How to Survive a Recession and Thrive with Partnerships – with Jay McBain, Chief Analyst of Canalys
Channel guru Jay McBain shares industry insights on how to succeed during tough times and the role marketplaces will play in transforming the channel.
In this Partner Insights video interview the host Roman Kirsanov interviews Jay McBain, Chief Analyst of Canalys.
Jay begins by stating we’re going through a once in a generation change in partnerships.
The last 40 years have defined partnerships around the point of sale, and now we are experiencing a tectonic shift to ecosystems that enable a subscription consumption model, where every 30 days after the sale are just as critical, in the implementations, the integrations, the habit forming ‘stickiness’. Jay identifies three main swim lanes where partners are key: Attracting, winning and retaining customers.
These ecosystems are implemented through technology alliances, spanning across multiple industries not just tech and integrate new services into traditional products for competitive advantage. For example 79% of people won’t buy a car unless it has Apple CarPlay.
There are a staggering 800,000 emerging technology alliances, spanning IoT, AI, Blockchain, Quantum Computing, Metaverse, self-driving cars and drones, forming the modern partner framework.
At 3m:05s Roman asks how organizations should adapt their channel strategy in response to the current challenging climate.
Jay responds by highlighting that the tech industry has led the economy out of the last two major recessions, and 51% of partners are investing more in marketing during the downturn to come out of the recession stronger, as this is a great time of developing a competitive advantage.
Also rather than standalone channel ’empires’ organizations are transforming to embed channel functions across the organization, with Jay emphasizing the number one strategic driver is an API-led product strategy so that integration with partners can be maximized.
With this in mind Jay explains there is a key requirement to invest in developing a channel – It represents a double cost to begin with as new partners must be hand held through the capacity building stage but once this is achieved cost of sale tends towards zero as they become self-sufficient.
At 20m:25s Roman asks Jay about marketplaces and how these will impact channel strategy, recounting a conversation with an AWS executive who believes that while they will grow significantly due to the volume of new software there will still be a requirement for more direct partnerships.
Jay comments that they are reporting an expected 86% compounded growth in marketplaces, highlighting that this a component part of a continuing overall growth of the tech sector, which will leap from $4.3 trillion to $8.6 trillion in this decade. So while marketplaces will grow massively, accounting for up to 1/3 of this, it won’t be at the expense of other channels where there will still be demand for direct and distributor models.
What Jay does stress is to clearly recognize the role they will play in fulfilling key demand segments, where customers want to buy through marketplaces and being integrated into them in a frictionless manner is critical to staying competitive.