Shulou(Shulou.com)11/24 Report--

CTOnews.com, November 23, Canalys reported that manufacturers continue to introduce a variety of incentives to meet the changing needs of subscription services and services, but these new initiatives are not intended to replace existing methods, but to improve and complement them. Influence and recommendation are becoming more and more important, but it is not easy for manufacturers to reward influence financially. Therefore, manufacturers must also introduce new ways of reward.

As manufacturers all over the world are looking for more sales channels to enter the market, it is necessary for hardware and software manufacturers to develop a unified partner program model, which has become standard in the industry. In order to meet the needs of the new generation of partners, manufacturers are constantly improving the way they cooperate with them. This relationship is no longer limited to transactional sales, but provides a variety of opportunities to add value throughout the customer life cycle. At the same time, they will also adopt new market approaches and collaboration models, such as the cloud market, digital and e-commerce platforms, agents, ISV, MSP, and cloud and SaaS distributors. As manufacturers focus more and more on services and solutions, they also begin to rethink the value orientation of partner capabilities and professionalism, hoping to better reflect partner capabilities.

Because partners play an important role in driving activation, adoption, use, and renewal, when thinking about subscription-based incentives, most vendors begin to redesign incentive models to reward partners other than the completion of initial sales. These include a variety of non-transactional activities, such as intermediary meetings, technical assessments, customer seminars, and even transactions that have been completed by vendors but performed by other partners. Many vendors have begun to design incentives for customer lifecycle journeys, including Cisco, Microsoft, and VMware, attracting many imitators. With the continuous evolution of landing-adoption-expansion-renewal incentives, Canalys has also begun to conduct in-depth research on the dynamics in today's market.

In addition to the agent rebate method, there are other incentives in the market for subscription services and value-added services:

Recommendation fees and promotion fees, such as recommendation leads, referral meetings, participation in pre-sales activities, etc.

Technical assessments and customer seminars, such as VMware and Microsoft.

Lifecycle incentives for activities such as attraction, growth, and expansion, such as Cisco and Schneider Electric.

Deployment and consumption incentives, such as VMware, are motivating partners to drive deployment, cloud activation, and consumption because it brings their partner programs closer to the customer lifecycle.

Influencer incentives to reward services with no actual transactions between manufacturers and partners, such as professional consulting. These methods may pose challenges to manufacturers' operations, including the specific characteristics of influence, validation of activities, and customer acceptance. If partners want to apply for these awards, they usually need to submit proof of their activities to the manufacturer.

Cloud migration and acceleration funds are incentives that most infrastructure vendors have not paid enough attention to at present. In contrast, cloud vendors are more likely to use such money to heavily subsidize customers' adoption of their cloud facilities for the first time, regardless of whether they move from a local cloud or a competitor's cloud, CTOnews.com has learned. By contrast, infrastructure vendors have fewer new initiatives in terms of service incentives, so their attractiveness to partners is declining.

The joint sales mode of most manufacturers is still not perfect.

In fact, due to the increasing importance of services, SaaS, and subscriptions, co-selling will be another advantage. The so-called efficient joint sales is to motivate the manufacturer's own sales team to sell partners' solutions or services, or to encourage other partners to do so to strengthen pre-sales activities. However, many manufacturers do not pay enough attention to it, in part because it involves a complex process and the need to change sales behavior. In the existing joint sales methods, whether between manufacturers or between manufacturers and partners, it is usually relatively simple, accurate and easy to grasp. P2P joint sales incentives help to keep customers in the manufacturer's own channel ecosystem, while expanding the customer range of partners. The specific situation needs to be determined according to the nature of joint sales.

Examples of joint sales incentives currently available include:

VMware's P2P incentive method matches the agent's customers with top service partners.

Cisco offers MDF (Market Development Fund) as an incentive for co-sales to developers and consulting partners.

Microsoft Cloud solution providers (CSP) receive a 10% rebate if they successfully sell ISV solutions. Microsoft's own sales team will also receive a 10% bonus if they sell a partner's solution.

Subscription incentives are an effective supplement to existing partner incentives

Because manufacturers must consider the role of partners, their professional level or commitment to manufacturers, these partner incentives for subscriptions and services are often difficult to implement. For manufacturers, to improve trust and reputation, there are other important factors to consider, such as channel-centric, business convenience, service availability, customer leads and pricing guarantee. The delivery of subscriptions and services requires an ecosystem of mechanisms and channel partners. Manufacturers are making every effort to develop partner compensation plans, but they are intended to complement rather than replace existing measures. Partners will have more incentive options after achieving sales in the future. Incentives are not the only factor, but important, for partners to change their subscription and service behavior.

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