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2021 & beyond: Where are partnership, channels and ecosystems heading?

The pandemic affected everyone and everything – businesses and people alike. But it has remarkably accelerated growth of ecosystem businesses, a shift that underscores how businesses are changing in a way they haven’t in the past 30-40 years.

Many trends that, in a pre-pandemic era, were anticipated to affect partnerships, ecosystems and tech businesses at large have not only expedited but converged and amplified due to the pandemic. Transition to the subscription business model, growth of marketplaces, increasing importance of non-transacting and non-traditional partners and the subsequent need to scale ecosystems 10X, these are just some of such trends, Jay McBain, Principal Analyst, Channel Partnerships & Alliances at Forrester, told Partner Insight in Episode 26 of our show.

As a result, customer experience, partner experience, employee experience – all of these are changing, converging and amplifying” – Jay McBain, Principal Analyst, Forrester

With that in mind, here are the 3 trends you need to look out for:

1. Shift in customer ownership. Can you own the customers in the new digital economy? No one can, not anymore.

2. Transition to subscription model that changes partner economics. No doubt you have noticed the tectonic shift to the subscription-based model. But have you noticed that when it comes to partners everyone is talking about the Multiplier?

3. Ecosystem boom: A consequence of the previous two trends, is the rise of an all-inclusive partner model or ‘ecosystem’. These “ecosystems” weave together various partners in the journey to provide continuous value to customers, whether it’s B2B or B2C.

Let’s take a closer look at these trends and focus on what to expect in the coming years.


What is more counterintuitive to the traditional business model? Digitalization has fundamentally transformed customer experience, and now there is no partner or vendor who ‘’owns a customer”. The role of partners is now more fluid and comprehensive at the same time.

Thanks to digitalisation there is no single throat to choke. There is no trusted advisor, no single partner that holds the whole journey from problem to solution to renewal

Customers are now looking at upwards of 5 different partners just to get through that digital journey to make vendor selection. So as a vendor or distributor, you will have to look at the world more widely, McBain said.


What Dell and Cisco have done recently that Amazon, Microsoft and many others have been doing since time immemorial? Companies large and small are now moving to subscription en masse - the recurring revenue model.

“We expect hundreds of vendors to make this declaration early in 2021, that the entire industry is moving into a recurring model.”

McBain says that while investors are all for this transition, some customers are warming up to it, the channel partners are slow on the uptake since this move to subscription doesn’t match their traditional business models.

McBain pointed out that in the subscription model the initial transaction is losing importance to the partners. The typical transaction of customer purchasing goods and service could be just the first 30 days, and it may or may not renew after some time.

As a result, the well-known partner incentive, a percentage of the initial transaction, is going away. Instead what becomes more important for vendors and hence partners, is influencing buyers across their entire journey. From attracting customer to retention to renewals, upsell and cross sell and so on, in perpetually. Because the subscription journey never ends.

““This is why the 20% initial opportunity revenue has turned to a much larger number – the multiplier”.

It is indeed time to introduce The Multiplier. What is it? Let’s take an example: Microsoft sells its product and services to customers, but it doesn’t do it alone. It includes a whole host of services that its partners provide. Everything from installation, implementation, integration, security, compliance, continuity, IoT, AI, automation, design. These service providers can make around 5 times the revenue Microsoft makes. This means, for every $1 of revenue for Microsoft, its partner ecosystem has a proportion of $5 up for grab. This is The Multiplier.

It will become crucial for a partner to get entrenched in these customer journeys early on to ensure that the partner continues to reap the benefits of the multiplier recurrently, McBain told Partner Insight.


An ecosystem comprises many services, products and participants who come together to maximize customer experience. Think of Apple, Salesforce, Amazon, Alibaba - these are all ecosystems that bring together different partners to improve customer journeys at every touch point. Ecosystems improve efficiencies in value chain, customer experience, and innovation. With an ecosystem, customers, whether it's B2B or B2C, have a one stop shop for their specific needs.

McBain explains that while ecosystems have roots in the channel, there is a key difference in how they are measured. Channel is focused on driving revenue and profit, higher customer satisfaction. On the other hand, an ecosystem measures value creation for the customer, network effects from including additional services and the ability to tap into other customer conversations and grow in different segments (industries, geographies, buyer personas, sectors, product areas).

“Today, we have 175,000 software companies, in 10 years, we'll have a million. And the reason that 825,000 new companies are going to be built inside ecosystems.” Jay McBain

So, how do companies progress from channels to ecosystems in the next few years? Jay said:

““Ecosystems represent a lot of moving parts. To create a winning ecosystem you need to be able to map it, build it, build meaningful relationships, build onboarding necessary, the motivation, the loyalty to succeed in building a workable co-selling and co-marketing model.”

To scale the existing channel into an ecosystem, there's no way you can hire 10 times the people, spend 10 times more in technology, build 10 times more programs. You just got to refocus and rethink on how this is all going to work at a just a different level of scale than we've ever been on.

What is emerging as a crucial element of the Ecosystem model is the focus on Ecosystem management and Partner Experience.

“This was probably one of the major areas that were disrupted during a pandemic. Companies were investing in technology and people and processes and programs to improve the partner experience. And they got the fact that a good partner experience is a direct correlation to great customer experience.”

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