Accenture: Channel partner ecosystem taps cloud, innovation

The channel partner ecosystem has undergone a sea change, where cloud providers now represent key allies and vendors are rated for innovation rather than money-making potential.

That observation comes from an Accenture report published in 2021 on partner-vendor relations in the cloud-first era. The report, "Building high impact partner ecosystems," was based on a survey that polled 1,150 channel companies, including resellers, systems integrators, service providers and ISVs.

Michael Heald

The report depicts an industry sector with a dramatically different approach to conducting business and creating alliances. "It's a once-in-generation shift," said Michael Heald, senior managing director and ecosystem and growth lead at Accenture Strategy, after the report was released. "The movement to this new type of model is highly accelerated."

Channel partners have embraced "the ascent of cloud providers," the report found. The survey asked respondents which vendors made up the majority of their revenue. Channel companies identified Microsoft, Google Cloud and AWS -- the leading platform vendors -- as their top three partners with regard to wallet share, said Dave Sovie, senior managing director of globalization for Japan-based clients and a global account lead at Accenture.

Not so long ago, companies such as Dell, Cisco, Hewlett Packard Enterprise and IBM would have topped the list on a similar survey, he added.

In addition, as partners work more closely with different types of vendors, they have more options in doing so. Seventy-seven percent of partners said they had more technology provider choices than they did three years earlier, the Accenture report noted.

Partners emphasize innovation

In another sharp break with the past, partners surveyed by Accenture ranked the "ability to innovate" as the No. 1 vendor selection criteria. Partners look for companies that will "co-innovate with [them] to develop unique solutions for clients," Sovie said.

In past years, partners would typically cite ease of doing business and profit potential as their main reasons for working with one vendor over another, Sovie noted. Monetary benefits, however, ranked last among the list of eight vendor attributes in Accenture's survey. "The channel has operated in a traditional way since the rise of the PC industry" in the 1980s, he said. But the rapid growth of cloud computing has sparked an industrywide reevaluation of long-established approaches.

Dave Sovie

Partners' prioritization of vendors' innovation capabilities partly stems from customer requirements. Businesses increasingly expect channel partners to "bring innovation to them," Sovie explained. Indeed, growth through innovation ranked as the top business objective among the partners surveyed, with 45% of partners seeking to innovate their products and services.

The innovation customers expect is tied to industries and business outcomes. "[Partners] need to develop deeper industry and/or functional expertise to really drive innovation," Sovie said.

"If you can't bring that level of industry experience, you are at a disadvantage in the market," Heald, who co-authored the report, added.

Partners and their vendor partners must deliver metrics-based business outcomes with their industry-specific offerings, Sovie and Heald said. That requirement has prompted more customers to pursue outcome-based contracting, an approach that ties payments or future sales to meeting performance objectives. While this approach involves some risk, customers, vendors and channel partners are more open to this model, the executives said.

"The more customers demand a true solution versus just buying a product and being self-integrators, the more likely they are to ask for outcome-based models," Heald said.

Partners and vendors have become more confident with outcome-based arrangements as they gain experience with the model and differentiate themselves through their industry knowledge and relevance, he added.