Frank Basinski, director partner programmes and enablement, EMEA, Red Hat, explains why the channel must focus on becoming adept in specific verticals.
Increased vertical focus has been happening for a while at the channel’s cutting edge, and IDC believes that 2017 is the year it becomes mainstream. The analyst house predicts that by 2018 at least 20 percent of partners will have restructured to create vertically focused customer-facing sales and solutions organisations. However, is it as black and white as this, and what are the main obstacles partners are facing in creating the crossover between industry and technology?
Thanks to the rise in third-platform technology and a dramatically shifting customer landscape, partners are focusing more and more on their vertical offerings and expertise. New research commissioned by Red Hat underlines this, with over half of the resellers, VARs, SIs, MSPs, CSPs, ISVs and consultants surveyed in the UK, French and German channels having extended their product and service portfolio towards specific vertical industries in the past 12 months.
The key driver for partners, is that customers are increasingly looking for guidance and solutions from the channel to help facilitate their digital transformation and to achieve a holistic, cross-sector business approach.
These new demands are spelling out a clear message for partners and it is this: like those who sat on the sidelines with digital transformation, those not investing in vertical specialisms will soon find themselves missing out on valuable business opportunities, plus risk exposing their lack of cross-sector services to existing clients. Vendors similarly will prioritise collaboration with vertically driven partners in order to increase profitability and expand their own portfolio; with partner programs and certifications weighted heavily towards nurturing this level of industry depth.
So, what can they do to not only weather this, but increase business prosperity and opportunity?
Know the industry lingo
The challenges associated with creating vertical specialisms very much depend on the starting point of the partner. System Integrators are already ahead of the playing field, whilst others are at varying points in the journey. That being said, most partners have figured out that if they specialise in vertical (or horizontal) solutions they will have a significant advantage, and avoid a business model only set up to compete on price. A vertical approach allows partners to be more relevant and form stronger relationships with their customers. peaking the language of the customer shows a deeper understanding tailored to the market their end customers are operating in. Partners immediately step up from being an infrastructure provider to becoming a trusted advisor – a key differentiator at a time when competition is only intensifying.
Primarily, we are seeing this trend play out across our partners’ sales infrastructure. This allows partners to build a valuable proposition and unique IP, differentiating themselves from the competition. However, it is important for partners to concentrate on providing a solution focused approach rather than a product one.
Devoteam, one of our Premier Business Partner is a great example of how and why partners benefit from an industry-centric approach. For one of the largest financial services organisations in the UK to achieve its digital transformation, Devoteam had to first understand its main business stakes. This meant becoming experts on disintermediation, new regulations, end customers new uses and omnichannel strategy. Only by taking this approach with all its clients is Devoteam able to consistently provide services and technology that fit to their clients’ business and industry challenges.
Leverage third platform technologies
In its report, IDC also predicts that harmonious to the adoption of vertical specialisms in the channel will be the increased investment in third platform technology, with new ecosystems and alliances emerging around cloud, social, mobile and Big Data.
Take advantage of repeatable solutions
To invest in their industry expertise, while carving out a USP against their competitors, repeatable solutions are just one potential strategy partners can look at.
Repeatable solutions mean identifying an industry specific issue, building out a solution to tackle this and recognising that this solution can offer the same value proposition for other customers in that space and can be replicated quickly, efficiently and cost-effectively. We have seen some of our partners utilise this strategy to great effect.
The fact is that vertical specialisation is happening naturally and digital transformation will only intensify this. We continue to encourage all our partners to invest in building up their industry expertise or to take a close look at what might already exist within their organisation’s and bundle this up into a vertical offering. Ultimately, following a vertical specific approach, supported with tailored expertise and solutions, will ensure that partners fully understand the challenges end-users come up against on a regular basis, which can be the key to unlocking new business opportunities and keeping existing clients satisfied.