It’s hard to believe that yet another year has passed. This has been a big one for Zift Solutions – we raised $70 million and invested heavily in new enhancements for the ZiftONE Platform. All these are bets we place on the resiliency and vitality of the channel model. We aren’t the only ones; investors are also courting tech distributors and partners. In good times and challenging times, the technology channel is a great place to drive revenue and cost efficiencies.

With the pandemic (mostly) behind us, economic uncertainty all around us and the AI revolution ahead of us, we humbly ask what’s in store for technology partner programs in 2024?

To answer this question, we spoke with seven industry experts. Our panelists include:

Looking Back on Channel Partner Program Trends in 2023

At the end of 2022, we surveyed technology channel experts and identified six partner program predictions for the IT and telecom channel space.

For the most part, these predictions were realized or can safely be categorized as emerging channel trends. In general, they reflect businesses’ growing reliance on increasingly sophisticated technology and the resulting need for more skilled and varied partners who can fulfill clients’ needs with a range of solutions and professional services delivered throughout the customer lifecycle. The gloomy macroeconomic climate, which loomed large over the channel in 2023, also spurred partner program leaders to focus spend on strategies for directly influencing customer wins and driving sustained performance among select partners.

6 Channel Partner Program Predictions for 2024

As we gear up for 2024, we find that the macroeconomic situation has degraded further, with tech companies laying off employees and raising expectations for partner productivity. Add to this ChatGPT’s debut, which spurred an AI arms race that has many vendors and partners playing catchup to ensure their clients employ rational strategies for AI deployment and adoption. Meanwhile, partner program leaders are beginning to operationalize partner ecosystem models to influence more sales and retain more customers.

Against this backdrop, our panelists offered the following partner program predictions for the new year:

1. Partner Ecosystems Are Driving the Rise of RevOps

Revenue Operations (RevOps) is a relatively new business structure that seeks to put all go-to-market models and channels under one department to improve revenue management.

As Zift noted in a recent blog, RevOps, Explained, “The emergence and increasing dependence on ecosystem partners for referrals, sales, service, deployment, integrations and retention is a significant driver for RevOps. Without it, organizations will struggle with a fragmented approach to revenue growth.

“We’re moving from random acts of partnering to integrating second-party partner data into RevOps,” says Nearbound’s Jill Rowley. In turn, she says, that enables a go-to-market strategy that’s informed by a more holistic set of data.

Indeed, unified data management is a key tenet of RevOps that ensures all teams are working with the same information to improve alignment and forecasting. It also encourages data-driven decision-making that helps to refine go-to-market strategies.

Rowley is part of an emerging chorus that calls this approach “nearbound” sales and marketing (in contrast to the more commonly known “inbound” and “outbound” sales and marketing strategies). “Nearbound will go mainstream, and at a faster pace than inbound,” says Rowley, alluding to the meteoric rise of digital-based inbound sales and marketing strategies in the 2010s with the advent of marketing automation from companies like Hubspot.

“Where outbound interrupts and inbound attracts, nearbound surrounds,” Rowley explains. “Nearbound is a game-changing [go-to-market] strategy that is reshaping the partnership landscape. It’s a strategy that taps into the power of your ecosystem. When you partner with those your buyers already trust, you close more deals faster and deliver more value sooner.”

2. Partner Tiers Are Becoming Less Relevant in the Partner Ecosystem Era

The effectiveness of medal-level (e.g., silver, gold, platinum) partner tiers has been the subject of debate for several years. It seems the emergence of partner ecosystem models – with influencer, transaction and retention channels – may soon put the final nail in the partner tiers’ coffin.

“The past decade has seen partners transitioning from mainly product sales to a host of newer models based on services — project and recurring revenue, and/or businesses based on referrals, influencing and consulting work,” says CompTIA’s April. “These newer business types don’t align as well with legacy vendor programs that reward volume sales and revenue quotas with a benefits system based on status tiers.”

Partner expert and former channel chief Tina Gravel agrees, noting that partner ecosystems with a range of partner types don’t line up well with traditional graduated tiers.

“A bronze, silver and gold package will not adequately cover a small channel program that has consultants, resellers, agents and MSPs. They are all so different [and] need different incentives and support,” says Gravel. “Today, the fact is that the more channel partners you have, the more routes to market and segments you have, the more programs, processes and incentives you will have to build and support. The time of the simplified programs has gone the way of the dodo.”

Indeed, partner programs will create programs tailored to partner business models. It is not uncommon today to see programs tailored to commission-based sales agents and margin-based resellers.  Within each of those models are subsets of partners as well. For example, sales agents may get recurring commissions and require training and extensive engineering or customer support, while referral partners may get one-time commissions and require very little support. Similarly, margin-based resellers operate under many models, including straight resale, white-label or co-branded — each with a different discount level and support requirements.

The new wrinkle is with the influencer, retention and alliance channels, which are not transactional. The challenge then becomes how to compensate these partners at the point of value. And, in some cases, compensation isn’t monetary. For a deeper dive into the nuances, check out our recent blogs:

3. Partner MDF & Incentives Will Come with More Strings Attached

We surveyed our panelists in the midst of fall budgeting for 2024. Needless to say, belt-tightening was top of mind. It’s no surprise to hear that they expect market development funds (MDF) and incentives to be distributed more judiciously and creatively.

“More [vendors] are thinking of MDF for lead gen as opposed to parties and sporting events,” says Rad-Info’s Radizeski.

BuzzTheory’s Henderson agrees, noting that vendors find less value in the large partner networking events and more value in working closely with individual partners on specific customer-facing campaigns. “It’s a hard line to walk since vendors need to maintain relationships and a presence at key distributor events,” Henderson says. “Some vendors are finding a good middle ground by enlisting the distributors to support targeted spending on customer lead gen for top-performing partners.”

Last year, our panel predicted that marketing dollars would go toward more customer events. Here again, vendors are getting creative. “Several of our clients host customer-facing events where partners invite their top prospects to enjoy an exclusive experience or sought-after speaker,” says Henderson. “While these events are meant to nurture customer relationships, partners also love them because they’re unlikely to be able to afford or organize them on their own. It’s sort of a two-for-one. With budgets stretched, targeted spending with measurable ROI will continue to be a priority.”

While on the one hand, our panel predicts more strategic investments, on the other hand, Channel Chief Gravel says the slow economy is also triggering a rise in SPIFFs designed to incentivize short-term sales in the quarter offered.

Want to learn more about how to structure and run an MDF program? Check out our ebook Unlocking the Potential of Market Development Funds.

4. Training & Certification Will Become More Important in the Age of AI

Technology is evolving quickly. Witness the floodgates of new solutions following the release of ChatGPT’s generative AI. AI is not only the poster child for accelerated technology; it’s behind many advancements and enhancements to existing tech solutions like cybersecurity, contact centers and more.

Partners are challenged to keep pace, making vendor and distributor training and certification programs increasingly important.

“End users want solutions, and the technologies those solutions are built on (think AI, analytics, cybersecurity, etc.) are growing more and more complex,” said Channelholic’s Rich Freeman. “Anyone in the channel who wants to remain relevant to their customers, even if those customers are SMBs, is going to need to continually burnish their skills. Training resources from vendors and distributors are an excellent way to do that.”

Our panelists also predict that certifications will become more important to partners who must possess and prove qualifications to recommend, engineer, install or support advanced technologies.

“Especially with the advent of AI in every product, training must come with proper certification,” says Gravel.

Rad-Info’s Radizeski agrees and adds that it’s a good investment for partners to make. “For security, data science, artificial intelligence, and some other technical areas, certifications will always pay off,” he says. “Will partners embrace them? Some will. Some won’t.”

To improve the chances of partners consuming training, we recommend self-paced technical training through a learning management system (LMS). And, for sales and product training, we recommend doling it out in small doses to overcome short attention spans.

“Microlearning – short, snackable trainings – or access to on-demand advice are going to become the dominant way partners access training for both business and technology,” says channelWise’s Rose.

5. Distributors Will Continue to Play a Vital But Evolving Role in the Channel

Distributors on both the IT and telecom sides of the tech business have been the vital nexus between vendors and partners for years, making it easier for vendors to sell through thousands of partners and for partners to sell thousands of vendor solutions. Instant scale enabled thriving channels — a value proposition that continues today.

“I don’t expect the degree to which channel partners rely on distributors or [technology solutions distributors (TSDs)] to change dramatically in 2024, but I do expect both models to remain at least as relevant as they already are,” says Channelholic’s Freeman. “To remain relevant to their clients, regardless of size, MSPs and other channel partners must offer outcome-based solutions. Outcome-based solutions require a complex mix of software, hardware, and services that few IT providers can handle on their own. Distributors and [TSDs] can not only help partners aggregate those solution components but fill gaps in their services capabilities as well.”

Indeed, distributors are adding capabilities, including engineering and project management, as well as new solutions and distribution models to support evolving “as a service” channels.

“Distributors, long the hardware fulfillment middle piece in the technology go-to-market chain, have been evolving their own business models to embrace dynamic digital marketplaces and e-commerce platforms,” said CompTIA’s April. “The likes of Ingram Micro and newer, cloud-only companies such as Pax8 are using their ample resources, scale, and tech aggregator status to build marketplaces that serve channel firms. The channel has mostly gone along for the ride.”

According to April’s unpublished research, CompTIA has found more than half (56 percent) of partners today have used one of the distribution’s cloud-based marketplaces and/or e-commerce platforms in the last year. Nearly half (47 percent) of partners said they use distribution’s marketplace capabilities to aggregate multivendor cloud services to build customer solutions.

6. Tightening Budgets Will Force Partner Programs to Drive Efficiencies & Scale

You’d think a pay-for-performance channel would be immune to vendor budget woes, but partners require a lot of care and feeding, such as training and marketing support. This is especially true as technology becomes increasingly complex.

“Many tech companies downsized their staffs,” says channelWise’s Kathryn Rose. “But partners are looking for more help, not less, so finding scalable solutions to activate, retain and enable partners will be the key to success.”

While there’s no substitute for experienced channel managers, marketers and channel ops, there are efficiencies to be gained by amplifying their capabilities with self-service and automation through a partner portal or partner relationship management (PRM) platform.

“A PRM tool is your channel teams’ secret weapon in good times and especially in not-so-good times,” says BuzzTheory’s Henderson. “The PRM can guide your partners through training, enable their marketing campaigns, give them direct access to deal and payment statuses and more. Anytime partners can help themselves through the PRM; it frees up your experts to focus on critical issues like getting deals unstuck and driving revenue.”

Looking Forward

As we look ahead, we continue to see tremendous opportunity in the technology channel, its evolution to a partner ecosystem and its elevation to a core revenue operation. Both bode well for its continued role in delivering value to tech-enabled businesses throughout the customer lifecycle.