We are now firmly in the subscription era. Driven by changing customer behavior and software (powered by the cloud) eating the world, and accelerated by the pandemic, most technology vendors have either committed to or made significant strides to transform their business models. Subscription and consumption business models are an effective hedge against the current macroeconomic uncertainty. The models look to build a stable base of recurring customers and create predictable revenue that vendors can plan for (and enrich) in the future. Benefits include exponential growth potential, when gaining new subscribers, and attaining greater than 100% retention of current revenue. Successful subscription businesses achieve more efficient and manageable growth. Without the need to hit the reset button each quarter, vendors and partners can benefit from increased business agility. The new and never-ending customer journey can logically be divided into three steps: getting the customer to the dance (vendor selection), getting them up on the dance floor (initial purchase) and keeping them dancing all night long (retention and enrichment). Large vendors are committing to subscription and consumption models In addition to cloud IaaS, PaaS and SaaS companies that built their models as subscription, consumption, product-led growth (PLG) or value-based, we have seen a full commitment by the largest hardware companies in the world. Cisco announced Plus in March 2021, followed shortly after by Dell announcing Apex. Lenovo announced TruScale in September 2021 and the company it acquired its PC and infrastructure businesses from, IBM, spun out its infrastructure services business into Kyndryl and committed to a full multi-cloud, hybrid cloud and AI-focused recurring model. HPE started a pay-as-you-go model in 2006 and continued to develop what became the GreenLake announcement in late 2017, largely direct focused. Having a multi-year head start over its rivals, HPE was able to create a successful channel program (with some notable early bumps in the road) and recruit subscription-friendly partners as a first mover. GreenLake has now delivered three straight quarters of triple-digit growth, even outpacing the growth of supercharged IaaS leaders AWS, Microsoft Azure and Google Cloud. Suffice it to say, many customers and partners are ready for the subscription era. For those vendors looking to embrace that model, here is how to successfully build channel ecosystems to drive subscription and consumption models: 1. Channel programs must change from recognizing/paying at the point of sale to recognizing/paying at the point of (partner) value For over 40 years, channel programs and the underlying technology have been designed to drive the sales motion. Enabling resellers, MSPs, distributors, retailers, dealers and agents to more frictionlessly market and sell products at scale was the goal of every channel leader.

1. Jay McBain
Chief Analyst,
Channels, Partnerships, & Ecosystems
jmcbain
jaymcbain
The View From 30,000 Feet

2. DECADE OF THE ECOSYSTEM
CUSTOMER
RELATIONSHIP
MANAGEMENT
MARKETING
AUTOMATION
ECOSYSTEM
MANAGEMENT
2000 2010 2020

3. Source: Visual Capitalist
THE $94
TRILLION
WORLD
ECONOMY

4. 75%WORLD TRADE FLOWS INDIRECTLY

5. TRENDS
TO WATCH

6. 176% of CEOs think current business
model will be unrecognizable in 5 yrs
Source: Accenture
.

8. Ford is looking at changes to its go-to-market
strategy for electric vehicles, which will need
more online sales and require less inventory.
Source: Business Insider

9. Ford is looking at changes to its go-to-market
strategy for electric vehicles, which will need
more online sales and require less inventory.
Tesla's no-dealer model is a guidepost for
squeezing more profit out of each vehicle.
Source: Business Insider

10. “I was freaking out before I had even shaven that day.”
- Ford Dealer
Source: CNBC

12. Source: Chuck Robbins, CRN
Cisco Plus gives our customers
flexibility, and it gives us and our
partners predictability of future revenue.
We can be more assertive relative to
what we can share with Wall Street.

13. The “new” Dell Technologies was launched today with Apex that
changes the way channel partners and customers produce, buy and
manage Dell products and services.
Source: Michael Dell

14. Lenovo TruScale offers a flexible
consumption model, expanding
well beyond its roots.
TruScale has now become our
corporate brand.
Source: Yang Yuanqing

15. We are rapidly adding SIs, ISVs, and major third-party SW partners.
We are investing $1 billon in our ecosystem so that our partners can
play a much bigger role in fulfilling the many needs of our clients.
Source: Arvind Krishna, CRN

16. With as-a-service bookings up 136 percent in the most
recent quarter, the HPE GreenLake on premise cloud service
is growing faster than public cloud.
Source: Antonio Neri

17. BUSINESS &
GOVERNMENT IT SPEND
$4.5T

18. 2 Average customer uses 7 partners
along the journey
A reason, a season, or a lifetime

19. Alliance channels
Transactional channels
Influence/retention “shadow” channels
Influencers
Affiliate
Affinity
Advocate
Ambassador
Co-sell
4 million-plus
Emerging technology
(IoT, AI, automation,
blockchain, quantum,
metaverse, etc)
800,000
Management consultants and
other professional services
2 million-plus
Legal
compliance
100,000
VAR
Retail
Distribution
500,000
MSP
75,000
MSSP
10,000
Telco
agents
30,000
Print
Copy
10,000
Accounting
CPA
300,000
Digital
agencies
200,000
XaaS
Consultants
(implement,
integrate)
100,000
GSI
20
Healthcare
240,000
Transport
120,000
Construction
150,000
ISV
SaaS
No-code
175,000
“New” global technology channel
Source: Canalys estimates, June 2022
Retail
POS
2,500
Pro
A/V
5,000
RSI
1,000

20. 3 B2B buying is changing; so is the
psychology, behavior, and journey
.

21. GET OBSESSED OVER 28 MOMENTS
OF THE NEW CUSTOMER JOURNEY
Search
Social media
Events
Podcasts
Magazines
Associations
Peer/user groups
Vendor communities
Distribution
Analysts 
Bloggers/Thought Leaders
Consultants/Coaches
Direct Website/CPQ
Marketplaces
Sales Demo
Training companies

22. THE PURCHASE IS NOW ONLY
THE FIRST 30 DAYS WITH
THE CUSTOMER…

23. 1. Driving Adoption / Habit Forming
2. Deeper Integrations / Stickiness
3. Upsell / Cross-sell / Enrichment
RETENTION

24. EVERY 30 DAYS… FOREVER

25. Alliances: technology, strategic and business
New partner opportunities
Customer
digital
journey
Referrals, alliances,
consultants,
ambassadors,
influencers, advocates,
affiliates, affinity
Influence
Vendor
selection and
transaction
VARs, agents, dealers,
resellers, marketplaces,
distribution, MSPs /
MSSPs, retail
Land
Retention,
enrichment and
lifetime value
Integrators, consultants,
industry services,
implementors, MSPs /
MSSPs, agencies, ISVs
Expand

26. 4 Does ecosystem orchestration
require new leadership?
.

27. . Source: CRN

28. . Source: CRN

29. . Source: CRN

30. . Source: CRN

31. Breaking down the silos –
Ecosystem organizations matrixed
5

32. EMBEDDED ECOSYSTEM TEAM
MARKETING
SALES
CX
PRODUCT
STRATEGY
FINANCE
OPERATIONS
TECHNOLOGY

33. 6Marketplaces
staying power
Source:
US Census Bureau

34. 0%
20%
40%
60%
80%
0
5
10
15
20
25
2019 2020 2021 2022 2023 2024 2025
CSP marketplace spend Growth
End-user spend
(US$ billion)
Year-on-year
growth
Cloud marketplaces to grow rapidly
• Source: Canalys estimates and forecasts, September 2021
Five-year CAGR: 56%

35. HYPER
MARKETPLACES
SUPER
MARKETPLACES
NICHE
MARKETPLACES

36. HYPER
MARKETPLACES
SUPER
MARKETPLACES
NICHE
MARKETPLACES

37. HYPER
MARKETPLACES
SUPER
MARKETPLACES
NICHE
MARKETPLACES

38. HYPER
MARKETPLACES
SUPER
MARKETPLACES
NICHE
MARKETPLACES

39. Debate About Marketplace Taxation
Moves From Consumer To B2B

40. 7 The embedded/white-labeled
future replaces the SKU

41. Source: Inside HPC

42. Source:
Seeking Alpha

43. Source: CRN

44. 8Distributor disruption continues -
Battle for Ecosystem orchestrator

45. Source: Catalyst

46. Source: ChannelE2E

47. Source:
Channel Futures

48. Distributors must…
Come out
of hiding

49. Distributors must…
Come out
of hiding
Become platforms
of distribution
&

50. 9 Multipliers instead of margins –
New language of ecosystem leaders

56. 1 Ecosystem technology is one of
the fastest growing SaaS categories
0

57. Ecosystem
marketplace and
integrations:
US$275 million
Channelfinance,
pricingand inventory:
US$618 million
Channel incentives
management:
US$793 million
Canalys Channels Ecosystem Landscape 2022
Source: Canalys estimates, June 2022
223 companies
US$3.9 billion
software revenue
(from 2021)
US$8.9 billion
forecast channel software
market (by 2027)
Through-channel
marketingautomation:
US$581 million
Channellearning
and readiness:
US$541 million
Partner relationship management:
US$460 million
Channeldata management:
US$304 million
Ecosystem data
and mapping:
US$54 million
Ecosystem management and
orchestration: US$82 million
Ecosystem influence
and attribution:
US$231 million
Ecosystem recruitment
and visualization:
US$29 million

58. Canalys Channels Ecosystem Landscape 2022
Source: Canalys estimates, June 2022
Channel data management:
US$304 million
26 companies
US$304 million
software revenue
(from 2021)
US$756 million
forecast CDM market
(by 2027)

59. Canalys Channels Ecosystem Landscape 2022
Source: Canalys estimates, June 2022
Partner relationship management:
US$460 million
32 companies
US$460 million
software revenue
(from 2021)
US$887 million
forecast PRM market
(by 2027)

60. Channel finance,
pricing and inventory:
US$618 million
Canalys Channels Ecosystem Landscape 2022
Source: Canalys estimates, June 2022
28 companies
US$618 million
software revenue
(from 2021)
US$1.1 billion
forecast finance market
(by 2027)

61. Channel incentives
management:
US$793 million
Canalys Channels Ecosystem Landscape 2022
Source: Canalys estimates, June 2022
41 companies
US$793 million
software revenue
(from 2021)
US$1.8 billion
forecast CIM market
(by 2027)

62. Canalys Channels Ecosystem Landscape 2022
Source: Canalys estimates, June 2022
Through-channel
marketing automation:
US$581 million
46 companies
US$581 million
software revenue
(from 2021)
US$936 million
forecast TCMA market
(by 2027)

63. Canalys Channels Ecosystem Landscape 2022
Source: Canalys estimates, June 2022
Channel learning
and readiness:
US$541 million
50 companies
US$541 million
software revenue
(from 2021)
US$1.1 billion
forecast CLR market
(by 2027)

64. Canalys Channels Ecosystem Landscape 2022
Source: Canalys estimates, June 2022
Ecosystem
recruitment and
visualization:
US$29 million
Ecosystem marketplace
and integrations:
US$112 million
Ecosystem management
and orchestration:
US$82 million
Ecosystem influence and
attribution: US$231 million
Ecosystem
data and
mapping:
US$54 million
80 companies
US$672 million
software revenue
(from 2021)
US$2.3 billion
forecast ecosystem market
(by 2027)

66. Jay McBain
Chief Analyst,
Channels, Partnerships, & Ecosystems
jmcbain
jaymcbain
Thank you!

67. Insight. Innovation. Impact.
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