Forrester’s principal analyst, Jay McBain believes only a third of money in the tech industry will flow through the channel by the end of the decade.
He warned that technology companies the rise in marketplaces and direct selling meant less would flow through the channel. McBain said that buyers of technology were changing, telling partners that future buyers “look a lot like consumers” and that it is no longer just those involved in IT that companies are selling to, with marketing and sales now having a greater influence on the market.
McBain said that there will still be a huge opportunity for partners this decade, with worldwide technology spend expected to reach $7 trillion.
McBain said that there was a demographic shift happening for the first time in a long time. The majority of buyers are going to be millennials within four years.
“On top of that there’s a different journey, psychology and behaviour they’re on today, driven by the pandemic. Its digital or digital only. If I take you back to the time you bought a car and I walked through every moment you had from the time you thought you needed a new car to when you set foot in the dealership, on average there are 28 of them.
“You watched a video, you read a magazine, you spoke to your neighbour, you went on social media. There’s companies that are tracing all those steps. But the point is that as technology buying becomes more consumer-like, they are also going through those 28 moments.”
The channel will get a new opportunity as Google and Apple kill off the cookie and bring to an end the end of targeting, the end of tracing, the end of the internet having you as a product.
“Two companies that own 99 per cent of mobile share and 86 percent of desktop browsing share have decided to stop tracking you between your 28 moments so that BMW or Toyota or whoever can’t watch you bounce around before you hit the dealership. Now, the conversation completely changes. CMO’s that I talk to today who have invested so heavily in the last decade of marketing in this type of tech stack, now have a new budget, because all of the things they’ve invested in by watching you on the internet has now been neutered”, McBain said.
He said that most CEOs think their current business model will be unrecognisable in five years and if they were a public company they’re getting pressure externally, if they’re a private company they’re getting pressure from the board, to think about subscription and consumption models, to think about recurring revenue.
“This is coming from the top down now, and the number one reason they said for this was ecosystems – that in the next decade whatever business or industry I’m in, I can’t do it alone. I have to build a team and a set of partnerships that are going to take me forward.”
He warned that everyone is going all-in on subscription and consumption, which changes a lot of the focus of the customer journey.
“ Getting the customer to the dance, getting them up on the dancefloor, and now in a subscription economy, getting them dancing forever. These are three unique motions that every company is starting to think about investing in, and the transaction itself – getting the customer on the dancefloor – is only the first 30 days”, McBain said.
He said that the industry was moving towards an embedded world, where the Channel were not product sales companies anymore.
“Ten years ago, IBM tried to create a product you could buy – Watson. ‘It cures cancer, it predicts nuclear explosions, it predicts the weather, it’s a product, go and buy it’.
“Ten years later and a bunch of hospitals are pushing Watson out because it didn’t fulfil its promises. If IBM ten years ago went and sold it to Salesforce, Salesforce wouldn’t have to build Einstein and its in all of our products.
“Watson would be in your Tesla, inside the software we use, inside our toothbrush. That’s the embedded world that we’re going into and that most companies don’t get, because they’re still product sales companies.”
He also warned that resell was going the way of the dodo.
