With the channel now considering collaboration as a means of survival, ARN asks Insentra managing director, Ronnie Altit, why teaming up still requires trust.
“Historically, the channel has screwed over so many people that by default, the industry is gun shy.”
While not the expected words of a master partner collaborator in Altit, but in drawing on over 20 years of industry experience, the channel veteran accepts that such reservations remain commonplace within Australia.
If the ecosystem indulged in assessing the most important expression in the public sphere during the past twelve months, no doubt collaboration would be crowned Word of the Year, such is the market’s insistence on shedding its separatist nature.
Despite countless marketing campaigns and sponsored vendor research however, certain resellers remain grounded by a deep distrust of coopetition, yet another newfangled term which has infiltrated the channel lexicon.
“Resellers have been burned in the past and it takes a long time to recover,” acknowledged Altit, who founded Insentra in March 2010, as a collaborative IT services partner transacting exclusively through the channel.
“It’s a big challenge and comes back to that fundamental question of trust.”
In glancing through the Harvard Business Review seeking business inspiration, leaders of organisations are acknowledging that even the best individual efforts can’t stack up against today’s complex and interconnected problems.
For ‘Collaboration Is the New Competition’ and in 2016, building allies, not adversaries, is the modus operandi.
But such glorious business insight turns into worthless drivel upon the realisation that harsh realities remain in the local channel – this isn’t the U.S. of A., this is real-world Australia.
“Resellers are against partner to partner because there is an inherent threat that they will lose business,” Altit admitted.
“If you’re a networking house and you bring in a partner to help implement a Microsoft project, and the customer says to that partner; ‘great job do you also provide networking as well?’ That’s when you’re in for a huge trust discussion.”
Alluding to the belief that past experiences can dictate future behaviour, Altit – who spent nearly five years building out Dimension Data’s datacentre practice – recognises that trust stands tall as the key marker for partners open to combining forces where appropriate.
“But will the partner you’ve brought in say ‘yes we do networking let’s talk’ or will they say ‘yes we do but we’re working on behalf of another partner and we therefore decline’,” Altit questioned.
“Some sales people will snap up that type of opportunity and it still happens today because not everyone operates off the same moral compass in the channel.”
Even for businesses operating in partner to partner type scenarios, Altit accepts the salient fact that traditionally, this isn’t the core business of resellers, who are trained to head into the market and sell directly.
“Partner to partner isn’t natural and while most players in the channel are trustworthy, some unfortunately aren’t which is why reluctancy remains,” he observed.
As one of the world’s most foremost industrialists, Henry Ford once preached that “if everyone is moving forward together, then success takes care of itself.”
But while the pursuit of partner profitability remains unrelenting, it’s a natural tendency for people to seek control during a collaborative engagement, given the alternative of being controlled.
“Who owns the account, the transaction and the sales cycle? These are key questions to answer when working together,” Altit advised. “In our business the answer is never us because we have a fundamental dependency on the partner to deliver what they say they can do.
“Our model allows resellers to manage customer relationships, transactions and pricing. We work in collaboration with them but it’s their client so they call the shots.
“But even control comes back to trust. If a reseller doesn’t trust us, they won’t provide customer details. We’ve worked with partners who didn’t want to share customer information, they hold this information tightly to their chests.”
As digital technology advancements trigger changing business demands and buying patterns, new expectations must now be met, creating a new benchmark for customer experiences.
Whether it be Cloud, big data, analytics or cognitive, the capabilities of the channel are being pushed to breaking point, heightening the need to compete and revisit previous processes around collaboration.
“Yes it’s changing,” nodded Altit, before pausing. “But it’s not changing at the core of what people believe, it’s changing because people realise they can’t be successful otherwise.
“The market has moved away from the old lucrative models and it’s now on a drip which provides less funds to invest in capabilities. Not all resellers have the cash flow so they are forced to either walk away from an opportunity or to partner, and we provide that non-competitive model.”
Built out of ongoing frustrations when resourcing the delivering of deals already won, Insentra’s exclusive partner model of engagement focuses around providing professional and managed services, including project planning and management in partnership with the channel.
Through experiencing strong growth during his role as General Manager of Datacentre Solutions at Dimension Data, Altit ran into two problems on a frequent basis, sparking a desire to address an ongoing industry issue.
“Firstly, we struggled to find sufficient pre-sales resources as and when the customer wanted to talk about a solution,” recalled Altit, who oversees more than 160 partners on Insentra’s books.
“Secondly, assuming we had these resources and won the deal, we then didn’t have the right person, with the right skills, at the right time and struggled to resource the delivery of the service we’d just sold.”
Presented with a challenge regularly played out in the industry, Altit was faced with four options – contract, vendor, hire or partner.
“Contractors are generally thin on the ground but if you go to the customer and say you can deliver all of this work, and then at the last minute call in the vendor, it’s very difficult to maintain,” he added.
“With these options unavailable it raised the prospect of hiring new staff to cope with demand.
“Yet you don’t hire unless you have a good book of work and a strong pipeline, and it usually takes as long as 4-6 weeks to onboard a new staff member. So the last option was to partner with another company, hence Insentra.”
As a 100 percent channel focused organisation, the Sydney-based business only transacts with the end-user via an intermediary, adhering to the reseller’s ideal engagement requirements.
“Even if we encounter opportunities within a deal, we will bring them back to the partner so they can decide the next steps, we operate with total transparency,” Altit added.
“We also made a decision to not sell anything competitive to the channel, so we don’t sell hardware or software. We stay away from anything that the channel can sell themselves.”
But isn’t it unusual for a top award-winning Microsoft, Citrix, Symantec or Veritas partner to sell no licences?
“Selling hardware and software is what the channel do, it’s their bread and butter and we’re happy for them to have that role because we’re a services focused business,” Altit reaffirmed.
As another point of difference, Altit said the business provides pre-sales resources to the channel at “no charge”, based on the agreement that if the deal goes ahead, Insentra will be the partner tasked with the delivery.
But despite creating a unique business model, that continues to gain traction across Australia, Altit accepts that concern remains among certain resellers as to the motives of company built entirely around collaboration.
“Partners still ask, ‘when are you going to flick your model?’ because some believe we will eventually switch focus and sell directly,” he acknowledged. “Even with a 100 percent channel-based model, certain partners still remain fearful as to how long that might last.
“But over time resellers have started to trust that we’re not going to steal their clients because if we do it once, that’s the end of our business.”
As the barriers to trust lower, and resellers respond to new ways of doing business, Insentra has expanded its capabilities to tackle other problems surfacing across the industry.
In attracting the interest of vendors eager to introduce new products and services to the market, Insentra now provides a bridge between old and new, ensuring partners can adopt new technologies in a manner that is financially and strategically viable.
“It’s a common theme,” Altit observed. “A vendor introduces a new product but resellers can’t invest in training because they have no pipeline.
“So the vendor spends too long convincing the channel to invest, and perhaps they throw in a few attractive deals and slowly the technology is adopted. Whereas now the vendor invests in Insentra training which means we can immediately deliver value to partners.”
But as Altit explains, that’s as far as the relationship goes.
“Insentra trained and installed the first 25 net backup appliance deals in the country but now we do little work in this field because the channel is equipped and can do it themselves,” he said. “We fill a gap and then we move on.”
Moving on Altit and his team are doing, with Insentra expanding into the UK and USA, replicating the company’s business model to larger markets across the world.
With five staff already on the ground in the UK, and the USA soon to follow, Altit said appetite for collaboration remains healthy at a global level, validating the belief that the channel is warming to the idea of sharing resources.
“If we didn’t believe in our model, now would be the perfect time to change it,” Altit admitted. “But we 100 percent believe in our approach and the model is working outside of Australia, as we leverage our vendor relationships to enter new markets.”
Amidst global expansion and a growing ecosystem of partners, Insentra is living proof that the channel can change its spots, as Altit continues to educate on the striking difference between collaboration and collusion.