and he certainly wasn’t. I don’t know if he was even saying that it was going to be a minority of sales. They are predicting the channel will decrease as a proportion of tech sales.

Ian:        And I’m going to be giving an aggressive opinion on this. So why did I move out of channel? So I got into cloud, into cloud technology and I was in doing channel for, channel cloud for the first five or six years. And then the next six years or so I’ve done two roles where it’s been direct selling cloud and it isn’t because I saw it’s absolutely dead, but I saw it’s going to get harder and harder because lots of technologies in cloud are selling direct. Salesforce is the easiest example as I’ve already cited, right. It is a direct selling cloud organization which is one of the most successful on the planet and one of the biggest software companies on the planet now. And they do it all directly and it works.

Other companies in the industry, do you think they don’t look at that and compare right and contrast. I also work with a number of other massive vendors, and without breaking names or confidence, understand the conversations they’re having and internally. And what they’ve seen and they’re seeing, is a lot of the partners they’re now working with now they’re more cloud, are not the same traditional partners they worked with on products. So as a reseller or a VAR you need to consider Is it going to switch or Are they going to switch to different types of partners with different value propositions that you won’t be as important to them as you were historically? That’s another dynamic on it. It may not be they switch off the channel but they switch to a different channel.

Louis:    So you know, your Salesforce example is great. On the other hand, I recently interviewed Alyssa Fitzpatrick, the General Manager for Channel Sales at Microsoft. And they are heavily, heavily channel.

Ian:        They are.

Louis:    They always have been.

Ian:        But look at the margins and the conversations that have come out, though. When they shifted to cloud, and I’d say they’ve done an incredible job of that. They’ve done one of the best jobs I’ve seen of shifting their whole business across. But it was hard and they invested and they focused on it and they committed to it. But they from the start put lower margins on their products that were in the cloud and lower margins on the annuity stream for the channel, and there was a lot of complaints about it right. And that was very public.

So number one is they changed some stuff of how they do it. I would argue that some of their channel partners are different than they were. My thought though, and I’m open and I’m going to put a bold statement out there. I’m watching for the day that Microsoft starts billing directly and starts offering customers — and there’s been mutations of that recently that they might, but you know — I’m watching for when are we going to see a company like Microsoft offer up customers can now renew directly. Because once you’re on the cloud, it’s very easy to renew a transaction through a portal. You’re on it, you’re using it. What’s the ongoing value that I’m getting for paying a margin to the channel? Remember I’m a channel person, right? I get it, but that question’s there and it’s in a lot of vendors and I’ve sat in Chatham House Rules and a lot of major discussion rooms with a lot of big brand vendors where they’re discussing that. Maybe it’s not happening now, but it’s in their agenda of Should we? What would happen? What would the impact be? Because straight away, pick a number, but the margin they’re giving their channel would come straight into their revenue stream, overnight growth of a big number. But it’s a risky strategy if you still need the channel. But don’t negate that those conversations are going on. Channels need to continue to demonstrate the value they are giving to the channel above them. Because those conversations are going on, I’ve been in the rooms and listened to the vendorss conversations.

Louis:    Yeh. Well I’m sure they are. It’s going to be as always an interesting dynamic fluid time in technology, and it always has been always will be. Some of the other people on the podcast are a hundred percent channel companies and for them, pretty much everybody I’ve talked to has said that the channel has better margins and is more cost-effective for them than direct sales has been.

Ian:        Okay good, good.

Louis:    And they also may find it especially useful for companies that are primarily focused on SMB, because there’s so many companies out there.

Ian:        Yeh. I agree.

Louis:    Only the largest companies could really try to sell directly to that kind of market. But we will see.

Ian:        We will.

Louis:    So Ian, how can people contact you?

Ian:        Sure. Louis, thank you for that. Yeah, sure. So two easy routes. If you go to ianmoyse.co.uk or IanMoyse.cloud they will take you to my two key social accounts where you can reach me.

Louis:    Oh, okay. I’ll put those into the show notes at revenueassociates.biz. So thank you for joining us today Ian.

Ian:        Thank you, pleasure.

Louis:    I will be sending you a copy of my Bullseye Marketing book as I do all guests in appreciation.

Ian:        Thank you, thank you.

Louis:    If you’re listening to this on Apple Podcasts, Google, Spotify, or another app, and you found the podcast interesting and useful, please leave a review. That will help other people learn about the podcast, too. Thank you for listening to the Software Channel Partner Podcast, and please subscribe and listen to future episodes.