It’s not a crisis, it’s a strategy
The last few weeks have been marred by announcements of job losses from a range of tech companies. The most recent is Microsoft which, at time of writing, was expected to announce as many as 11,000 job cuts before unveiling its Q2 results on 24 January. The software giant joins the likes of Citrix, Tibco, Salesforce, Cisco, HP Inc and Intel, which have all announced job cuts recently.
A lot of people will have started the year in a more financially precarious position than they ended 2022.
The common reaction to this type of news from a channel perspective can be split into two separate and seemingly contradictory responses. The first is concern that the cuts will affect the overall performance of the vendor, the negative message it might send to customers about the credibility of the vendor, the possible effects on its product development and, finally, what it means for the programmes and services it provides to channel partners.
All of which is perfectly understandable. Job cuts say something about the vendor making them and it’s not usually positive. But aside from the numbers, it’s where the job cuts take effect that ought to have the most bearing on channel partners.
Product development can be a concern, for example, for what it says about the future product roadmap. But sales may not be such an problem. If a vendor cuts sales people targeting particular areas or selected customer segments, for example, channel partners may have some expectations of being called upon to fill those gaps. Almost overnight, the prospective sales landscape for channel partners could be expanded to a much larger extent than they may have expected.
That’s because the second response to prospective job cuts at tech vendors is that it opens up more opportunity for partners, increasing the channel’s share of the company’s sales mix and the importance of partners in the go-to-market strategy.
That’s why, when reporting on the Citrix job cuts, CRN was able to quote a channel source saying: “This [strategic shift] could be a really good thing for the channel. With Citrix focusing on the top 1,000 accounts, that leaves the channel with the opportunity to service the remaining accounts. This could provide some explosive growth for Citrix service providers.”
Even if a vendor chooses to retrench, it may end up pushing a larger share of its existing sales to partners to achieve that goal.
Admittedly, the opportunity presented to partners when vendors cut jobs in economically difficult times is more challenging than normal but there’s still potential there.
The opportunity is not confined purely to short-term access to more accounts and sales. Partners have the chance to entrench their position as a very important part of the vendor’s go-to-market strategy, if not the most significant part, so that, if and when the vendor is in a position to take on more staff again, it is more likely to make those appointments in roles that support its channel activities and programmes.
Vendors and partners alike are often exercised by trying to strike the right balance between direct and indirect sales. When vendors are forced to make cut jobs, it can help to strengthen the argument in favour of pushing for more indirect sales. But once that shift has been made, it’s important for partners to prove it should remain when vendors are in a position to expand again. Partners should not just be viewed as a convenient short-term sales channel to pick up the slack when times are tough, they also need to be seen as one of the best and biggest drivers of growth when things start to pick up again.
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