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COVID-19 and the Partner Landscape – A Q&A with IDC

The global pandemic has profoundly changed the way partners go to market and engage with customers.

To help make sense of it all, our EMEA channel team recently hosted F5 Unity+ partners for an exclusive IDC talk on the challenges and opportunities ahead.

After the event, we caught up with Margaret Adam (AVP European Tech Ecosystems, Services, SMB/Start-up, and Partnering Ecosystems) and Stuart Wilson (European Research Director, Partnering Ecosystems) to share their insights with our wider community.

IDC's Margaret Adam and Stuart Wilson

How has COVID-19 affected the partner landscape?

Margaret Adam: The core message is that we’re not seeing the wholesale cancellation of projects or immediate, inflexible budget cuts.

However, we are seeing a re-prioritization of projects. 63% of European organizations have told us they are looking to adjust their technology roadmaps to respond to the pandemic.

Today, when we engage with the market, we are exploring how we can use technology to flatten the curve to recovery. How can it mitigate the impact of a potentially recessionary environment? How can it accelerate growth as we navigate the challenges of the present and head towards the “next normal”?

As a result, we have seen a degree of resiliency in terms of IT spend, compared to the actual impact organizations are facing from a revenue perspective.

According to recent EMEA IT Buyer Sentiment Surveys, 94% of organizations say they expect major changes due to the pandemic. 32% expect more work from home. In addition, 30% say they will move to the cloud more aggressively, 29% will increase spend on DR and back-up, and 26% say they need to integrate more mobile devices to accommodate remote work surges. 26% also plan to make changes to their IT security or system.

When it comes to security, 69% of European organizations expect to sustain or increase IT security spend in 2020. 33% will spend more than expected, whereas 36% will maintain similar levels. It is also a top priority in the Middle East and Africa (MEA).

On the cloud front, the initial customer priorities were crisis management, business continuity and security. However, and most encouraging for me, is how 55% of surveyed customers are now looking to the cloud as a platform for innovation.

What will determine how partners cope with the pandemic and thrive in, and beyond, the recovery phase?

Stuart Wilson: There are four key attributes that will determine future success for partners.

The first one is resource agility. Many have relied on implementation and onsite support. They have had to quickly switch gears for how they use their internal resources effectively.

As a result, we’re seeing partners moving into areas like customer success functions and even offering short advisory services like Ask an Expert sessions and training. In other words, they are rethinking how to engage with customers. Many are also exploring how they can make applications and build up their own intellectual property (IP).

The second attribute is financial resiliency. This is a bit more complex as every partner is different. Here, we’re talking about cash reserves, the health of the balance sheet and how exposed they are to different sectors and verticals. More important is the role of recurring revenues. The impact of the pandemic was less severe for those with recurring revenue streams.

The third factor is business empathy. Partners that can engage with their customers in a purposeful way and understand their pain points are really starting to stand out from the crowd.

Finally, there’s portfolio pivotability. How can partners spin up new services that are directly aligned to what customers need right now? All these response tactics are interlinked. All are important.

In the initial stages of the pandemic we saw a shift to “serve” over “sell”. What does that mean in practice?

Stuart Wilson: We urge partners to think of these “serve over sell” activities as an investment in the future of the customer relationship. It is vital to understand where each customer is on their recovery journey.

More than ever, customer success is the holy grail for partners. This is all about building deeper, more committed relationships. 

As both customer and partners evolve to embrace more as-a-service and subscription-based models, we’re entering an era of continuous engagement. How partners approach this will determine their future success. For example, data-driven decision-making will become much more important. In our recent survey, we found that more than half of partners are using data and analytics to predict customer churn. The focus on customer success has now become a necessity not a luxury.

It is also crucial to realize that some customers are still in the recovery phase—especially those in the most heavily impacted verticals. Partners need to understand that the journey through recovery is not a uniform one.

How have perceptions of ROI changed?

Stuart Wilson: Customers are becoming more tactical and scrutinizing cost. The focus is on technologies that will either help manage the crisis or generate clear financial benefits. This means even more emphasis on ROI.

Generally, most customers are looking to continue projects, reduce costs and improve operational efficiency. For partners that are working with customers in this phase, it is vitally important that they can clearly articulate what the return on investment, and impact on the business, will be.

There are two key questions customers are asking partners here: is there a short ROI, and will this reduce our costs and create operational efficiencies in the business? Partners need to make sure they have the tools, resources, sales materials, and the sales techniques to answer “yes” to both of those questions.

What are the big opportunities ahead for partners?

Stuart Wilson: The big one is recession-beating IT. This means being highly flexible in terms of contract terms, financing, contract duration and having flexible scalability built into the solution. To create these flexible offerings, partners must move fast—and they need support from vendors.

As we return to a “growth phase”, expect partners to be far more consultative and transformation focused. Customers want proactive ideas and digital transformation has become a necessity.

Partners also need do what they can to invest in future success. Areas such as cloud, digital transformation and security are key in this respect. These are all high growth areas that will become a battleground in terms of recruitment. Some partners are ahead of the curve. Others are playing catchup. For many, they’ve reached a tipping point where their investment in transformation can no longer be put off.

What is the “next normal” and what does it mean for partners?

Margaret Adam: COVID-19 is an acceleration of the partner landscape. A shakeup that may have taken a few years is now clearly happening much faster.

As a case in point, 61% of partners are saying that COVID-19 is a driver of digital transformation. 46% also claim that the pandemic has accelerated their transformation efforts.

From a technology perspective, customers will increasingly look for partners that can help them develop their own digital products and services. The emphasis is shifting from specialization to innovation and creation. This is such a priority for businesses that some key decisions go all the way up to the c-suite. We’re all moving into a more complex ecosystem.

Overall, relationships will become more cooperative. Once a company has digitally transformed, they will want to work in a more iterative manner. The projects are going to get a lot smaller and built around specific use-cases. To be successful in this era, partners need to be in absolute lockstep with their customers’ continuous transformation efforts. That means even more focus on customer experience.

What should partners be prioritising now?

Stuart Wilson: Our advice to partners is to really look at your business, services, solutions, and capabilities through the lens of remote access and digital. What can you digitize? What can be remotely enabled? How can customers consume your services, talents, and skills in a remote fashion?

Secondly, invest in customer experience. Look at how your resources are structured around presales, sales and marketing, and services. Use this opportunity to build a truly effective customer success function.

We’re constantly telling IT buyers to think about who they are working with; to identify where they have gaps. Partners need to make sure they are the ones filling those gaps. This means leading all engagements with the “impact” that an investment in a particular piece of technology will have on the customers’ business.

Finally, and as ever, keep listening. Make sure you’re interacting with customers an ongoing basis and, where possible, try to look beyond COVID-19. How everyone acts now will matter through the recovery process. This is what will be remembered.


IDC EMEA IT Buyer Sentiment Surveys (Multiple) March – August 2020

IDC European Partnering COVID19 Sentiment Survey – 2020