THE CHANNEL FACTOR
When It Comes To AI, Don’t Forget The Channel By Jennifer Follett
I IT’S NO SECRET THAT whenever there is a massive technology shift, vendors will move as quickly as possible to capture the opportunity. That is certainly the case with AI, which has seemingly had the IT market in a tizzy since the intro- duction last fall of Microsoft-backed ChatGPT. That launch helped catapult AI—generative AI in particular—into the lexicon of conversations taking place from living rooms to boardrooms across the globe. All the cool kids are doing it. It’s a market ripe with promise, with the potential to become an inflection point that delivers a massive opportunity sized
Whenever there is a big technology turning point like AI, shortsighted ven- dors have a tendency to try to bring those offerings to market direct to cus- tomers. They take this path because they discount the ability of solution providers to sell, support and service a disruptive technology.
Then there are the vendors that rec- ognize the value of teaming with the channel but try to do it with just a microcosm of their partner base, often a handful of their largest partners.These vendors underestimate the importance of driving share growth as a first-mover. Inevitably, vendors learn the undeniable channel truth that customers rely on their trusted solution provider advisers to
somewhere in the trillions of dollars by 2030, depending on which research report you read.
help them navigate any big new tech- nology shift. As we saw with cloud computing, a technology disruption as big as AI brings the mandate that there is simply no way to scale a busi- ness without the support of a strong channel partner network. In the Artificial Intelligence Special Section of this issue, we spotlight some of the solution providers that are
Whenever there is a big technology turning point like AI, shortsighted vendors try to bring those offerings to market direct to customers.
ServiceNow CEO Bill McDermott, for example, believes GenAI could boost global gross domestic product by nearly $7 trillion. “Our platform experts who have worked with the greatest brands in technology believe this moment is as transformative—if not even more so—than the internet or even the iPhone,” he told financial analysts in July. The challenge in the rush to capitalize on such a big opportu- nity is that vendors moving quickly to bring products and services to market often give short shrift to actually building the channel necessary to propel those offerings into the marketplace. We saw it with cloud computing when vendors raced to stuff the word “cloud” into every press release they could before their offerings—never mind their go-to-market plans—were fully developed. And we’re seeing it today with AI. Even some of the most respected channel companies right now are falling into that trap. There is a large swath of GenAI products and technologies being brought to market with no channel plan to back them up.That means little to no investment in strategic elements such as channel training, sales compensa- tion and incentives. CEOs of several CRN Solution Provider 500 companies are already experiencing cases of channel conflict where they have brought an AI opportunity to a trusted vendor only to see it try to do a direct sales end-around to win the deal on its own.
already positioning themselves forAI success, such asAvanade, No. 33 on the CRN 2023 Solution Provider 500, which has rolled out a GenAI solution for an oil and gas customer to diag- nose and repair problems with refinery pipelines, potentially saving not only time but lives. Avanade and many other solution providers like it are primed to jump onAI opportunities, bringing their own brand of know- how and deep customer knowledge to bear. Recruiting these types of partners to seize such a big mar- ket is no small matter. It requires a channel investment and a sustained commitment to partners both new and old. A wave of fresh partners will inevitably join the fray even as legacy partners turn on a dime to capture the opportunity. There are lots of channel lessons we have seen here at CRN during our coverage over much of the last half-century of these big technology shifts. It would be wise for vendors to remember that those who forget the past are doomed to repeat it. n BACKTALK: Are you seeing trusted vendors making AI channel missteps? Let me know at jfollett@thechannelcompany.com.
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OCTOBER 2023
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