My name is Terry Petrzelka, the founder and past CEO of Tectura Corporation. I grew Tectura from humble beginnings in 2001 to become the world’s largest Microsoft Dynamics VAR in 2010 when I retired from Tectura. Today, still being driven daily by a passion to assist partners who are in the Channel Partner business model, I am fortunate to be working with hand-picked channel partner business owners as well as industry leading ERP Publishers to put in place initiatives that stimulate continued growth and create business opportunities for channel partners.
With this as a back drop, I contend that changes in the relationship between the publisher and the channel partner will be the number one issue for channel partners to contend with over the next 18-24 months. Why? Publishers will be requiring a technically capable, business agile business partner that must provide them a means to gain market share. This means the channel partner of today/tomorrow will be required to demonstrate and perform at new levels with advanced technology skills to remain relevant in the channel partner business model. This means significant investment by channel partners to meet the demands of the publishers today and tomorrow. In simple words, market forces, new technologies, and the technical acceleration of all publishers ERP platforms over the next 12-18 months will have a profound effect in the partnership model between the publisher and the channel partner.
Of the publishers, Microsoft’s significant advancement over the past 12 months in their corporate wide initiative of cloud first will continue to be a major challenge for partners to remain relevant in the channel partner model. Below are my top three immediate challenges/threats to the channel partner business model and its continued existence over the next 18-36 months:
- Customer demand for Cloud, Mobile, and Business Intelligence Solutions from their ERP Partner. The Publisher will demand that VARs offer these solutions to win new business and keep existing customers. To remain relevant to a Publisher, a VAR to be successful and remain profitable will be required to modify its ‘new business capture’ model and ‘business fulfillment’ model. This will require each channel partner owner to make significant investments in time, training, and resources.
- Lower Cost Competition in the Cloud. Channel Partners are experiencing rapid growth in new VC-funded competitors. New large platform players like NetSuite, Work Day, Intacct, Acumatica, and host of smaller players focused on specific markets are now relevant and must be dealt with. The world of recurring revenue is upon us—growth of new clients, retaining of existing clients that drives recurring revenue is the world we live in today. For the next 12-24 months, these new ultra-competitive publishers will continue to place profitability behind the importance of garnering market share and new customer logos.
- Microsoft’s Reduced Support for Small ERP VARs Focused on traditional GP, SL, and NAV. As you probably know, Dynamics is no longer an independent division in Microsoft and is instead part of the Cloud and Enterprise Group. All indicators point to the fact that the Azure Cloud Business is the highest priority for the organization. Amazing announcements have been released over the past 6-9 months where Microsoft has signed strategic alliances with Dynamics competitors NetSuite, Salesforce, etc. to get them to adopt Azure and drop competing cloud platforms to host their cloud services.
Ongoing software pricing promotions for GP and NAV on Azure have all but eliminated any profit opportunity. Operational support teams along with field sales and technical resources for these product lines have been reduced. An example being that only managed partners in large deals (over $15,000 in Microsoft revenue) can get Microsoft field support.
As a strategic business advisor to a select few Microsoft Dynamics Partners, SBS Group is one of my clients. SBS Group is one of the authorized partners globally that provides a business opportunity for Dynamics partners of any size to accelerate its business growth and success via the authorized Microsoft Master VAR Program. Since being selected by Microsoft as one of their Master VARs, nearly 100 VARs have affiliated themselves with SBS Group via their Partner Network to meet the above challenges, but most importantly to position themselves for future growth and profitability. How is this possible?
- Members of the Partner Network can offer the full complement of Microsoft Dynamics, Cloud, and Platform solutions, along with 100s of ISV products, with no investment in training or certification—enabling them to drive more revenue from their existing clients and compete more effectively for new customers.
- Partners with unique functional or vertical solutions can leverage network resources to effectively sell and deliver their solutions across North America with no increase in overheads.
- All partners, by joining, receive advisory services in the areas of strategic planning, marketing, and operational support and services besides the benefit of working in closer relationship with Microsoft as the partner can leverage SBS Group. This comes on day one where the channel partner can immediately brand itself as a member of Microsoft Dynamic’s Inner Circle Member and one of the world’s largest Dynamics VARs.
Bottom line, joining the SBS Partner Network allows you to transform your business into a more effective, competitive, and profitable organization with no investment—while you get to maintain full ownership and autonomy.
I am offering a complimentary half-hour consulting session to hear about your challenges and share some of my insights learned from talking to and working with scores of partners. Click here to learn more or contact us to set up a call. You’ve got nothing to lose and everything to gain.