The Channel's Shift to Partner-Led With AI

Raegan Wilson describes her experience with the evolution of the channel over more than two decades, starting from the era of "Box Builders". Back then, partners were primarily value-added resellers who would build computers and servers by assembling various components. Raegan recalls visiting partner offices and seeing their framed certifications and branded swag from different vendors. This was when vendors were in the driver's seat, pulling partners along, and partners were seen as an extension of the vendor’s go-to-market efforts. The market has changed dramatically since then. Partners who failed to adapt to new technologies, like wireless networking, often went out of business. This shift highlights a critical lesson in the channel's history: partners must continuously morph their business models to survive and thrive. This same pressure appeared with the change to cloud services and is now a factor with AI. The most significant change Raegan notes is the shift in power, with partners now driving the solution for the end customer. Instead of vendors leading, the partner-led model puts the partner in the proverbial driver's seat, loading up their solution with vendors that fit the tech stack. This fundamental shift requires brands to change how they engage with their channel, acknowledging the partner's central role in the solution delivery.

The modern channel is more complex than ever, moving beyond traditional reseller models to include various services, solutions, and integrations. The days of simply building a box are replaced by a focus on value-added services that solve complex customer problems. Raegan points out that this evolution has led to a higher barrier to entry for entrepreneurs in this space, as the risks and necessary security checks are much steeper than they were in the past. She also notes a trend towards consolidation, with larger organizations growing even bigger as they deliver value across the entire ecosystem. This environment demands that brands provide a clear value proposition to partners, making it easy for them to understand where they fit in, how they can make money, and where the opportunities are. The success of a partner-led strategy depends on the brand's ability to communicate value and follow the partner's go-to-market strategy rather than imposing its own.

Sugata and Raegan also discuss the differing maturity levels between IT and traditional manufacturing industries. While newer IT companies quickly adopt ecosystem strategies because they don't have legacy tech debt, many conventional manufacturers struggle with antiquated systems and processes. This often makes it harder for them to get modernized and optimized. The interview highlights that even well-established enterprise companies, which one might expect to be well-oiled machines, often face significant challenges in implementing simple changes. Raegan reassures that this struggle is common and not unique to a single large player. The conversation also touches on the convergence of IT and OT (operational technology), particularly in manufacturing. It introduces new challenges like cybersecurity and data centralization that require a more comprehensive, leadership-level approach to automation. This complexity underscores the need for expert guidance in navigating the modern ecosystem.

The discussion then pivots to the role of technology in the new partner-led reality, focusing on marketplaces as a critical go-to-market channel. Raegan explains that once seen as just a place to list an app, marketplaces have evolved into a channel with significant velocity. Partners are now instrumental in helping end customers manage their marketplace spend and private offers, making it easier for them to acquire technology and access budgets they might not have known were available. The challenge for vendors is understanding their partners' readiness and maturity level before jumping into marketplaces. A brand might be four steps behind a competitor and should therefore consider other routes to market where they have higher partner engagement or readiness. Prioritizing a marketplace strategy should be based on looking at internal capabilities and resources, not just what a competitor does. It is also essential for brands to understand their position in the tech stack—are they the "burger" or the "ketchup"? Understanding where a solution fits the customer's overall stack helps a vendor identify the right partners and opportunities for an attach play.

Raegan emphasizes that while finding complementary partners in the new ecosystem has become easier, the sheer volume of vendors also makes it harder to rise above the noise. A strong story and clear value proposition are essential to capture a partner’s attention. This is where the strategic use of AI comes into play. AI can be leveraged to find the right partners by analyzing data and creating detailed profiles. Using the right prompts, brands can get a list of potential partners, build value propositions, and tailor their recruitment messaging. This automation helps the recruitment process, but Raegan stresses that the following steps must also be automated to handle the influx of prospective partners. She also notes that the methods for reaching partners have changed, with phone calls being less effective and LinkedIn and email becoming more critical.

Looking at the technology platforms themselves, Raegan acknowledges that they have made significant strides over the past decade. However, she notes that the channel has always been a bit behind in adopting technology and that vendors often need to understand their customers' specific needs better. Many companies are tempted to put the platform first, but Raegan argues that a solid foundation of people, processes, and programs is necessary to leverage technology successfully. Without this foundation, automating a flawed process can lead to problems. Raegan’s five P’s—People, Process, Programs, Partners, and Platform—provide a clear roadmap for success.

Raegan highlights key areas where AI is already significantly impacting partner-led strategies, starting with content. She calls content the "Achilles heel of channel" and explains that Gen AI is a game-changer for content creation and partnerization. One of the most powerful use cases is localization and translation. In the past, translating content into multiple languages was a costly and time-consuming process. Still, Gen AI has made it faster and more cost-effective, allowing companies to meet their global partners in their local language. Another key use case is making content more useful for partners. Gen AI can take internally facing training materials and shorten them to be more concise and practical for partners with limited time. The content can be tailored to acknowledge the partner’s expertise, a key element often overlooked in traditional training materials.

Beyond content, Raegan sees a massive opportunity for internal-facing AI agents to improve efficiency for channel account managers. These agents can help with various tasks, from aligning partners with specific opportunities to tracking compliance and identifying underperforming partners. For example, an internal agent can look across a CRM and other data sets to find the best partner in a region, check their performance, and even draft an email about relevant promotions. This is much faster than a human manually digging for this information. The ultimate goal is for these agents to become more partner-facing, providing real-time insights to partners about promotions, new products, and customer renewal opportunities across their entire vendor ecosystem. However, Raegan notes that this will require better data governance, as the channel has long struggled with data quality.

Raegan also discusses the evolution of partner compensation, which has shifted away from being tied to partner types or tiers. Instead, some brands reward partners based on the number of customers they touch rather than the size of a single deal. This incentivizes a broader reach and rewards behavior that aligns with the brand's goals. This change reflects that many partners, like Raegan's own firm, prefer to be compensated for their services and expertise rather than through vendor referral fees or incentives. This allows them to maintain a trusted advisor relationship with their customers. The conversation concludes with a forward-looking view, where AI's most valuable application will help partners navigate the complex multi-vendor universe, making their jobs easier and their businesses more successful.