Experts from BeyondTrust, a global leader in intelligent identity and access security, present their predictions for the channel in 2024.
2023 was a year of opportunities and complexities for channels. New (and not-so-new) technologies continued to create opportunities around Digital Transformation, while global economic uncertainty brought with it the threat of recession, rising interest rates and high inflation.
While these trends and market shifts impacted sales activity around the world, the emphasis continued on the channel in 2023, with more companies investing in a broader partner ecosystem mindset.
But where does the channel stand heading into 2024? In the world of cybersecurity, it’s stronger than ever. Analytics firm Canalys estimates that the channel accounts for 91% of cybersecurity spending. The Canalys report shows that while direct cybersecurity sales remained stable in the first half of 2023, channel sales grew by more than 12%.
With this in mind, experts from BeyondTrust, a global leader in intelligent identity and access security, present the new predictions for the channel in 2024:
Partner success plays a role in customer success
Suppliers are beginning to realize that partner success is a dominant factor in customer success. This is highlighted in a new report from ASAP (Association of Strategic Alliance Professionals), titled Partners are the Customer Experience.
Customer Success departments began popping up in the early 2000s. Customer Success teams gained momentum with the adoption of Software-as-a-Service (SaaS), driving the need for a greater focus on
customer retention. Salesforce was one of the first companies to build an extensive customer success department. This was followed by the emergence of customer success platforms.
Now, customers depend on partners for the information and advice they need to make a purchase decision. They also rely heavily on partners for product implementation, integration and adoption.
By 2024, there will be more partner success teams working alongside customer success teams. Net promote scores will be expanded to measure customer perception of both the supplier and partners.
As a result of this shift, there is a need for greater inclusion of partner success in customer success platforms.
SaaS business metrics replace channel metrics to measure partner ROI
In 2024, companies will need to improve their channel metrics to get a more accurate view of the channel’s impact on the business.
As vendors transition from channel strategies to partner ecosystems, they face a challenge: how do you measure impact and justify investment in the ecosystem? Traditional channel metrics don’t recognize the expansive value and contribution of all the different types of partners.
You can measure things like partner influence, competition and service quality, but even those metrics don’t tell the story of the overall impact on the business.
Companies will need to analyze the impact of their partner ecosystem on broader SaaS growth metrics, such as customer lifetime value (CLTV), customer acquisition costs (CAC) and net recurring revenue (NRR).
Artificial Intelligence accelerates the growth of partner ecosystems
All the hype and fear about Generative Artificial Intelligence is starting to die down as we figure out what this technology can and can’t do. Generative Artificial Intelligence will begin to accelerate the growth of partner ecosystems in a number of ways in 2024, driven largely by partner technology providers that are incorporating Artificial Intelligence technology into their products and platforms.
Currently, partners are leveraged to achieve expansion in foreign countries; however, the cost and time required to localize content can be a limiting factor. Partner enablement and training platforms will offer tremendous advantages by using Artificial Intelligence to generate sales, marketing and learning content in multiple languages.
We’re already starting to see complete self-service partner enablement and partner management platforms adding Artificial Intelligence to extend their capabilities. This allows partners to receive contextualized information for their specific needs, including Artificial Intelligence-generated value propositions. Joint value propositions with potential partners will be tested before a partnership agreement is even signed.
Looking beyond: One more prediction for the next five years
Collaboration goes from being a department to a business strategy
The emergence of the orchestrated partner ecosystem is expanding partner value across all departments of the organization. Channel Managers are seeing this added value and are educating their cross-functional colleagues on the impact the ecosystem can have on more effective marketing, sales, product development and service delivery.
Classic entry and exit strategies are becoming less and less effective. This is leading to a ‘nearbound’ strategy, which recognizes that customers are surrounded by their trusted advisors. Smart organizations are driving a better partner experience to make sure those trusted advisors are positive and educated advocates for their offerings.
Over the next three to five years, this trend will become much more widespread as organizations see the impact of the ecosystem in driving further business growth, EBITDA (earnings before interest, taxes, depreciation and amortization), and company valuation.
SaaS providers are recognizing the broader power of the ecosystem, leading some to elevate the role of the Head of Channel to senior management (C-Suite). More and more Director of Partner titles are already being seen on LinkedIn. As equal members of your Executive Leadership Team, they are well-positioned to drive alignment in partnership as a business strategy and help their colleagues embed collaboration across departments.