From The Editor | April 1, 2019

Why Aren't Software Companies Embracing The Channel?

By Abby Sorensen, Chief Editor

Viewpoint

The truth is, I know very little about how to fix a golf swing. Yes, I’ve been coaching college golf for seven years. No, I cannot cure your slice. But what I can do is explain the college recruiting process backwards and forwards. I don’t sell golf lessons, but I do sell the value of a rather expensive liberal arts college in northwest Pennsylvania.

And when it comes to “selling,” our coaching staff can’t do it alone. Hours spent combing through recruiting websites? Check. Hitting the road to watch tournaments in the summer? Check. Emails to high school coaches? Check. Asking current golfers and alumni to recommend recruits? Check. Our college recruiting sales channels, so to speak, are endless. There’s no possible way we could directly contact every single high school golfer who could excel in our program — just as there’s no possible way your direct sales team can contact every single prospect who is a fit for your software.

If I’m willing to go to such lengths to convince an 18-year-old to incur what typically amounts to a good chunk of student loan debt to play golf for someone who doesn’t really know much about the golf swing, then why do you resist putting your software in the hands of anyone except inside sales reps? Yes, you. You, the software CEO who doesn’t want to sacrifice margin or “water down your brand” with resellers. You, the VP of sales who doesn’t want the hassle of deciding how to comp both your reps and your resellers. You, the execs at software companies who are still convinced your internal direct sales team has it covered.

Consider this:

  • Seventy-five percent of all the world’s trade goes indirectly.
  • There are 162,000 IT channel firms in North America.
  • The average midsize company has 50 people influencing tech decisions at the line-of-business level.

This is according to Jay McBain, principal analyst, channel partnerships & alliances at Forrester Research, via a recent episode “Channel Voice” podcast (adeptly hosted by Software Executive’s executive editor Matt Pillar).

The channel isn’t going away, and software isn’t getting easier or cheaper to sell. So, why do software companies struggle to capitalize on the selling power of channel partners? On page 34, Dina Moskowitz, CEO and founder, and Ted Finch, CMO of channel consulting — both of SaaSMAX — spell out why the C-suite and the partner enablement teams are disconnected within so many companies. Building a successful channel machine requires consistent effort and a long-term investment, not a onetime injection of resources or hiring a channel VP who you expect to magically find partners.

I promise if you listen to what McBain, Finch, and Moskowitz have to say, you’ll come away invigorated about the opportunities that await in the reseller channel. This is why we have a section in every issue of Software Executive called “Channel Strategies.” It’s why we have channel experts on our editorial advisory board. And it’s why we’re co-hosting four ISV Connect Summits in 2019 to provide live channel education along with an opportunity for software companies to network with resellers (those events will be May 9 in Toronto, June 5 in Chicago, July 18 in Cincinnati, and we’ll be announcing a November date for Los Angeles soon). Like it or not, you — yes, you — might need to take a closer look at different sales channels.

P.S.: If you’re still a channel naysayer, you’ll find comfort in Jeff Gilbert’s guest article on page 12. The former CEO of Software Engineering Professionals (SEP) has been in business 30+ years without a channel program — or without any sales reps, for that matter. SEP’s engineers write the code and sell it. It’s a unique example of why I don’t claim channel programs are right for every software company, just as I won’t claim to know how to fix your slice.