The genesis of the term “cloud computing” may be somewhat cloudy (some point to a Compaq business plan from 1996), but it’s clear that internet-based computing has had a substantial impact on our lives. The challenges associated with adapting to the “everything-as-a-service (XaaS)” business model are considerable, especially for long-established original equipment manufacturers (OEMs) who grew up on margin-rich product sales. Newer OEMs face challenges, too, around brand awareness and customer acquisition.
In fact, one could argue that two of the biggest trends the OEM community is grappling with right now—channel management and end-user customer success—revolve around the customer. While neither of these is a new concept, the speed with which even the most innovative products commoditize, coupled with the near-ubiquitous nature of cloud-based delivery and consumption, have OEMs looking at their extended customer base in a new way.
Partner acquisition and partner enablement remain at the heart of a successful channel management program.
- Partner acquisition – As product prices drop and margins erode, and as OEMs shift toward their own proprietary XaaS offerings, reaching every possible end-user customer—not just the big ones OEMs deal with directly—becomes imperative. Established OEMs are looking for both the acquisition of – and re-engagement with –VARs they may not have interacted with recently in order to drive additional brand recognition and scale.
- Partner enablement – Once a partner is engaged, the next challenge for an OEM is enabling them to sell their product or service. Educating the VAR—in many cases, on complex portfolios—from features to compatibility to real-world business applications is essential to drive end-user adoption.
End-User Customer Success
OEMs must not only consider the needs of the partners selling their products and services, but also the needs of the end-user customers who are buying them for their own use. Their enablement is just as important as partner enablement, especially when a partner represents multiple OEMs or doesn’t have the bandwidth to thoroughly understand all of an OEM’s products and services. Does the customer understand how they can use those products and services to solve their business challenges and help them become more successful, faster? Do they know how to get the most out of their investment? Do they know when, why and how to refresh or upgrade their technology? Educating the end-user customer on behalf of the OEM, either through the VARs or directly —and ensuring the customer is successful—is a great way to increase sales and customer loyalty.
The Bottom Line: Make It Easier
The easier an OEM makes it to sell and use their technology, the more will be sold. That simple truth is driving its own trends, some of which are:
Services That Support XaaS Consumption Models – It’s one thing for an end user to want to utilize a cloud-based service, but it’s another to choose, deploy and manage it. The complexity only increases when a mix of XaaS and in-house applications are used. And, regardless of model, there’s still hardware to deal with. The nature of recurring revenue streams makes delivering services that support cloud implementations vital to the revenue mix. Today’s essential knowledge and capabilities include, but are not limited to:
- Technical expertise
- Product/service compatibility and integration
- Configuration and customization
- Lifecycle management
- Supply chain management
Renewed Interest in Renewals – Providing OEMs with a programmatic approach to renewals (service contracts, warranties, etc.) and product refreshes is an efficient way to generate revenue with limited investment. Again, this is nothing new, yet the attach rate for OEMs is often as low as 4 percent. That’s an incredible opportunity that remains virtually untouched, especially when you consider that a 20 percent attach rate can provide a significant boost to the bottom line. Regular auditing of end-user customers’ products and networks to make sure they’re still under license or warranty is a great way to provide leads to VARs.
For OEMs, providing support to VARs who sell your products and services—and this includes enabling end-user customer success—is essential, but it can be expensive. And the original challenge still exists: how to reach, support and manage more customers when you don’t have the investment dollars (or the desire) to do so in-house.
That’s where a company like Tech Data comes in. I’ve seen my share of cool products and services over 20-plus years in the technology industry, but the reinvention of the way technology is delivered and consumed is nothing short of revolutionary. In my new role leading Customer Lifecycle Management Services (CLMS) at Tech Data, I’ve been incredibly impressed by the knowledge and capabilities our team possesses across all the top technology vendors, and I’m amazed by the breadth and depth of support services we offer, including revenue growth services. OEMs invent, VARs sell, and we make it easier for them to do both, efficiently and more cost-effectively.
I’ll be talking more about some of the essential support services we provide, why we do so, and how OEMs can benefit from them in future blogs. For now, get in touch with me or check out servicesbytechdata.com. I think you’ll be impressed, too.
About the author
Jamie Jalazo is vice president and general manager of Customer Management Services for Tech Data.