- The document discusses the changing landscape of channel partners in the technology industry and how vendors and partners are managing this change. It provides insights from a survey of channel management professionals. - While the channel continues to play a vital role for most companies, generating over 50% of revenue for many, the survey found most respondents believe their channel is underperforming expectations. - Both partners and vendors face challenges from industry trends like consolidation and commoditization. Respondents outlined initiatives around product strategy, partner relations, and service development to address these issues. However, most initiatives suggested lacked uniqueness.

1. WHAT MAKES US FOLLOWERS?
HOW TO BECOME A GAME CHANGER?
Navigating the changing landscape of
channel partners in the technology industry
Performance Improvement Survey

2. Page2-Tableofcontents
Table of contents
Introduction 3
Methodology and Scope 4
Relationship with Channel Partners 5
Industry Outlook 6
Commoditization 10
Measurement 12
Loyalty and Retention 14
Role of Partners 16
Communication 17
Conclusions 19
About Us 21

3. Page3-Introduction
The speed of change in the technology
industry in relation to products and services
is accelerating, and the distribution needs
of partners are also rapidly evolving to keep
up.
This brings to mind a number of questions:
how is the channel adapting to this
change, is the channel still relevant, are
the roles changing in the channel and how
are vendors and partners managing this
change?
Introduction
Status Quo of partner
channel performance
with in the technology
industry.

4. Page4-MethodolyandScope
Methodology and
Scope
The research was conducted through an
online survey sent to professionals with
channel management responsibility in the
Asia-Pacific region. The results are based on
analyzing the responses.
The respondent profile was mainly Manager
and C-level executives and was quite evenly
distributed between sales, marketing, and
dedicated channel management functional
areas. The vast majority of respondents had a
regional (e.g. APAC) reach of responsibility.
What is your position within the
organization?
What is your functional area of
responsibility?
What is the geographical reach of your
responsibility?
Regional
70%
Worldwide
7%
National
8%
Multiple countries
15%
Manager
48%
C-Level
33%
CEO / Owner
4%
Other
15%
Marketing
26%
Partner
Management
33%
Sales
22%
Customer
Service
4%
Other
15%
0%

5. Page5-RelationshipwithChannelPartners
Relationship with
Channel Partners
It appears that the channel is continuing to
play a vital role in the technology industry’s
path to market. Revenue through channel
partners is still significant with over 70% of
respondents stating that partners contribute
to more than 50% of all revenue.
The number of channel partners varied
significantly among the respondents
What is the approximate number of
channel partners you work with?
What percentage of your revenue is transacted by channel partners?

6. Page6-Industryoutlook
Industry outlook
How do you perceive your industry’s
economic outlook for the next two years?
The overall economic outlook is very positive
among respondents.
Slightly decline
Stay the same
Significantly
improve
Is industry consolidation affecting you?
If yes, where?
Almost 80% of the respondents expressed
that industry consolidation is currently
affecting their business and is here to stay.
Featuring strongly in the responses to
industry consolidation is to improve areas
such as; marketing segmentation, and
marketing intelligence to find innovative
ways to identify and provide a solution to
end clients “pains.” This approach appears
to be a driver for those who are being
affected by consolidation as well as for
vendors and partners trying to extract value
from mergers and acquisitions.
Slightly improve
Significantly decline
Clients
13%Is not
affecting us
21%
All of the
above
21%
Competitors
8%
Chennel
partners
4%

7. Page7-Industryoutlook
More Consolidation
Less ConsolidationAbout the same
What is the industry consolidation long-term trend?
How is your company adapting to industry consolidation?
What strategic measures are you taking?
Capitalizing on key points
of differentiation against
competitors, more strategic
analysis to determine future
directions
Close relationship with
customers to ensure right
response to their business
pains
Be the consolidator
Improving the talent
Continue to extend our
solution capability
Low risk subscription
licencing models versus
high upfront investments
Market segmentationFocus on innovationHorizontal integration
Business Model
Product
Development
Other
“Competitors gain market shares by consolidating, hence we have to think of more innovative
approaches against competitors. Now, it is tougher to protect your market share, let alone increase
it.”

8. Page8-Industryoutlook
When asked what key initiatives are
undertaken to cope with industry change, the
respondents answers can be categorised as
follows:
• Enablement
• Strategy
• Product
• Partner relationships
What key initiatives are taken with regards to the channel in order to cope with the changing
industry environment?
Continuous knowledge
transfer, direct
engagement with end
customers, and wins with
key partner customers
Partner profitability
workshops. More
effective lower cost
customer outreach
Training
Enablement
Exploring out of
territory, venture in
new business model,
more business centric
than product
Strategy
Simplified pricing
models
Low risk subscription
licencing models
versus high upfront
investments
New technology
Product Partner Relations
Expertise programs to
drive partners towards
specialization by industry
verticals or functional
verticals
Bootcamp programs to
help partner’s product
knowledge
Build relevant
competency, hiring the
right talent
Recruit new partners
(with different
skillsets and level of
adaptability to industry
changes)
Improve partner
reviews and
assessments
KPI’s to improve focus
More attractive
channel incentives to
push the focus ‘new’
products
In relation to the previous question, what do
partners need to do to adapt to this?
The key initiatives listed by each category
seem to have not radically changed over time,
as most of these initiatives have been in place
in the channel for a significant number of
years.

9. Page9-Industryoutlook
Whilst 35% of vendors believe partners
are adapting well to selling more holistic
solutions, the responses to how they can
improve suggest that there is a significant
gap in key areas. Respondents felt that
partners need to improve in collaboration
(working closer together throughout the
sales channel) and strategy - from adapting
to the change, recruiting different talent,
managing a cultural shift of product selling
to solution selling to understating client
pain points.
Closer relations
Better understanding
of customer needs
End to end visibility
Collaboration
Solution / Hybrid
model services
Product
Getting out of comfort
zone and start
changing and adapting
Paradigm shift from
Strategy
Customer
relations
Reduced price focus
KPI’s to improve focusNew talents
Change of mindset
Find ways to innovate
such that customers
will see them as their
key advisor to solve all
their business needs
Understanding
customers’ pain points
¨The business model is
evolving where partners are
required to be a more holistic
solution provider, partners are
adapting well to this new posi-
tion in the channel.¨
Strongly agree
Somewhat
agree
Neither agree
nor disagree
Somewhat
disagree
Strongly disagree

10. Page10-Commoditisation
Commoditization
Product commoditization is seen clearly as
a future threat and not surprisingly it is seen
as similarly impacting both partners and
respondent companies. Strategic initiatives
to combat this fell into three main categories:
product strategy, partner relations and
product service development.
Clients
13%
Yes, it is impacting our
business currently and is
likely to impact more in
the future.
38%
Yes, it is
impacting
our business
currently.
12%
No, but there
are signs that it
will be a future
trend.
21%
No
29%
Is product commoditization affecting your
company?
Yes, it is impacting our
business currently and is
likely to impact more in
the future.
37%
Yes, it is
impacting
our business
currently.
17%
No, but there
are signs that it
will be a future
trend.
21%
No
25%
Does product commoditization exist for
your partners?
However the strategic initiatives listed by
respondents appear to lack uniqueness or
innovation with most initiatives suggested
being very commonplace in the market for
some time.

11. Page11-Commoditisation
Move from products to
solutions and services
Value added services
and differentiation on
customer service
Product Strategy
Help partners stay
relevant to their
customers
Partner Relations
Turnkey offerings rather
than single specific
products or services.
Product / Service
Development
Other
Compete on value
added services,
partner with key
alliance partners to re-
package products
Identify unique joint
value propositions
with Partners, not just
product specific.
What strategic initiatives are taken to address product commodisation?
The responses fell into four categories with varying level of complexity.
SaaS model
Solution differentiations
New Product Features
Differentiation and
Focus on Business
outcomes
Innovate product
capabilities, and
delivery channels
Continued development
of value added services
Looking at other sources
of value add
Release of competitive
and innovative products
according to market
trends
Customer training
Price drop
Target specific industry
verticals or functional
verticals

12. Page12-Measurement
Measurement
With almost 40% of the respondents
indicating a negative view on the channel
performance and only 5% of vendors stating
that their partners are performing above
expectations there appears to be significant
room for improvement. Further the majority
of respondents agreed that measurement
criteria of partners had changed, and whilst
this is not the subject of this survey the
question begs to be asked:
Do the partners fully understand and agree
to the new expectations of the vendors?
It would appear the respondents are using
some fair and reasonable metrics to measure
performance such as share of wallet, with
over 80% measuring this at partner or
customer level or both. Surprisingly 39% of
respondent’s state they measure satisfaction
of the partner at the end customer point.
To maximise the product lifecycle, vendors
are constantly challenged to get their
products from the design floor into the
market quickly. Some vendors are going to
great lengths to ensure both the partners and
customers are primed and ready for product
releases.
Additionally, there is a subsequent
challenge of keeping information out of the
hands of competitors, to slow their reaction
time in countering or diluting the offer.
Speed to market has become a crucial
component of the vendor/partner strategy,
with respondents confirming that it is a core
focus with over 75% performing at or above
expectation.
Whilst no levels of satisfaction were
evaluated, respondents seem committed
to measuring their own performance at the
partner level with over 70% using a metric
of Net Promotor Score or a similar indicator.
Do you feel your channel is performing to
expectations?
Below expectations
39%
At expectations
56%
Above expectations
5%
With almost 40% of the respondents
indicating a negative view on the channel
performance and only 5% of vendors stating
that their partners are performing above
expectations there appears to be significant
room for improvement. Further the majority
of respondents agreed that measurement
criteria of partners had changed, and whilst
this is not the subject of this survey the
question begs to be asked:
Do the partners fully understand and agree
to the new expectations of the vendors?
It would appear the respondents are using
some fair and reasonable metrics to measure
performance such as share of wallet, with
over 80% measuring this at partner or
customer level or both. Surprisingly 39% of
respondent’s state they measure satisfaction
of the partner at the end customer point.
To maximise the product lifecycle, vendors
are constantly challenged to get their
products from the design floor into the
market quickly. Some vendors are going to
great lengths to ensure both the partners and
customers are primed and ready for product
releases.

13. Page13-Measurement
Do you measure your partner’s satisfaction
with you, if so do you use a metric such as
Net Promoter Score (NPS)?
Nearly 70% of the respondents use Net
Promoter Score or similar to measure the
satisfaction.
Has the measurement of partners changed
in line with the evolution of the market?
No
28% Yes
61%
N/a
11%
Do you measure satisfaction of end
customer to partner?
No
50%
Yes
39%
N/a
11%
Below expectations
At expectations
Below
expectations
It is not a focus
We have a KPI /metric to measure share (of
wallet) at a ...
Both a partner and
a customer level
52%
We don’t measure it
19%
Customer level
19%
Partner level
10%
Categorized by customer
frequency, by their YoY
CAGR & current $/VAR
over expected Partner
Long Term Value
Growth, revenue
& margin
contribution
How do you measure the cost of
losing a partner?
Only by the top
line number as
revenue lost.
Past revenue
Market share
and share of
wallet
Revenue growth and
profitability, though
there are other
intangible costs as
well.
Future
contribution
Past
performance
Other

14. Page14-LoyaltyandRetention
Loyalty and Retention
The risk of losing or exiting a partner
relationship holds various consequences
and exit barriers include the risk of losing an
end customer. When asked, “When partners
are lost if exited, do you retain the end user
customer? 44% stated that the end user
customers were retained most of the time
and additional 50% were retained some of
the time. With only 6% stating that the end
customer is never retained, it would appear
the loyalty to the vendor is fairly strong,
regardless of their partner relationship.
When partners are lost or exited, do you
retain the end user customer?
If the vendors are exuding so much power
in the channel, this is a possible reason why
there is resistance from the partners to share
information. Significant information gaps
exist with respondents stating the biggest
gaps relate to Visibility, Alignment, Market
Intelligence, Customer needs and Partner
Most of the time
44%
Is there a formal process or technology in
place to gather competitor Intel?
Some of the time
50%
None of the time
6%
No
61%
Yes
33%
N/a
6%

15. Page15-LoyaltyandRetention
Where do you see the biggest information gap(s) on the partner side regarding your customer
relations?
No visibility
Visibility
Strategy
alignment for a
true partnership
Lack of engaged
hands on between
our services and the
Partners offering,
continual product
only focus from the
Partner Product
team to sales
continues to be an
issue
KPI’s to improve focus
Mainly on products/
solutions innovation
that we have taken
and partners not
kept abreast or up
to speed on such
innovations.
Alignment
Market
Intelligence
Collaboration Collaboration
Some channel
partners not
willing to share
information
Competitive
market data
Wallet share
and opportunity
analysis
Understanding
of ‘sweet spot’
in terms of use
case
Customer’s
needs and
decision making
process
Partners ability
to keep current
Partners are not
self-sufficient
in the region.
They expect
free training and
hand holding
every step of the
way”
You would imagine vendors have an appetite
for real data in the way of competitor intel
and revenue forecasting, however only
33% have a formal process or technology in
place to gather competitor intel. Also when
asked, “How is revenue forecasted collected/
measured? Is it trustworthy?”.
The responses varied from not trustworthy
through to a high degree of trust and
validation methodologies.
• Not trustworthy
• Through CRM system and quarterly reporting
• Forecast accuracy varies
• In case of a revenue share model
• Through Sales Management
• Somewhat trustworthy through Partner portal
• From internal CRM system
• Top down with no understanding of the
How is revenue forecasting collected /
measured? Is it trustworthy?
regional markets

16. Page16-RoleofPartners
Role of Partners
Whilst over 75% of the responses it’s not
a surprise that vendors expect partners to
provide visibility on future needs of the
market as a core function they need to
perform. An additional and overwhelming
90 % expect direct feedback on their
products and services.
So whilst it appears partners are demanding
digital and multichannel communications,
with partners needing to have access to
content Any Where, Any Time, Any Device ,
the importance of face to face relationships
with partners remains of critical importance.
Whilst conferences, incentive and events is
one of the platforms to foster partner face to
face relationships, over 75% of respondents
felt that these played an important role
in partner engagement and further 80%
of respondents stated the ROI on these
investments was greater than average vs
alternatives.
Neither agree nor
disagree
Somewhat agree
Strongly
agree
Strongly disagree
¨It is a core function of the
channel partner to provide
visibility on customers’ future
needs¨
¨We expect the partner to pro-
vide direct customer feedback
on our products and services¨
Strongly
agree
Somewhat agree
Somewhat disagree
Strongly disagree
Neither agree nor
disagree
Somewhat agree
Strongly
agree
Strongly disagree
¨Our partners are involved in
collecting Intel on our compe-
titors¨

17. Page17-Communication
Communication
¨Partners are demanding mul-
tichannel communication, our
partners need to have access to
our content Any Where, Any
Time, Any Device¨
Somewhat disagree
Strongly
disagree
Strongly
agree
Somewhat
agree
Neither agree nor
disagree
¨Events, conferences and
incentives still play an impor-
tant role in partner engage-
ment¨
Somewhat disagree
Strongly
disagree
Strongly
agree
Somewhat
agree
Neither agree nor
disagree
¨Partner relations are suppor-
ted by multichannel communi-
cations, but it is critically im-
portant to have personalized
relations with partners¨
How does the ROI of incentives and events
rate compare to other lead generation
activities?
High
33%
The ROI
is not
measured
17%
Low
11%
Average
39%
Strongly
disagree
Strongly
agree
Somewhat
agree
Neither agree nor
disagree

18. Page18-Communication
Enabling technologies
Whist a myriad of technologies are available
to facilitate collaboration and efficiencies,
what has been adapted in the marketplace?
The standouts are common/integrated CRM
systems (45%) and common integrated
marketing systems (35%).
What enabling technologies are you providing
into the channel?
Common/Integrated
CRM
Common/Integrated
Marketing systems
Data integration Common/Integrated
business intelligence/
analytics collaboration,
etc.
Common/Integrated
ERP

19. Page19-Conclusions
One of the key aspects that the report
focused on was the industry consolidation
and how it impacts the companies and their
channel partners where the companies
seem to adapt different strategies to reduce
the risks of industry consolidation through
expansion, innovation, differentiation, and
moving closer to end clients.
Another key trend was the product
commoditization as a significant threat.
The respondents presented a wide variety
of initiatives taken to cope with the
commoditization that ranged from simple
tactics to larger strategic initiatives.
An interesting finding from the study was
how companies are aiming to help their
channel partners in the changing industry
environment.
The initiatives were categorized in four key
areas:
1. Enablement - Knowledge transfer and
training programs.
2. Strategy - Remodeling the channel
partner structure and modifying the
existing business models.
3. Product - Improving the product,
technology, and pricing models.
4. Partner Relations - Better measurement
and assessment as well as rethinking the
incentives.
Conclusions
The received responses
for the channel survey
reveal in general a
positive outlook for the
technology companies
in Asia-Pacific.

20. Page20-Conclusions
Interestingly when asked about what the
companies expect from channel partners
in order to better adapt to the changing
environment the majority of the replies
focused on:
• Closer relation and collaboration with
the vendor.
• Reduced price focus and more solution
oriented selling.
• Shift from product management to sales
and adapting out of the comfort zone.
• Becoming a client advisor for business
needs.
Measuring efficiently the channel
performance is evidently one of the keys
to success but the study showed gaps
both in companies current measurement
process as the means to improve the partner
performance to meet the expectations.
Overall the research shows some interesting
areas of improvement especially as to
the vendor-channel relation as well as in
developing models that enable improved
information flow to both directions; thus
gaining competitive advantage through
increased visibility on the market and the
changing requirements.
We hope this report provides some
interesting insights to the relationship
of channel partners with technology
companies doing business in the Asia-
Pacific.
Contact the MCI Performance
Improvement experts to have a
conversation and explore how MCI can
help address the changing landscape you
are facing, and share industry insights
and solutions that focus on these pain
points and provide positive impact to
your business

21. Page21-AboutUs
About Us
MCI Performance Improvement team of experts work
with a vast range of corporates in the region desig-
ning, implementing, managing and fulfilling channel
engagement, incentive and loyalty strategies which
focus of different pain points of our clients to provide
positive impact to their businesses.
CONTACT OUR EXPERT
Matthew Smith
Director - Performance Improvement
matthew.smith@mci-group.com
CONTACT OUR EXPERT
Thomas Stecher
Director - Business Development
thomas.stecher@mci-group.com
MCI Group Asia Pacific | Singapore
20 Bendemeer Road #04-02 Cyberhub Singapore 339914
T:+65 6496 5580
www.mci-group.com