Canalys Forums 2022: The rise of channel ecosystems

Canalys Forums 2022: The rise of channel ecosystems

Canalys analysts give their views on hot topics for the Canalys Forums 2022 in this series of interviews. We look at the role of the channel ecosystem in creating exponential opportunities for vendors and partners.


The 'decade of the ecosystem' is here as the pressure on channel leaders intensifies to deliver results at a new level of scale, complexity and personalization. We talk to Canalys Chief Analyst, Jay McBain as part of our series of Canalys Expert Interviews to understand some of the issues we'll discuss at the Canalys Forums to help vendors understand how they should drive competitive advantage and growth over the next few years. 

What is the most important issue for the channel in North America in 2022?

We are witnessing a once-in-a-generation shift in the global economy, and partnerships play a leading role. Most business leaders across every industry, of all size firms, and in every corner of the world are considering significant business model shifts. They are realizing that they can't do it alone in the decade of the ecosystem.

To understand what makes a partner ecosystem different than a traditional channel is to analyze the changes in people, organizations, processes, programs, partners and underlying technology that are fueling the decade of the ecosystem.

Your research centers on the channel ecosystem - how is that evolving and what's new?

For over 40 years, channel programs and the underlying technologies have been designed to drive the sales motion. Providing resellers, MSPs, distributors, retailers, dealers and agents with a frictionless way to market and sell products at scale was the goal of every channel leader. This led to a bell-curve scenario where you could be underpaying partners who are fully invested in the marketing, selling and engineering assistance to land a deal, to then overpay partners who showed up late and collected the order.

Recognizing the partner point of value takes a new set of skills, organizational structure, processes, programs and underlying technology to accomplish.

For example, the average customer prospect will move through many moments before making a vendor selection in a considered purchase. In a post-cookie world, vendors will need to identify and attribute (and hopefully share real-time data with) a partner who has driven that moment. Whether it be a well-placed eBook, an event, a social media engagement, some expert consulting, design, or architecture work, it doesn’t matter. Partnerships will be needed to replace elements of MarTech and AdTech that were used for this purpose in the past.

What will the channel most want to hear about from vendors at the upcoming Channels Forums?

When looking at the people and organizational elements of new channel models, we have seen the largest technology companies make significant changes. Last year, Microsoft replaced its top channel executive with an ecosystem leader. AWS, Google, IBM and others have followed in the last few quarters. Even smaller vendors such as Sage have followed suit. In fact, over 12,000 people on LinkedIn now have ecosystems in their titles (growing by 2,000 each quarter) and over 697,000 people use the term ecosystems in the description of what they do.

Channel organizations (across all industries) have been somewhat siloed over the past 40 years, including having their own built-in channel marketing, sales, operations and finance groups. In fact, the Harvard Business Review concluded that successful channel chiefs have skills more in common with a CEO or general manager than a line of business leader like the head of sales or marketing.

These new ecosystem chiefs are looking to run technology alliances, strategic alliances, business alliances, influence channels, transaction and transaction-assist channels, and retention channels in parallel. Instead of building an empire of people siloed from the rest of the company under these six partner models/motions, they are embedding partner professionals in marketing, sales, customer success, product and strategy groups. This “dotted-line” approach to channel leadership looks more akin to data science (embedded in every department and indirectly reporting to a central CTO) than it does to previous incarnations of indirect sales departments.

What trends will SPARK new customer spending in 2023?

We are now firmly in the subscription era. Driven by changing customer (consumer) behaviors, software (cloud) eating the world, and then accelerated by the pandemic, most technology vendors have either fully committed or made significant strides to transform their business models.

Subscription and consumption business models are an effective hedge against the current macroeconomic uncertainties we are experiencing. The models look to create a stable base of recurring customers and generate predictable revenue streams that vendors can plan for (and enrich) into the future. Benefits include exponential growth potential on new subscribers, greater than 100% retention of current revenue, and more efficient and manageable growth.

Without the need to hit the reset button each quarter, vendors and partners can benefit from increased business agility. The new and never-ending customer journey can logically be divided into three steps – getting the customer to the dance (vendor selection), getting them up on the dance floor (initial purchase), and keeping them dancing all night long (retention and enrichment).

Large vendors are pushing all their chips in on subscription and consumption models.

What are you looking forward to from the hybrid Canalys Forums?

I am so excited to join Canalys Forums - the world's leading events with a distinct focus on channels, partnerships, alliances, and ecosystems. Backed by Canalys, the 24-year-old market analysis firm that strives to guide clients on the technology industry's future and to think beyond the business models of the past - delivering smart, timely, and actionable market insights to IT, channel and service provider professionals.

Expert Hub discussions will take place physically and virtually at the Canalys Forums 2022. They are panels for the channel to discuss the channel and to help advise vendors on what’s real and what’s not. Attendees can watch, comment and ask questions.

Partners and vendors wanting to secure places at the Canalys Forums should register their interest or contact their Canalys account manager now.