Icebergs and ecosystems

Channel ecology and channel ecosystems have been transformed into critical components of vendor and channel partner strategy. Channel ecology is the study of the business relationships and the economic, technical and managerial interactions between channel businesses (vendors and partners) and their

business environments. It is the relationships between individual channel businesses, and between channel business and their shared business environment. A channel ecosystem is a localized group of interdependent channel businesses and the linkages with the business environment that they operate in.

“Old school”, one-to-one, title-taking relationships between vendors and partners based on an aging “master/slave” model are disappearing. Replacing them are “new school”, one-to-many, influence-based relationships between vendors, partners and other members of specialized channel ecosystems.

Icebergs and ecosystems

Old School channel relationships were established in the three periods prior to the Post Internet Channel Explosion of the 2000s. During the 70s, 80s and even the 90s, most vendor/partner relationships were single linkage in nature.

What this means is that most hardware, software and telecommunications vendors saw partners in a master/slave role (with the vendor being the master). Vendors were authoritarian and controlling in nature. Contracts were formal and exclusive in nature. Partners were encouraged to be “vendor exclusive” or “vendor-dedicated”. Loyalty was a key concept . . . . partners that worked with another vendor were seen as, and treated as, disloyal soldiers in a war. The vendor/partner relationships tended to be conflict-laden with the Direct Salesforce of the vendors being the biggest driver of conflict.

Enter the Iceberg and the New School

The Post Internet Channel Explosion changed everything in the channel ecosystems and the ecology of the channel. Traditional “Old School” vendors and partners continued to see the single linkage relationships of the past, but like an iceberg, what was really going on was not so obvious. In addition to their vendors, New School partners were working with other partners (some of them competitors), consultants distributors, telcos, ISVs, integrators, service providers and service organizations.

New School partners were engaged in big complex solutions. They were working with multiple solution providers. The relationships were held together not by 45 page agreements, but by financial self interest. The teams or clusters were focused on delivering a complete solution to the customer. The bigger and more complex the solution, the more complex the network or cluster that was brought together to do the job. This was not a world of zero sum, but rather one of win/win, cooperation and influence, rather than conflict and control.

The emerging New School vendor model features involvement, in different ways, with hundreds of participants in a myriad of ecosystems; vendors are involved in inbound only relationships, outbound only relationships, reciprocal relationships. The philosophy is not simply about winning or losing, it is about positioning oneself to have the best chance to win given the existence of a host of uncontrollable variables.

Bruce R. Stuart, CMC is the President of ChannelCorp Management Consultants Inc. ChannelCorp has provided channel education and consulting services to hundreds of vendor and partner personnel around the world.This article has been excerpted from the May/June issue of ChannelCorp Intelligence, a regular newsletter on channel issues and insights available by request from channelcorp@telus.net.

For the full article Channel ecology and channel ecosystems (part 1), e-mail channelcorp2@telus.net.

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