Channels of the Future Report

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“Channels Channels of the Future Future” Improving Channel Productivity Through the Adoption of Next Generation Tools

The Channels of the Future subscription service is an on on-going, internet-based, based, primary research project that measures key distribution success factors and channel adoption of disruptive electronic tools and product packaging (like SaaS) over time.

There are two separate research initiatives that provide clients with data . Technology Vendors complete an extensive questionnaire about their current channel activities and plans, especially their use of social media tools with channel partners. North American Resellers receive shorter short but more frequent electronic surveys to document changing preferences and evaluate vendor channel program performance.

In the Report Vendor Social Media Programs Snapshot (page 2) Reseller #3 Using Web 2.o Tools to Reach Customers (page 16) Reseller#2 Role of VARs in an SaaS World (page 22) Reseller#1 Vendor Marketing Programs and Social Media (page 29)

For a “Channels of the Future” briefing: executivebriefing@gilwellgroup.com or 925-855-0678 925

Channels of the Future Research

Channels of the Future (COTF)

IT Vendor Channel Programs Social Media Snapshot February, 2009 For more information Mike Dubrall http://www.linkedin.com/in/mikedubrall or Channels of the Future Community www.gilwellgroup.xeequa.com © 2009 Gilwell Group, LLC

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Observations from the data • There are differences in social media strategies, depending on the size of the IT vendor. Marketing Groups, not Channel organizations, are generally responsible for social media initiatives – Smaller IT vendors have started using social media out of necessity.

These tools are inexpensive and sometimes very powerful – Mid-size vendors do not understand how these tools can be linked to the achievement of key objectives and are shunning them – Large vendors were the first movers . They have the resources and strategies to take full advantage of social media.

There is a general description of social media and demographics of the survey respondents at the end of the slide deck.

© 2009 Gilwell Group, LLC

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Observations from the data • Vendor salespeople are already using some social media tools to communicate with resellers – and find sales opportunities • There are many social media tools for communication, sales productivity improvement, networking, and product training that channel marketing managers have not yet incorporated into channel programs – Failure to see the business benefits cause some channel managers to dismiss social media – The market is changing so fast that channel managers are not seeing all the social media tools that are available – Social media tools take resources and time to fully implement. And they don’t always work as well as expected.

– Vendor management (and channel marketing) is discouraging use of new tools for security, budget, and “resistance to change” reasons. © 2009 Gilwell Group, LLC

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Observations from the data • IT Vendors are ahead of channel partners in using social media tools to communicate with customers – Channel partners are looking for leadership and training – Channel Marketing Programs should be updated

• Many channel partners are experimenting with social media tools, but often, resellers don’t yet see the business benefits – Many resellers have not yet followed their customers on-line and still rely on traditional face-to-face sales processes – There are few clear social media tool leaders and resellers refuse to use different tools from multiple vendors presented in an ad hoc manner – Some vendors are developing proprietary (closed) versions of public social media tools which resellers will probably resist

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Channels of the Future Research

Describe your company’s social media strategy Social Media Strategy

Ad Hoc None Proactive

Most social media initiatives are controlled by corporate marketing and usually focus on advertising/public relations

5

Does your company have an internal wiki where employees can share information?

Internal Wiki

Don’t Know

No

Yes

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Channel manager use of public wikis for information exchange Are there Wikipedia entries about your company or its products?

Wikipedia Entry

Does your company have a process for reviewing or approving information posted on public wikis?

Company Policy for Public Wikipedia-type sites Yes No

Yes

Don't Know

None Don't Know

Many channel managers “Don’t Know” how their products and companies are being portrayed on-line.

7

Have you integrated any Web 2.0 Sites into your partner portal or community?

Don’t Know

Yes

No

Facebook, SlideShare, Digg, Delicious, Ning, Xeequa

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Webinar usage in channel marketing 16 14 12 10 8 6 4 2 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

Webinars are common. So common that resellers are flooded with invitations. Many invitations end up in spam folders.

9

Channel Marketing use of mass emails with attachments 10 9 8 7 6 5 4 3 2 1 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

The limitations of sending mass emails with attachments is understood by most channel marketing groups.

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Reseller/Partner Portal usage 12 10 8 6 4 2 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

A few vendors have integrated on-line communities into their partner portals.

11

Use of on-line training with channel partners 10 9 8 7 6 5 4 3 2 1 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

On-line training of resellers is common, but incorporating training programs with social media tools like YouTube and LinkedIn is not common.

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RSS feeds from vendors to channel partners 8 7 6 5 4 3 2 1 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

Really Simple Syndication (RSS) alerts people when changes are made, like an update to a blog or website. Some browser limitations complicate their usage.

13

Using blogs to communicate with channel partners and end users 9 8 7 6 5 4 3 2 1 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

Many companies and individuals experimented with blogging.

In some areas, micro blogging (Twitter) is more popular today.

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Using Video On Demand (VOD) with channel partners 14 12 10 8 6 4 2 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

Sites like YouTube are popular with partner managers, but sometimes their capabilities are not recognized by training or product marketing groups.

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How many videos has your group put onto YouTube?

Videos on YouTube Don't Know >100 11-100 <10 Zero 0

1

2

3

4

5

6

7

8

9

Common â&#x20AC;&#x153;sanctionedâ&#x20AC;? videos include Product Information, Sales Training, Customer References, and Corporate Information. There are also thousands of unauthorized videos posted.

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Marketing program use of SMS texting to communicate with the channel 18 16 14 12 10 8 6 4 2 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

Most reseller sales reps use Blackberries or similar devices, but many vendors send information via regular email, often with attachments.

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Wikis usage by channel marketing to share information with resellers 16 14 12 10 8 6 4 2 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

While many people talk about wikis and understand the benefits of using them, they are not common in partner portals.

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Channels of the Future Research

Social Networking 8 7 6 5 4 3 2 1 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

Many channel managers use LinkedIn and Facebook and there are thousand of IT product-related groups on these sites, but little corporate support.

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Internet advertising with resellers 12 10 8 6 4 2 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

IT vendors are very active with on-line advertising platforms like Google, but few support reseller use of new advertising tools. 20

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Channels of the Future Research

Use of on-line communities with resellers 10 9 8 7 6 5 4 3 2 1 0 Not Being Used At All

Starting To Evaluate

Use in a Few We use this, but We do this and Places there are there are no problems problems

â&#x20AC;&#x153;On-line communitiesâ&#x20AC;? cover a wide range of applications.

So far, most on-line communities focus on technical issues.

21

On a 1-10 scale, how active are you personally on the following social media sites?

7 6 5 4 3 2

Vendors

1

Partners

0

IT vendor employees are more active on-line. (Partners were 22 asked this same question in a monthly survey.)

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Channels of the Future Research

Vendors, how would you describe your reseller’s use of the following?

Reseller usage 1-10 Internet Advertising Second Life Social Networking On-line demos Electronic Forums Wikis eNewsletters VOD Blogs 0

2

4

6

8

10

IT vendor channel managers have an accurate picture of what resellers are doing today – but there are few discussions about what resellers should be doing in the “near” future.

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Regarding Social Media, What’s Holding You Back?

No Budget Internal resistance to change Takes too much time No agreement on prioritization No demand from resellers We don't understand how this improves productivity 0

2

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6

8

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Channels of the Future Research

COTF Survey â&#x20AC;&#x201C; Respondent Information Company Revenue

<$25 m $26-100m $101 - 500m $501m-$1B >$1B

87 full or partial surveys

Product Mix Broad Line SaaS Desktop Communications

27

Respondent Revenue by Channel % of Revenue Web Sales Retail OEM/Alliance Telesales % of Revenue Integrators Solution Providers Direct Sales 0

10

20

30

40

50

28

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Channels of the Future Research

Respondent Market Focus Target Customer

SoHo SMB Large Acct Enterprise Acct Many

Overall importance of SMB market to company growth = 7.24/10

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How the Market Views Respondent Company Market Position

Dominant Supplier A Lead Supplier New Player

30

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Channels of the Future Research

Resellers Using Web 2.0 Tools to Reach Customers Channels of the Future Research Service

Reseller Survey 3/3

May 2009

…………………………………..

General Observations •

•

•

• •

• • • •

•

•

Vendor on-line program offerings are not keeping up with reseller sales requirements. Outdated reseller websites, lack of access to on-line communities, and continued reliance on traditional marketing methods like webinars and mass emails are impacting the health of reseller businesses.

Most resellers are not capable of evaluating the myriad social media options by themselves. Vendor leadership and training is going to be required to make resellers more social media savvy – like their customers.

Reseller executives are aging, yet they are actively experimenting with some social media tools for business and pleasure. It’s is a myth that social media users are young. (70% of this group is more than 40 years old.)

Resellers that report revenue growth are significantly more active with social media than resellers that report revenue declines or no growth. (This is a consistent finding.)

The most common social media sites used by resellers are business networking sites like LinkedIn and Plaxo. These sites are used to find prospects (suspects), network vendors and other resellers, and find useful sales information (often posted by vendors).

Many resellers form their own groups on Business Networking sites and even more are involved with vendor groups.

Scores are lower than in January or Feb, possibly because reseller respondents are working through the economic downturn.

Twitter is the fastest growing social media site among resellers, possible because vendors are experimenting with Twitter as a communication tool for the channel.

Reseller rating of the importance of traditional channel marketing programs in supporting their sales efforts (like partner portals, webinars, mass emails) are lower than three months ago as resellers adopt new communications methods to find information and sell products.

Resellers are thinking about on-line communities, wikis, blogs, on-line storefronts, and instant messaging. However, they don’t have the skills, time, or compelling customer interest to adopt these new tools on their own.

YouTube is catching on as a training tool and is increasingly effective for knowledge transfer.

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Channels of the Future Research Resellers were asked to rate the programs provided by their vendors, in terms of how well the program helped the reseller sell to customers. s. Growing resellers rated all programs higher than non-growing non resellers. (March 09)

Reseller Rating of Vendor Program Offerings Partner Portal

2.86

Webinars and web meetings

2.76

On-line line training

2.59

Mass emails with file attachments

2.36

Joint Business Planning

2.27

Electronic Newsletters

2.21

On-line line forums

2.18

CRM/SFA Tools

1.80

1=Negative impact on our ability to sell 2=No impact on our ability to sell 3= Modestly improves our ability to sell 4=Significantly improves our ability to sell

How Many Customers Do You Have?

H

Reseller Customers

Copyright, 2009 Gilwell Group, LLC

The percentage of active customers continues to hover around 75%, meaning that 25% of reseller customers purchased something more than six months ago and are not active currently. Social media allows resellers to stay tay in touch with these inactive customers at a fraction of the cost. More important, if these inactive customers join an active on-line line community they might be encouraged to purchase new products or services by other members of the community.

Confidential

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Channels of the Future Research Participants (reseller employees) were asked to describe their personal internet activity. Resellers are generally less active online than vendor-employed channel managers. Growing resellers are more active in all areas than non-growing resellers. (May 09)

How Resellers Describe Their Personal Participation/Activity Level With Web 2.0 Sites (1=no participation and 10=daily visits) Non-growing Resellers

Growing Resellers

All Resellers

Business Networking sites like LinkedIn

4.64

6.63

5.81

Blogs about their products or services

3.27

4.13

3.78

Social Networking sites like Facebook

4.91

4.88

4.89

Video on Demand sites like YouTube

2.64

3.31

3.04

Wikipedia

3.36

2.56

2.89

Twitter

2.00

3.56

2.93

On-line Community

3.10

3.13

3.12

How would you describe your company’s use of the following tools to support your sales efforts, where 0 means that are not being used at all and 10 means they are used a lot by your company.

Social/Business Networking (Like LinkedIn or Plaxo) 0…..1…..2…..3…..4…..5…..6…..7…..8…..9…..10

4.3 Resellers are setting up groups, joining vendor groups, and looking for prospects (suspects) on a variety of business networking sites. There are tens of thousands of reseller employees on LinkedIn, and hundreds of groups that resellers might join to gain information or to network.

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Channels of the Future Research Participants were asked to describe their company’s use of social media tools with end- user customers.

Don’t use them and know little about them

Starting to look at them

Have tried them but are not using them a lot

Are starting to use them and they seem promising

Already using them successfully

Blogs

30%

27%

13%

20%

10%

On-line storefronts

40%

20%

23%

10%

7%

Wikis

53%

30%

10%

0%

7%

Instant Messaging

23%

27%

33%

3%

13%

Internet Advertising

33%

13%

30%

10%

13%

Forums

37%

30%

17%

3%

10%

On-line Communities with end users

27%

37%

13%

10%

13%

How would you describe your company’s use of the following tools to support your sales efforts, where 0 means that are not being used at all and 10 means they are used a lot by your company.

File Sharing Sites (like SlideShare, Flickr, or Issuu) 0…..1…..2…..3…..4…..5…..6…..7…..8…..9…..10

1.9 File Sharing sites (like SlideShare, Flickr, Issuu, Podcast, Schribd, and many more) become more important as reseller use of social media sites increases. These sites make it easy to store important files and then easily link them to emails, communities, profiles, and web sites.

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Channels of the Future Research How would you describe your company’s use of the following tools to support your sales efforts, where 0 means that are not being used at all and 10 means they are used a lot by your company.

Video ideo on Demand Sites (like YouTube) 0…..1…..2…..3…..4…..5…..6…..7…..8…..9…..10

2.9 Resellers are following their vendors onto sites like YouTube and Yahoo Video where they can already find tens of thousands of videos posted by vendors. Some manufacturers have moved a significant amount of training to these sites, creating playlists of videos that hav have e to be completed by reseller sales people.

Videos Posted by Resellers on YouTube and Similar Sites More than 5 = 8% Less than 5 = 13%

None = 79%

Demographics of the resellers surveyed (on (on-line questionnaire) • •

•

There were 61 reseller surveys completed during March. Not all participants answered all questions.

The sample is mostly small resellers (under $10 million) that have been in business more than 10 years. Most sell primarily to SMB customers, although enterprise sales are also well represented by the larger resellers in the sample.

These resellers sellll to end users through a variety of activities: Direct Sales (65.7%), Telesales (14.12%), Web (8.58%), Other (11.60%).

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Channels of the Future Research •

• •

About 45% of the respondents reported year-to-year revenue growth. The other 55% reported flat revenue or even declines . (The percentage of resellers reporting growth has fallen in each of the past three surveys.)

Many different primary vendors were mentioned. Microsoft and Intel computers (various brands) were named most often.

Most respondents were more than 40 years old (70%). All had some experience with social media, but most in a personal or experimental manner.

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Channels of the Future Research

Role of VARs in an SaaS – HaaS World Channels of the Future Research Service

Reseller Survey 2/3

March, 2009

General Observations 1. On-line communities are common in the channel – in all shapes and guises. Early reseller attempts at using them with customers or vendors were often unsuccessful. However over 45% of channel partners are now using on-line communities successfully – or seriously considering them for introduction in the near future.

2. SaaS, HaaS, on-line storefronts, social media, and internet access have opened new markets for resellers. Over half of the channel partners in the survey consider their addressable market to be national or global, despite the limited size of their operations or their geographic location.

3. Most resellers have experience with on-line storefronts, but have generally had poor results. The traditional shopping cart experience is not good enough to meet the needs of end users nor resellers.

4. For many channel partners, their typical deal has changed over the past three years. In some markets, product price erosion is as high as 7.5%, but resellers compensate by selling more services.

5. Software as a Service (SaaS) is gaining popularity among resellers and more than 60% of them are already selling SaaS services or plan to in the near future. The biggest obstacle is customer understanding of SaaS benefits. Vendors have not adequately educated the market, and resellers don’t have the time or skills.

6. Hardware as a Service (Haas) is not an issue with most channel partners, who see financial and customer satisfaction benefits in selling and supporting products themselves.

7. Open Source products (like Google Apps) are making some inroads, but the majority of resellers know little about them or have no interest in providing them.

8. Across the board, growing resellers embrace new tools and utilize vendor programs more often and effectively than non-growing channel partners.

9. Resellers (especially growing resellers) regularly visit business networking sites like LinkedIn and often read blogs that pertain to their business or customers. They have much less experience with tools like YouTube, Facebook, and Twitter as business tools.

10. Despite a lot of hype and media coverage, Second Life is not frequently used by channel partners or vendors to communicate or market products/services.

For more information:

Mike Dubrall, Director, Channels of the Future Community miked@gilwellgroup.xeequa.com Copyright, 2009 Gilwell Group, LLC

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Channels of the Future Research

On-Line Activity Resellers were asked to rate the programs provided by their vendors, in terms of how well the program helped the reseller sell to customers. Growing resellers rated all programs higher than non-growing resellers.

Partner Portals get consistently high reseller ratings for value despite the common criticisms that the information is not always up-to-date and is sometimes difficult to find.

On-line forums are more popular for technical people, but marketing and even sales issues are slowly gaining favor.

Mass emails are losing favor as spam filters become more effective and customers turn to other sources for information (communities, web sites, twitter)

Reseller Rating of Vendor Program Offerings (#2) All Resellers Partner Portal

3.11

Webinars and web meetings

3.10

On-line training

2.96

On-line forums

2.97

Joint Business Planning

2.84

Mass emails with file attachments

2.81

1=Negative impact on our ability to sell 2=No impact on our ability to sell 3=Modestly improves our ability to sell 4=Significantly improves our ability to sell

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Channels of the Future Research Resellers were asked to rate their companyâ&#x20AC;&#x2122;s interest/involvement in using or deploying the following internet tools.

Have zero experience and know nothing about them

We tried them but had poor results

Are seriously considering them now

Starting to use them with promising results

Have been using them successfully

On-line storefronts for selling products to customers

16.7

44.4

22.2

0

16.7

Virtual communities to improve communications with end users

20.0

34.3

25.7

5.7

14.3

Resellers were asked about their addressable market.

Resellers are familiar with on-line storefronts but only the largest channel partners use them effectively.

On-line communities are newer and many reseller have experience with the communities of their vendors.

Many are now considering the establishment of communities for their own customers.

Sales Over the Internet We don't use the Internet effectively and most of our customers are local We use the Internet and sell to people all over the country We use the internet and sell to people all over the world

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Channels of the Future Research Reseller employees were asked to describe their personal internet activity.

Resellers are familiar with social media sites and visit them on a regular basis. Growing resellers are more active in all areas than non-growing resellers, especially on Social Networking sites and YouTube.

How Reseller Employees describe Their Personal Participation/Activity Level With Web 2.0 Sites (1=no participation and 10=daily visits) Survey #2 Non-growing Resellers

Growing Resellers

All Resellers

Business Networking sites like LinkedIn

3.65

3.67

3.66

Blogs about their products or services

3.06

4.00

3.43

Social Networking sites like Facebook

2.17

3.25

2.60

Video on Demand sites like YouTube

1.94

2.50

2.17

Second Life

1.11

1.25

1.17

Twitter

1.83

2.08

1.93

Resellers are generally less active online than vendor-employed channel managers, who spend more time on most social media sites than resellers.

SaaS, HaaS, Open Source Products/Services Resellers were asked about their involvement/experience selling SaaS products/services.

SaaS Products/Services Already selling successfully Will probably be selling soon/Just started selling Not at all interested in selling We know nothing about this 0

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Channels of the Future Research Reseller opinion on likelihood that more than 50% of revenue will come from SaaS/HaaS within the next five years? Their feelings are mixed, with a slight tendency for larger resellers to be optimistic about SaaS business opportunities.

Non-Growing Resellers = 4.81

Growing Resellers = 5.44

0…..1…..2…..3…..4…..5…..6…..7…..8…..9…..10 Not likely

Very likely

5.13 = average

Biggest Impediments to Selling SaaS/HaaS Customers are not comfortable with the concept Economics are not right for me Products aren't ready yet We don't understand them well enough

Resellers were asked about their involvement/experience selling HaaS and Source Products.

Open

HaaS Products/Services Already selling successfully Will probably be selling soon/Just started selling Not at all interested in selling We know nothing about this 0

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Channels of the Future Research HaaS is currently less interesting than SaaS because resellers see economic advantages in selling products to customers that may generate service or maintenance revenue.

Open Source Products Already selling successfully

Will probably be selling soon/Just started selling

Not at all interested in selling

We know nothing about this

0

2

4

6

8

10

12

14

Typical Sales Transactions

Typical Sales Transactions Over 12 Months Not a lot of changes Getting Smaller Getting Larger Don't Know Growing resellers had a higher percentage of “getting larger” and non-growing tended towards “getting smaller” or “no change.”

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Channels of the Future Research Resellers were asked if the average price that end-users pay for their products (services) has dropped (price erosion).

Average price erosion Yes, prices have dropped

43%

No, prices are steady

57%

7.5%

Growing resellers more often said “prices are steady.”

Demographics of the resellers surveyed (on-line questionnaire) • • • • • • • •

There were 79 reseller surveys completed by North American resellers. Not all participants answered all questions.

Most sell primarily to SMB customers.

The sample is mostly small resellers (under $10 million in annual revenue).

Almost all have been in business more than 10 years.

Many different primary vendors were mentioned. Microsoft and Intel computers (various brands) were named most often.

About 25% of the respondents reported year-to year revenue growth (lower than last survey).

The other 75% reported flat revenue or even declines .

Resellers represent a diverse blend of business models and sales capabilities. Most sell direct to customers (70%) but telesales activities and on-line storefronts are common .

Most respondents were more than 40 years old (76%). All had some experience with social media, but most in a personal or experimental manner.

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Channels of the Future Research

IT Vendor Marketing Programs and Social Media Channels of the Future Research Service

Reseller Survey 1/3

Jan , 2009

General Observations 11. The channels’ electronic landscape has become a cluttered wasteland of outdated information, bloated PDF datasheet directories, and orphaned websites.

12. Very few resellers consider their websites to be useful as a sales/marketing tool (4.08 rating out of 10). Only about 10% of resellers are using new capabilities like RSS, Wikis, and blogging in their web sites. Non-growing resellers are not using them at all.

13. Resellers want and need their vendors to help them market and sell on-line, not just sell face-toface. (They want/need leadership and program support with on-line Web 2.0 tools.)

14. Resellers need/want more of the basics: on-line “canned” product demonstrations, on-line storefronts, e-newsletters and the capability to use them more efficiently. They especially want help with their web sites.

15. For every active reseller customer (purchased in the past six months) there are two inactive customers (purchased more than six months ago). Growing resellers abandon inactive customers and acquire new customers significantly more often and quickly than non-growing resellers.

16. Fast growing resellers are more active in social media than non-growing resellers, especially on business networking sites like LinkedIn. 17. SFA/CRM tools are not being used except when pushed by vendors (only 22% use them). When used, they are generally not effective for resellers. They go through the motions but don’t see real benefits.

18. Current vendor offerings (portals, mass emails with attachments, webinars, forums) get mixed reactions as to their effectiveness.

19. Resellers do very little marketing. What they do is usually ad hoc.

20. Virtually all resellers have a high interest in receiving more information about available or potential “hosted, multi-vendor, social media marketing programs.”

21. Vendors are generally more active on the social web than resellers. Most IT vendors are developing social media strategies for end-user customers (bypassing resellers)

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Page 29

Channels of the Future Research

Resellers were asked to rate the programs provided by their vendors, in terms of how well the program helped the reseller sell to customers. Growing resellers rated all programs higher than non-growing resellers.

Reseller Rating of Vendor Program Offerings On-line training

3.10

Partner Portal

3.04

Webinars and web meetings

2.99

Joint Business Planning

2.99

Mass emails with file attachments

2.66

On-line forums

2.58

1=Negative impact on our ability to sell 2=No impact on our ability to sell 3= Modestly improves our ability to sell 4=Significantly improves our ability to sell

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Page 30

Channels of the Future Research Participants (reseller employees) were asked to describe their personal internet activity. Resellers are generally less active online than vendor-employed channel managers. Growing resellers are more active in all areas than non-growing resellers.

How Resellers Describe Their Personal Participation/Activity Level With Web 2.0 Sites (1=no participation and 10=daily visits) Non-growing Resellers

Growing Resellers

All Resellers

Business Networking sites like LinkedIn

2.67

4.50

3.89

Blogs about their products or services

2.55

4.08

3.60

Social Networking sites like Facebook

3.17

3.63

3.47

Video on Demand sites like YouTube

2.83

3.17

3.06

Second Life

1.00

1.88

1.61

Resellers were asked to describe their companyâ&#x20AC;&#x2122;s marketing activities. Most consider their website to be ineffective as a marketing tool. Few reseller websites have incorporated capabilities like RSS feeds, forums, and wikis. Reseller websites are usually static, not interactive.

Description of Reseller Marketing Activities We do ad hoc marketing, mostly funded by ourselves

37.5%

We have a consistent multi-vendor marketing program

14.0%

We do ad hoc marketing, mostly funded by vendors

11.0%

We do very little, if any, marketing

37.5%

Copyright, 2009 Gilwell Group, LLC

Confidential

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Channels of the Future Research Participants were asked about their interest in having vendors provide specific social media tools.

Reseller Interest In Having Vendors Provide The Following Social Media Tools (1=no interest and 10=extreme interest) Non-growing Resellers

Growing Resellers

All Resellers

Online product demonstrations

7.00

6.64

6.75

Electronic marketing support, including storefronts

6.50

6.50

6.50

Internet Advertising

6.20

5.95

6.03

Social/Business Networking

5.10

5.00

5.03

Customer testimonials on YouTube

4.00

4.59

4.41

Specific Reseller suggestions to vendors: • • • • • • • • •

Provide on-line marketing collateral, webinars, demos, training that we can point our customers and potential customers to.

Create customer-to-customer dialogue, blogs, leverage social networking to enable this change.

Assist our company with this transition to social media.

Produce “how to use their product” videos with link to vendor website where our company can link to.

Give me a business reason to use social media tools. Give me something of value.

Provide orientation and training seminars on Web 2.0 tools and how to use the most effective tools.

Make it easier to establish a real web store front for more than one vendor.

Provide us with cookie cutter social media tools to use.

Help with our web site. Make it more effective.

Demographics of the resellers surveyed (on-line questionnaire) • • •

There were 59 reseller surveys completed. Not all participants answered all questions.

The sample is mostly small resellers that have been in business more than 10 years.

Most sell primarily to SMB customers.

Copyright, 2009 Gilwell Group, LLC

Confidential

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Channels of the Future Research • • • •

About half of the respondents reported year-to year revenue growth. The other half reported flat revenue or even declines .

Many different primary vendors were mentioned. Microsoft and Intel computers (various brands) were named most often.

Resellers represent a diverse blend of business models and sales capabilities. More than 11% of their sales are on-line, 26% over the telephone.

Most respondents were more than 40 years old (75%). All had some experience with social media, but most in a personal or experimental manner.

…………………………………..

For more information:

Mike Dubrall, Managing Director, Gilwell Group LLC miked@gilwellgroup.com www.gilwellgroup.xeequa.com

Copyright, 2009 Gilwell Group, LLC

Confidential

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Channels of the Future Research

Improving Channel Productivity Through the Adoption of Next Generation Tools The Channels of the Future subscription service is an on-going, internet-based, primary research project that measures key distribution success factors and channel adoption of disruptive electronic tools and product packaging (like SaaS) over time. This provides clients with objective, actionable information so they can compare their distribution performance against competitors and the needs of their next generation resellers.

Level

Benefits

Delivery

(Cumulative)

Input Into The COTF Research, Comparative Research/Benchmarking For Client and Channel, Additional Half-Day Planning Session

On-site, Telephone, and Internet Meetings

Collaboration

Social Media Audit, Half-Day Planning/Brainstorming Session, Quarterly Presentations, Next Generation Roadmap Development (SWOT Analysis)

On-site, Telephone, and Internet Meetings

Affiliation

Research Data, Blogs, Knowledge Postings, White Papers, Profiles of vendors with disruptive products and services

“Channels of the Future” Community, Industry webinars and meetings

Sponsorship

All members of the “Channels of the Future” Community have Affiliate access at no charge.

Priority access

There are two separate research initiatives that provide clients with data . Technology Vendors complete an extensive questionnaire about their current channel activities and plans, especially their use of social media tools with channel partners. North American Resellers receive shorter but more frequent electronic surveys to document changing preferences and evaluate vendor channel program performance. All surveys focus on answering the following questions: 1. Next Generation Communications: How important to partners and channel sales managers are Social Media tools like Communities, VOD, SMS Messaging, Blogs, Wikis, Twitter, etc.?

2. Next Generation Programs: How can Social Media sites and services be incorporated into current channel programs? How can they be used to build new, and differentiated programs?.

3. Next Generation Planning: How can vendors build and manage “connected ecosystems” that meet the needs of resellers selling to electronically proactive consumers (prosumers).

Customer and Partner requirements are evolving quickly and vendors need to be informed about emerging next generation partnerships. The “Channels of the Future” Service provides critical information in support of investment decisions. It will shorten your learning curve and improve your ability to influence partners in a fast-changing market.

Gilwell Group is a distribution development firm based in Silicon Valley, dedicated to helping companies build and influence their channels and alliances. We have the tools and expertise necessary to move your channel operations from good to great even as competition increases. Our focus is on the future and how new technologies and innovative tools are changing the way products/services are bought and sold.

Contact Gilwell Group for a “Channels of the Future” briefing: executivebriefing@gilwellgroup.com “Channels of the Future” Community on LinkedIn

Copyright, 2009 Gilwell Group, LLC

Confidential

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