© the 2112 strategy group, llc, 2012 no unauthorized republication or distribution sizing up...

© The 2112 Strategy Group, LLC, 2012No unauthorized republication or distribution

Sizing Up Channel Business Acumen

Lawrence M. WalshOctober 2012


No, his mind is not for rent;

To any god or government. Always hopeful, yet discontent,

He knows changes aren't permanent,

But change is.

Tom Sawyer, Moving Pictures, 1981


State of the Channel is Change

• Hardware and software sales declining• Commoditization is accelerating• Entering the Post-PC era• Cloud, cloud, cloud• Mobility is everywhere• Big Data is a big deal• Rethinking value expectations, delivery• New, evolving business models• Time to reinvent the partnership model


New Opportunities

• General IT spending continues to increase – will top $3.2 trillion in 2013

• Businesses investing in business applications, communications, social collaboration and mobility

• Services is the medium in which technology is delivered and consumed

• Market opening wide for advanced capabilities


Things to Think About

• Independent Profitability• Relevancy to Customers• Value in 30 Seconds• Achieving Sales Excellence• Evolutionary Roadmap• Product Development • Brand Awareness & Value• True Technology Partners


Growth is Not a Choice,But it Ain’t Easy


Yes; 74.7%

Don't Know

; 1.2%

No; 24.1%

Does your company have a long-term goal for the next 3 to 5

years?

Long-Term Growth Ambitions

Retire

Shut down

IPO

Sell to Private Party

Spinoff Divisions

Other

Acquisition by a larger company

Steady, organic growth

Organic growth faster than market

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

Long-Term Growth Goals


Financing Growth (Investments)

Self-funded/ca

sh flow

Bank line of c

redit

Distrib

ution credit

Private financin

g

Personal in

vestments

VC/Priv

ate equity

Angel Investm

ents

Grants and lo

ans

Credit card

sOther

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Yes

No

Is your company investing in growth?


Financing Ops vs. Growth

Self-funded/ca

sh flow

Bank line of c

redit

Distrib

ution credit

Private financin

g

Personal in

vestments

VC/Priv

ate equity

Angel Investm

ents

Grants and lo

ans

Credit card

sOther

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Operations Growth


Start-ing

Sales

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

$1,000,000

$11,000,000

$21,000,000

$31,000,000

$41,000,000

$51,000,000

$61,000,000

50%

25%

15%

10%

5%

Comparative Growth Curves


Actual vs. Acceptable Growth Rates

Less than 5 percent

6 to 10 percent

11 to 15 percent

16 to 25 percent

26 to 50 percent

51 to 100 percent

101 to 150 percent

151 to 200 percent

Greater than 200 percent

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%

Acceptable Actual

No; 44.6%

Don't Know; 2.4%

Yes; 53.0%

Does your company have a formal growth strategy?


Channel Actual Growth Trends

Start-ing

Sales

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

Above Average (36.6%)

Channel Average (20.17%)

Moderate (10.7%)

Low (4%)


Sales is Paramount


Cloud & Service Model Stresses

Sales

Technology Partnerships

Service Business

Sales

Technology Partnerships

Service Business

Conventional Services ModelFuture Services Model


Radical Fundamentals


Set Goals


Yes; 74.7%

No; 24.1%

Does your company have a long-term goal for the next 3 to 5

years?

Long-Term Growth Ambitions

Retire

Shut down

IPO

Sell to Private Party

Spinoff Divisions

Other

Acquisition by a larger company

Steady, organic growth

Organic growth faster than market

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

Long-Term Growth Goals


Plan Ahead


Planning For Growth

Yes69%

No18%

Don't Know13%

Should a company like yours have a formal growth strategy?

No; 44.6%Yes;

53.0%

Does your company have a formal growth strategy?


Business Instrument Gaps

No Business Plan

No Sales Plan

No Quarterly Business Reviews

No Strategic Plan/Goal

No Annual Business Review

No Formal Organization

No Business Development Plan

0% 10% 20% 30% 40% 50% 60% 70%

More than 2/3 of the channel lack basic business instruments for guiding operations and strategic development


Invest


Growth Investments

Other

Developing independent products

Increasing reselling of products

Developing hosted services

Branded products made with vendor components

Partnering with SaaS providers

Partnering with hosting proivders

Partnering with service providers

Services with vendor products as components

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%


Measure (Often)


Minimum Review Period

Review of Strategic Plans

Haven’t reviewed in more than a year

Weekly

Annually

As part of strategic reviews

Biannually (every six months)

As needed

Monthly

Quarterly

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

Half of the channel is not re-viewing their business perfor-mance against goals/plans on a regular basis


Adjust


Plan Again


Wash, Rinse, Repeat


Radical Fundamentals

Assess

Goals

Plan

Invest

Measure

Adjust

• Recognition• Commitment• Risk Acceptance• Execution• Assignment/

Responsibility• Accountability• Rewards & Penalties• Continual Change


Think Forward • Research, Analyze, Understand• Have a Vision & Value• Set Goals

– Financial– Performance– Development

• Plan, Plan and Plan• Create, Not Just Resell• Market: Shout It Loud & Proud• Don’t Fear Competition• Collaborate and Partner• Don’t Stop;

Don’t Get Discouraged


From the point of ignitionTo the final driveThe point of a journeyIs not to arriveAnything can happen...

Prime MoverHold Your Fire, 1987


Larry [email protected]

Blog

www.channelnomics.com

Twitter/Facebook:@lmwalsh2112@Channelnomics@the2112group

© the 2112 strategy group, llc, 2012 no unauthorized republication or distribution sizing up...

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