The Wireless Way, with Chris Whitaker

State of the Channel, with Jay McBain of Forrester

November 16, 2021 Season 2 Episode 15
The Wireless Way, with Chris Whitaker
State of the Channel, with Jay McBain of Forrester
Show Notes Transcript

This insightful conversation will bring you up to speed on the value of the channel and the direction we are going, it is exciting.

Jay shares his research on the flow of the money, the value of partners, the decade of the ecosystem, advice for suppliers and selling partners, level of orchestration and measuring business outcome. This is an impactful and thought provoking episode you may have to listen to twice!  I have added the transcript as well.

We dive into the details of emerging tech and IoT, things to think about.   His advice on how to win in an environment with millions of options is invaluable.


Jay's top ten- https://www.forrester.com/blogs/what-i-see-coming-for-the-channel-2021/
Jay's personal blog- http://www.jaymcbain.com/

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SPEAKERS

Jay, 

Chris, 

Intro 


Intro

0:09

This podcast is dedicated to those that are in the mix, making it happen and want to do better, better and everything. Each episode, our guest will help us be better, do better and perform better. We will tackle topics that we all deal with in business and in life.

CW

Chris Whitaker

0:33

If I haven't told you lately, I want to make sure you hear me loud and clear. Now, I really appreciate you making time to check out this podcast the wireless way. It's my goal to bring on great guests and learn about them personally and what drove their career to where they are today. And today's guest is another very interesting one, a very sought after kind of an expert on the channel, if you will. And I think you know, his theme music he chose and I've been re asked him I guess of late to, to choose their own intro music. And I just love that Top Gun theme song. It really sets the tone for this, this episode. So buckle up and hang on a lot of facts and a lot of numbers about to come your way. And I'll have the transcript in the show notes because it's so much information. It can be almost overwhelming. We really have a great conversation around you know what led him and got him to where it is today. You know, advice for suppliers and want to leverage the channel and advice for selling partners how to grow their business in this ever changing emergent technology environment that we're in. So again, thank you and the episode begins right now. And by right now, I mean right after I tell you about Tealrus, we're a technology solution brokerage, some nose as a broker as well. And we have just a deep deep set of offerings from marketing social engineers solution architects, financial services, commission services, it just goes on and on. So if you're in the technology, business selling any type of technology and you would like to work with a broker that has a deep bench if you will have just great offerings help you grow your business. Let me know I'd love to put you in touch with the right person in your region. And even though it may not be a good idea, yes, yes sorry goose but is time to buzz the tower

I

Intro

2:44

welcome back to a another episode of the wireless way a double entendre meaning no strings attached no judgment and of course the journey the path and the adventure today. Definitely want to hang on to your seat as we listen to Jay McBain my guest today and I love his intro music theme from Top Gun really sets the tone. Jay McBain is one of the most visible and respected thought leaders in the global channel name 2021 channel influencer of the Year by channel partners magazine, top 40 under 40 by a Business Review, as well as numerous channel magazine top influencer list is often sought out for industry guidance and future trends. He has spent his 27 year career in various executive Channel Sales, Marketing and strategy roles within several companies. And now J is the principal analyst for global channel partnerships and ecosystems at Forster when the most influential global research and advisory firms in the world. And if you want to know more about Jay, he's an open book. He has his own blog at Jamia bang, calm and he'll tell us more about that later. So if you want to know more, definitely check it out. Jay, thank you for making time. How're you doing today?

JM

Jay McBain

4:02

I'm doing great. Thank you so much for having me.

CW

Chris Whitaker

4:04

You are very welcome. And I'm just glad you can make it. We're looking forward to this conversation for some time. So we kind of read over your bio, and there's a lot more to J McBain than I've discussed. So fill us in, tell us the rest of the story. And how did you get to where you are today?

JM

Jay McBain

4:24

Yeah, it's interesting. And of course, I wrote a blog on this one time I'm so interested in the butterfly effects, you know, from that really bad Ashton Kutcher movie, but what are the moments in your life that you know if you would have went left instead of right? changed everything. And I talked about you know, kind of 10 of those moments, but I grew up with an accountant as a father. So from a very early age, I kind of counted most things quantified most things, and that's the way my brain works. When I look at something later on I got a great chance to be a help desk. College at IBM was my first internship. And from there, I was able to work for IBM for 17 years and, and Lenovo, I got a chance to work in manage services with AutoTask. I led left AutoTask with the founder and created a channel mobility and social company became an AI company. And all along that way and the four and a half years I've spent with Forrester, I've got to look at our industry and count different things and get really interested on you know, how the connective tissue works and the influence works and, you know, be able to tell stories that maybe connect dots that other people don't have time, or like me aren't paid to go connect. So that's where I come at the world.

CW

Chris Whitaker

5:48

So was it revolution over evolution? or at what point did you go you know what, I'm going to be Jay McVeigh at Forrester doing what I do that? Did you stumble into that? Or was that a very focused effort you

JM

Jay McBain

6:00

had? Yeah, it wasn't almost nothing in my life is stumbled. I tend to be very process driven and very much of a planner, you know, with different milestones and bucket list and stuff. I was dazzled through my time earlier in my career from somebody like a Tiffani Bova who today is the evangelist for Salesforce. But she was the lead channel analyst for Gartner back in the day, and she did that for about 10 years. And she would go out and talk about the tea leaves. And I was interested in I think she did about 200 and still does about 250 speeches a year, and just had this wonderful influence. And again, connecting dots. And I would say she's probably the reason that I'm an analyst. You know, I chose Forrester versus a Gartner IDC for for reasons of you know, culture and in size and other things. But I just it gives me a great platform, where you know, all of the Fortune 2000 companies are clients of ours. So I can move from a conversation with a Microsoft or AWS or Google, you know, to a conversation with you to a conversation to a startup, just getting going and thinking about ecosystems. And I go back and forth all day long, you know, back to back, resetting my brain every 30 minutes. And it's just such a no wonderful breath of fresh air to kind of look at this industry at that level. And again, try to connect dots that, you know, are useful to people.

CW

Chris Whitaker

7:30

That's a high calling. I think for all of us, this might be a tough one to answer in a short time. But But what's been the most surprising and maybe the most interesting development in the channel of late Yeah, it's

JM

Jay McBain

7:41

hard to say just one because I think there's about 10 different things happening at once. And then overlaid on top of that we had a global pandemic. So you know, many of the trends that we've been watching for years and years, you know, got put on steroids during a global pandemic. So these things that we're watching as major trends are starting to connect faster, and more and more with more velocity, where we would have talked about a trend over the course of a decade. It's to the point now that if people don't have these in their 2022, planning sessions, if they aren't taken advantage of these trends in the next, you know, 18 to 24 months, it may determine winners and losers, probably the most surprising thing to me, is the difference in the flow of money. And this is driven by a lot of other trends. You know, we have a new buyer, new buy in psychology, new buying journeys, we have absolutely a new buyer four years from now, the majority of all of our customers will be millennials, there's so much going on with the buyer, but it's actually in the business models themselves. And almost every company in the last year has made an announcement about their business model, where, you know, you may have saw HP and Cisco and Dell and IBM, you may have saw, you know, other major companies just in the last few weeks like Lenovo and and others announced 100% subscription consumption models. Well, this starts looking like the telco space where you know, agents have run these models forever. This looks like the managed services space, which is a 30 day recurring, you know, type of model, but all of the vendors all the three and a half trillion dollars that changes hands in our industry is pretty radically shifting and it's not just subscription and consumption, and usage based and value based models. It's the introduction of product led growth. The success of zoom inside the pandemic was a plg success story. The success of slack was a product lead story, which didn't include resale, it didn't include the changing of hands through different levels of distribution. Where you know, Slack was purchased by Salesforce for 27.7. billion dollars in a pure product led model. So all these different changes. And then the fact that marketplaces which we've been talking about for decades, grew more in the first three months of the pandemic than the last 10 years combined, where 1/3 of the US economy is now running through E commerce marketplaces. So the biggest impact for the channel, broadly across telco across technology across all other 27 industries, is how money is going to change hands, and how value is going to be wrapped around it. And, you know, just to finish off this topic, you know, right. Today, if I look at the broader tech and telco market, which by the way, is doubling this decade, from three and a half to $7 trillion, of what businesses and governments spend. Today, 64% of it flows through partners, it is resale. And what's interesting, that's, you know, over $2 trillion that flows through our books. And that's not going to go down. But the most surprising thing is it's not going to go up. I believe that by the end of the decade, 33% of this industry is going to be resold, which is that same 2.2 trillion 33% is going to go through marketplaces. And we're starting to know which ones are going to be the big winners, and 33% is going to go direct. But over all of that third, a third, a third partners are going to be involved early, mid and late in 90% of the cases. So the channel, which has been synonymous with the changing of money for 40 years, is now changing to more of an ecosystem where the channel partnerships are critical for the future, and surround 90% of our customers in every moment through their journey. But it may not be correlated with how they actually spend the money. And that's where we're seeing the biggest surprise

CW

Chris Whitaker

12:04

that is fascinating. And it reminds me of a quote I read of yours in one of your white papers, I believe a solid on channel partners website, the future of channel partner programs and ecosystems will be anchored on automation, flexibility, scalability, and self service. Effective use of technology tools is no longer optional. And then you finish out with say ecosystems don't run on spreadsheets. Can you elaborate a little bit more on that? And you know, what do you mean there?

JM

Jay McBain

12:35

Yeah, one of the things I do in my spare time, is I published the channel software tech stack. So there's 183 companies on this tech stack. And last year, they drove $2.8 billion with a B in recurring software revenue, to drive channels. If you actually look across the world, and look across all 27 industries, you bought your last car from a dealer, you bought your last TV from a retailer, you bought your last jar peanut butter from a brochure. So 75% of world GDP goes through third parties. It's not massive, it's no of the 86,000,000,000,075%. So I'm fascinated with in those third party relationships, where you can't hire and fire the person where you got to work together, whether you like each other or not. But you've got to recruit these folks, you've got to educate and train them, and certify them and build competencies, you've got to do incentives and motivation and keep them loyal, you got to do the CO selling co marketing, the enablement, the collaboration, the CO innovation, I mean, there's just 100 things you need to do. Again, whether it's an auto dealership, whether it's a telco sub agent, whether it's a pharmacy, you need to do this at scale, and I love the 183 companies that drive this market. And for decades now, most companies right up to the fortune 500 run a lot of it on a spreadsheet is just there's no data lake, there is no place where all these 100 things come together in one place. And what we're telling companies now, and it doesn't matter who you are and what industry you're in, your ecosystem is going to be 10 times larger than the channel you have today. Remember the people that collect the money. So if I'm you know, IBM and I have 150,000 partners and partner world, you're going to need a million partners to be successful this decade. So if everybody's facing off with this 10x And like you mentioned earlier, you know, the average channel team has for people where they need 10 The level of automation, this level of data that you're going to need from third parties is going to be absolutely critical to be able to do this at scale, you can't hire more Channel account managers, you just can't put more people in the middle of bad processes. Everything has to elevate this game has to be elevated. And I call it the decade of the ecosystem where we can build out these modern tech stacks to make all this work. And to drive this industry forward.

CW

Chris Whitaker

15:24

Wow. Yeah, I, I agree with everything you just said, you validate a lot of my thoughts, at least, and I've learned a few things, you know, part of my job here to learn kind of how I look at as a three legged stool, you know, beyond advanced solutions team is obviously enabling our partners and being another resource for them in terms of mobility and wireless and Internet of Things. Secondly, working with my colleagues and co workers and being a resource for them. And then thirdly, working with our suppliers, making sure that you know, they're, they're equipped and ready to win. And they're set up for success. So own that. No, that's kind of leads me to my next section. But what advice do you have for suppliers that that want to leverage the channel? And before you answer, I was one of the thing, I probably do two or three interviews with new suppliers a week. And I'm always intrigued me how little they know about Polaris are the broker business in general, you know, asking me do we have warehouses and we send out our own technicians? And do we have building platforms? I mean, so long, I mean, some of the things are obvious. But from your perspective isn't like a top three list. I know, I know, you got a great top 10 list, by the way, that maybe the top three advice, nuggets for suppliers are going to level leverages channel.

JM

Jay McBain

16:45

Yeah, all the things that you just said, is a level of orchestration, there's a lot of moving parts. But those parts have to come together in front of the customer, and add to and be able to be measured by a business outcome. And so there's a critical function that that you and your company provide in that orchestration of a lot of moving things. But let me just add to that, that the moving things are going to increase exponentially. So you focus on things like IOT and mobility. At Forrester, right now we're watching 800,000 companies that are in the emerging tech space. They could be IoT or AI, or automation, mobility, 5g, it could be blockchain, or quantum AR VR, all the elements that are coming into play right now have 800,000 companies, what's interesting is about 1% of those companies have started to realize that they're not selling products. It's not a SKU that you're going to skew up through some level of broker or distribution or, or some through some cloud solution provider. It's not a product, it's more of an embedded white labeled layer, to a business outcome. And there's a layer of orchestration of where that's going to come to be. And about 8000 companies are phoning us right now saying like, how do we get started? You know, what is this about that event last week in Vegas? And, you know, where do people learn? What do they read? Where do they go? Who do they follow? How would we even get started the most basic of questions. Today, we're watching 175,000, software companies, SAS companies, today, 10% of them are coming around to channel ecosystem religion. And you've got 17,000 new channel chiefs asking these questions as suppliers. You know, how should I be thinking about routes to market go to market? How do I get to my market tam target addressable market size? Well, that 175,000 software companies as software eats the world is going to become a million by the end of the decade. So the question goes from those 800,000 emerging tech firms, the million software firms, the millions of partners that play in technology now that every company is becoming a tech company of the all the 35,000 vendors that play in more the traditional hardware type of world to the 35 million conversations that customers are having every day and outcomes are looking for. How do you orchestrate something at that level? And if you take your calculator and start multiplying a million times a million times 35 million, you're going to get to an error pretty quickly. And you're going to realize that none of this can be done manually. None of this can be done in the old, more human centric way. So you and your company are going to figure out ways and you are today at levels of orchestration that are really you know, automation and AI lead. And you're going to be connecting dots between all those big big numbers. And bringing down the layers of technology and the layers of services and, and other things necessary to solve the customers problem and working hand in hand with the partner that you have, that's, that's sitting at that customer's table, and maybe the multiple partners that are sitting at the table across from that customer,

CW

Chris Whitaker

20:26

you know, when I teach IoT mobility, one of the cornerstones or pillars of it is increasing efficiency and effectiveness. And we talk a lot about, you know, how you can have one without the other. And unfortunately, I think a lot of businesses, so as long as you know, effective, and I get the outcome, I won't, who cares if it's efficient or not? Who cares if I'm throwing bodies that are throwing money at it. So I like how you put a lot of that thing, you know, just smart automation and leveraging the tools we have in front of us that a lot of companies seem to whistle by. I'd be remiss if I didn't ask you the flip side of that question to me. So the audience is made up of a lot of our supplier partners, and of course, our selling partners and in France or our technology have gathered over the years and fortunate to have thanks for listening. So. So on that note, what advice do you have for selling partners? No, there's a lot of selling partners that have been the best mean the the challenge of our selling partner community, right, there's some that have been doing it for a couple of years, and some that are doing it for two or three decades. Have you seen Is there a magic equation other than just hard work, I mean, you have any other advice for partners want to grow their business going into this next decade,

JM

Jay McBain

21:38

I mean, there's two things that I think jumped out to me number one, is for working with your partners to look to the left, and look to the right of the transaction, you know, with all of the changes that we're going through, again, many of them exasperated due to a pandemic, or accelerated because of the pandemic, you know, buyers are becoming much more digital, we know that we don't have to be told that again. The fact though, is we're starting to learn that the average buyer, you know, that's looking perhaps for a suppliers product, is going to go through 28 Digital moments, before making vendor selection 28. So the other thing we know about the buyer, we did a big piece of research last year on the future of buying, business buying. And the conclusion was, the future business buyer of your product is going to look a lot like a consumer. So start thinking about that early journey, almost like the way you bought your last car. And I could almost predict those 28 moments that you took, looking at the invoice price, looking at the back end rebates and configuring your car and going to YouTube and looking at the videos, go and talking to your neighbor, your friends, your social media, I mean, we kind of understand those 28 moments from a consumer perspective, because we've been through them. By the time we get to the dealer, we know more about that car than the salesperson ever will. We know more about the deal. We know within $100 what the deal is going to be after they sit us down for eight hours, you know, with a manager trying to get you a deal. So with all of that, we're ready almost to change that to a digital transaction to say, I'll pay you $100 More if you just give the car on my driveway and hand me the keys. Because I don't need to go through that full day without eating getting tired. That whole exercise that we've been going through for you know, 100 years buying cars. Now that buyer that journey looks exactly like buying software, hardware services telecommunications in the future. So the more you understand to the left of the transaction, those 28 moments, who owns those moments, the watering holes that that customer's going through, that gets smart, and to narrow down and to figure out what layers of the cake, you know, they need to bake to solve their problem. The more we know, the more we can encourage our partners to play in those early moments and say nice things about us is going to be the recipe going into the next decade. And the companies who do that the best. And by the way, it takes a lot of partners. Microsoft who already has 470,000 partners is recruiting 400 new partners every single day. So they're adding what their competitors have, they're adding an AWS IBM Google size channel every year to their base. You know, a company like Salesforce in SAS is recruiting 250,000 new partners. They don't even have a resale program, they shut it down. 100% of these partners are going to work to the left, which is influence or work to the right, which in a subscription model is every 30 days forever. They're going to be doing the adoption. They're going to be doing the integrations and stickiness. They're going to be doing the upsell cross sell and Richmond. They're going to be doing all the work to keep that a Salesforce customer for life. And so that's the level of looking to the left and to the right. The second thing that I would strongly suggest is you quantify it.

JM

Jay McBain

25:14

You know, it's you've already quantified your program, I know what your front end margin is, I know what your back end kickbacks are volume rebates and new customer bonuses. I know what your market development funds are. That's such a small part of my opportunity. I know today for the companies who have published their multiplier. I know that if I sell a Google today, we published this last week that there's $5.70 as a partner that I can go get for every dollar of Google. So if I've got a customer considering $100,000 of infrastructure in the cloud, I should be thinking about the half million dollars that it kicks out in services, because I'll tell you that Accenture is, and the big global system integrators are consultants and a lot of people from other industries, that's what they're coming in to attack, they don't want the resell point part of it, which might be 20%, or 30%. Whatever it is, they actually want to make two or three times that amount at 75% margins. So you should be asking your supplier and if you are a supplier, you should be providing the quantification of the ecosystem or economic value you create. HubSpot is $5.80. Microsoft is out in the community talking about five to nine time multipliers, unlocking trillions of dollars, and matching that up to skills and practices and matching that up to places in their program where they can help their partners get to triple digit growth by following the right model and the right path to get there. That's the change that we're going through right now. And

CW

Chris Whitaker

26:54

I can't wait to get this interview in transcribe, there are so many great facts that you're just spouting off, that they so many folks are going to want to know about. So thank you for that. Wow, I almost I wish we made this a part one, part two, maybe we can later. But moving on to another area. As I mentioned, I am passionate about the Internet of Things and sensors and AI and camera vision and in even mobility and wireless in general, which again touches so many other emergent technologies, like you said, it's not really a single SKU deal anymore, that there's multiple layers of this of this stack. So tell us a little bit more what your thoughts are on the challenges, and maybe even the advantages with emergent technologies when it comes to this partner community.

JM

Jay McBain

27:47

Yeah, I mean, one of the challenges is in the massive, grassroots level, community level approach it takes to succeed. You know, we'd all love to, you know, have an Internet of Things, product or solution, run a Superbowl ad and sell, you know, millions of dollars of it. It just doesn't work that way. When I go back and look at Internet of Things, or I look at any emerging tech, I look at the 12 buyers of that. And there's a bigger likelihood now that it's a line of business fire, not a technology buyer who's buying it that project, the head of marketing in many companies now spends more money on technology than the head of technology. So I get obsessed over those maybe 12 line of business leaders who might put internet of things into something they're doing around CX or whatever industry they happen to be in to solve their problem, or to drive more data or to do whatever to make their lives better in their company's lives better. Second, there are 297 sub industries that each have a different IoT conversation. You know, if I run a midsize clinic with 50 doctors, there might be a beacon that I can put up on the wall that is HIPAA and high tech compliant, that can add to the patient experience px in my clinic, there's a lot to unpack there. But again, that's not a Superbowl ad. It's one of 297 sub industries, that all have a different use for that very specific beacon. Number three, geographically, what I can do in my clinic in upstate New York versus Toronto versus London versus Singapore, very different legislation, regulation, compliance governance, it changes every 100 miles you drive. Every state has different. So what one state could do with a beacon, one province cannot. You got to be into that level of geographic specialization in IoT, fourth sector size and segment. So if I'm talking to a nine person dentist office versus a 49 doctor clinic versus a small office at all, completely different conversation. And by the way, very different partners wrapped around that customer. So I can't just go and find that same partner that's going to cover every size of business. And then number five is in the products themselves. It used to be easy when we talked about hardware, software and services. Well, today, we have 26 major categories of products across telco and tell attack. And 250 sub products, you can't just come in talking about security around IoT, there's seven layers of it, you got to secure the perimeter and physical secure the network, secure the data, secure the application secure, I mean, on and on and on. Now, there's 17 layers of security below that as well. So in all of what I just said, there's 35 million permutations on how to get to market. And I need to work with an orchestrator that can help me influence the influencers and build out where I need to be, I'm not going to be across 35 million opportunities. I'm not just going to write 35 million books, right? But where do you really want to go when, if you want to go when in upstate New York, and let's go look at Buffalo, and Syracuse, and Rochester, and Albany, if we really want to get serious there, there's basically 20 companies that you need to know, out of the millions that I talked about. Now you're dealing, you know, you can roll up your sleeves and start naming names and putting places you need a process for that, because you don't just want to win and that small territory, because there's probably only 100 clinics out there. But if you want to start winning in very specific places in that 35 million conversations, you start with one, and you run a playbook over and over and over again in parallel, so that you're winning in certain industries against certain buyers against certain geographies and against certain size of as you're finding places to win. And then you're just scaling from there. Can you scale to be a billion dollar company selling beacons? Absolutely. But again, there's no Superbowl ad that kicks it

CW

Chris Whitaker

32:04

all off that is thrilled thought provoking words gets me fired up just thinking about the work I have to do. There's so much information you've shared and I'm so grateful for Jay, thanks again for doing that. Maybe you could, as you do your last words or in any thoughts you want to cover. We have a chance to go into please be sure to include how can people find out more and how can they find your work or learn more about the research you've done?

JM

Jay McBain

32:28

Yeah, absolutely. So we started off by saying I'm an open book. So if you want to, you know hear the music I listened to or the last boating trip I took or the last speeding ticket I got you can go to Jay McBain comm j y McBain calm. That's my personal life. My professional life sits on forester and I write a lot about these connections, the watering holes, you know, the 59 magazines that that customer might be reading the 143 social groups, things like Reddit and clubhouse and discord and slack and places they might be. I write about the top podcasts like this one that really influence people. And I go around all these spheres of influence and kind of maybe connect dots or or think about things slightly differently than the way we've thought about them for for decades gone by

CW

Chris Whitaker

33:16

now. Wow. Thank you went by so fast as always, but I am glad we had this time together, Jay I'm sure I hope it won't be the last time. Thanks again for making time to be with us today on the wireless way. Alright, I

JM

Jay McBain

33:29

look forward to part two.

CW

Chris Whitaker

33:34

And there you have it. Another episode of the wireless way is in the books. This was a very impactful one a lot of information about the channel advice for suppliers and selling partners and the future of emerging technologies a lot to unpack there, check out the transcripts, maybe listen to it again. Special thanks to Jay McMahon, and forester for being on the show today. Have a great remainder of your day and week. Stay focused on your goals. And know we're all just one decision away from changing everything. Sometimes for the good sometimes not so good. If you like what you've heard, please subscribe and like and share all that jazz and we'll catch you next time on the wireless way.