150 – Celebrating 150 Amazing Episodes with a Five-Timer Guest, Jay McBain

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An Ecosystem Expert Joins Ultimate Guide to Partnering®

I’m excited to be celebrating 150 amazing episodes with a five-timer guest, Jay McBain. Jay has been an amazing guest and joined the Five Timer’s Club with this episode focused on the transformation we have all been seeing, WTF is an Ecosystem, and a discussion of the Seven Principles of Successful, Effective, and Sustainable Partnerships and Ecosystems.

In Jay’s Words

Jay McBain is an accomplished speaker, author, and innovator in the IT industry. Named 2021 Channel Influencer of the Year by Channel Partners Magazine, Top 40 Under Forty by the Business Review, Channel A-List by CRN, Top 8 Thought Leader by Channel Marketing Journal, Top 20 Visionary by ChannelPro, Top 25 Newsmaker by CDN Magazine, Top 50 Channel Influencer by Penton, Top 100 Most Respected Thought Leader by VSR Magazine, Global Power 150 by SMB Magazine, and Top 250 Managed Services Executives by MSPmentor.

Jay is often sought out for keynotes, thought leadership, and future industry guidance. He has spent his 28-year career in various executive channel sales, marketing, and strategy roles within IBM, Lenovo, Autotask, ChannelEyes, Forrester, and now Canalys. Jay is the chief analyst for global channels at Canalys – the world’s leading analyst firm with a distinct focus on channels, partnerships, alliances, and ecosystems.

What You’ll Learn

  • What’s New for Jay (3:40)
  • The Ecosystem Movement (5:18)
  • Partnerships vs. Ecosystems (7:22)
  • Addressing Organizational Victory – Mindset, Commitment, and Shared Vision (11:40)
  • What Organizations Can Learn from Microsoft’s Model? (16:30)
  • Addressing Ecosystem Victory – Maniacal Focus, Brand & Story, The Benjamins (Getting Results) (22:32)
  • Why Agility is “Mission Critical” during this time? (28:18)
  • How Organizations Need to Think & Act Now (30:20)

Why Listen?

We have seen rapid and sustained transformation for two years. Technology is transforming every company and industry, and we will never go back. Jay McBain has coined this the “Decade of the Ecosystem”. We will continue to see significant shifts in how we market, procure and deploy the technology. The channel is also evolving, and technology tools to support this journey will grow, expand, and mature. We are in the early innings of a very exciting game!

WARNING – This episode is exclusively for leaders who care about partner ecosystems, the evolution of selling and the systems driving this next phase of economic growth, and how this “Decade of the Ecosystem” looks to take shape. You will hear Jay’s view on how organizations need to think and move differently during this rapidly changing digital economy.

It’s always great to have Jay come to visit this platform. I hope you enjoy this discussion as much as I enjoyed welcoming back Jay McBain as a guest on Ultimate Guide to Partnering®.

Quote From This Episode

“What a great time to be in this market. If every company is becoming a tech company, we’re in the right kind of place if every company is now believing that they can’t do it alone, what a great place to be in is in partnerships.”

Episodes featuring Partner Ecosystem Leaders and Experts.

149 – WTF is an Ecosystem? And How Partner Hacker helps tech companies PartnerUp with Jared Fuller

139 – How Can Technology Partners Organize for Success around Go to Ecosystems? with Allan Adler.

132 – How to Achieve Your Greatest Results in 2022 – Part Two – Ecosystems with Jay McBain.

136 – How Can Partners Achieve Their Greatest Results Through Marketplaces? With Jake Swenson, VP of Microsoft.

116 – Helping ISVs Accelerate Meaningful Revenue with the Cloud Providers through Marketplaces with Sanjay Mehta of Tackle.io 115 – Creating Value to Innovative Routes-to-Market with Precise Industry and Customer Solutions – with Oguo Atuanya, Microsoft GM for Scale Partners.

114 – Cloud Wars Ranks the Most Influential Cloud Vendors During This Rapid Transformation – with Bob Evans, creator of Cloud Wars

Our Sponsors

Resources

We are so excited to welcome Athletic Greens as our latest sponsor. My daily ritual has included a “green drink” supplement for over 20 years ago. AG1 is packed with 75 high-quality vitamins, minerals, whole-food sourced superfoods, probiotics, and adaptogens. If you’d like to join me, give AG1 a try. Athletic Greens is giving away a free one-year supply of Vitamin D and Five Travel Packs with every new purchase. Check them out at athleticgreens.com/vincem

PartnerTap is the Founding Sponsor of Ultimate Guide to Partnering. PartnerTap is the only Partner Ecosystem Platform designed for the Enterprise. Their technology makes it easy to align Channel Teams with automated account mapping, letting you control what data you share while building a partner revenue engine.

Transcription – by Otter.ai – Expect Typos

SUMMARY KEYWORDS

partners, ecosystem, company, people, drive, channel, customer, microsoft, organization, talking, partnerships, sale, starting, world, industry, ceo, salesforce, timers, market, align

SPEAKERS

Jay McBain, Announcer, Vince Menzione

Jay McBain  00:00

What a great time to be in this market. If every company is becoming a tech company, we’re in the right kind of place if every company is now believing that they can’t do it alone, what a great place to be in is in partnerships.

Announcer  00:14

Welcome to The Ultimate Guide to partnering in this podcast Vince Menzione. A proven industry sales and partner executive brings together technology leaders to discuss transformational trends and to deconstruct successful strategies to thrive and survive in the rapid age of cloud transformation. And now your host, Vince Menzione. Welcome to or welcome back to The Ultimate Guide to partnering where technology leaders come to optimize results through successful partnering. I’m Vince Menzione, your host and my mission is to help leaders like you unlock the leadership principles and learnings of the best in the business to get partnerships write, optimized for success and deliver your greatest results.

Vince Menzione  00:59

The five timers club for this special 100 and 50th episode of ultimate guide to partnering. I was delighted to welcome back for the fifth time. My good friend and industry analyst Jay McBain J McBain has coined this the decade of the ecosystem. And because of that, he’s created a movement. On this episode of ultimate guide to partnering. Jay joins us back for a really great conversation on what makes great partnerships, this ecosystem movement we’re all at the Malstrom of and how organizations can pivot and adjust during these volatile times. I hope you enjoy this episode as much as I enjoyed welcoming back. Jay Nick bein. Before we dive into the interview, I’m happy to announce that partner tap has become a founding sponsor of ultimate guide to partnering partner tap is the only partner ecosystem platform designed for the enterprise. Their technology makes it easy to align channel teams with automated account mapping, letting you control what data you share while building a partner revenue engine. I’m so excited to have them on board.  Jay, welcome back to the podcast.

Jay McBain  02:22

Well thank you so much for having me back.

Vince Menzione  02:25

is so good. You are a five timer on Ultimate Guide to partnering this you are in very rarefied air. Just you and Tony civilian, the CEO of SADA Systems, who’s also an amazing friend as you are. But I was thinking about this five timers club, right. I went back on SNL and I looked like Alec Baldwin, Steve Martin, John Goodman, Tom Hanks, Christopher Walken. So I was thinking about like, where’s the cowbell? We need some more cowbell.

Jay McBain  02:53

Yeah, I remember that show in particular, with Steve Martin being anointed the five timer and going into that back room and getting that bluer robe put on them and, and sitting down with all the other five timers.

Vince Menzione  03:06

Yeah, they had that total skit back in the day, right. And yeah, I keep thinking like we should put on our robes hang out by the pool. I think we get better food there too. I think yeah, I think it’s, there’s a whole thing here. So I’ll put that back on you to design what the five timers club is. And we’ll go from here. Well, you and I are in Florida, Tony’s in LA. But there’s chance that he comes out here once in a while. So we’ll have to do this when the three of us are all in the same part of the country. So it’s been a big year for J lots of awards, lots of excitement, top channel and ecosystem influencer awards, and now a new role. Can you bring our listeners up to speed on what’s been happening in your world?

Jay McBain  03:47

Yeah, one of the biggest trends was the great resignations. So I thought, hey, what a better way to experience it and analyze it, then actually go through it yourself. So yeah, I was able to move on from Forrester and join Canalis. And for me, it was an upgrade because the company has 100 people that wake up every day, thinking about channels and partnerships and ecosystems, thinking about alliances, and thinking about it in each country around the world and every different kind of channel versus being in a larger, more generic company that comes from it from every angle. I feel like it’s a huge upgrade with people that understand what we do every day and, and challenge each other, which some of the trends that are happening that we’ll talk about later on, may not be happening in Europe as quickly they may not be happening in Asia Pacific as quickly they may not be happening in China at all getting challenged that way is good for us. And for most of your listeners who have global roles and work with global colleagues. It’s a really interesting way to look at the world.

Vince Menzione  04:48

Well, we’ve been on a rocket ship, right? I’ve been referring to this as this period of rapid transformation. And it’s been going on now a few years. So this isn’t start yesterday and then come have accelerated things. And you’ve been talking about a term you coined. In fact, that seems like everyone is using this term now the decade of the ecosystem. And in fact, you just participated in an event partner hacker, our good friend, Jared fuller hosted an event the WTF is an ecosystem. Why are we talking so much about the decade of the ecosystem? And what is this ecosystem movement?

Jay McBain  05:23

Yeah, I think at a high level, and for people that aren’t in channels, this whole idea of 75% of world trade goes indirectly. And you bought your last car from a dealer last TV from a retailer, your last jar of peanut butter from a grocer, most of the world is indirect, when I actually push people on, what’s the last thing you bought? Direct, I might have bought a Dell computer in the 1990s. Well, guess what, last quarter, Dell reported $104 billion in revenue. And now 58% of the company is indirect. It’s now the 15 year anniversary of that famous Michael Dell internal memo, direct was a revolution, not a religion, meaning that when that market tapped out at about 30 33% of PC sold direct, their only way to grow the company was to get into retail and resell and other places to go do that. And every company comes to this epiphany, you might have bought insurance direct from Geico. Well, the fastest growing part of GEICO now are their brokers, their agents and those people in your local communities selling GEICO on behalf of the bigger firms. So every company in every industry is looking at this direct and indirect split, looking at the power of these local partners of all types, and again, was 75% of world trade going that way. We’ve kind of ignored it for 20 years, I talk a lot about the previous shows, we talked about the decade of sales starting with Salesforce in 1999. We talked about the decade of marketing, starting with companies like Eloqua, and Pardot, and Marketo, and HubSpot and act on and others about 12 years ago. And now we’re about two years into this decade of the ecosystem. And we’re starting to see some real life action happening on the technology side on the people side, the process side, the programmatic side. And those are the things we can double click on today.

Vince Menzione  07:18

So I know you covered it in the event. But what’s different about an ecosystem? I almost feel like it’s there’s a little bit of hype in the room around ecosystem versus partnerships, right, I talk about the importance of partnerships as a key accelerator to success. Are we not talking about the same thing

Jay McBain  07:34

To over simplify an ecosystem and why we need a new word is this idea of non transacting partners, while the world the majority of the world, as I just mentioned, goes indirect. Most people in and out of channels, think of the channel synonymous with that point of sale, that retailer that point of sale that cash register at the front, the marketplace, the buy button, it’s that point where money changes hands. And the hardest thing to do is talk start talking about expanded channels. What about that channel that helps get your customer to the dance before vendor selection? How about that channel who helps keep that customer dancing all night long? Every 30 days forever in a subscription consumption model? What about that channel who you align with on CO innovation and value creation, the tech alliances the strategic alliances, the business alliances, so we’re talking about six different swim lanes of channels. And rather than just calling this an expanded channel, the idea of an ecosystem where there is no central source, there is no hub and spoke it literally is a fluid movement of millions of entities companies flowing around and looking for the network effects and looking that no company can do it alone. industry by industry. We’re seeing this in the last 30 days as Ford starts rolling the electric f150 best selling car in North America for decades. The CEO is talking about a computer on wheels. Yep. And competing against a computer company like Tesla. And talking about where the evolution of the channel their dealership network goes in this world of a computer on wheels. And you can talk to pharmaceutical CEOs and banking and insurance CEOs and manufacturing CEO it doesn’t matter where in the 27 industries you go. Every company is becoming a tech company. Software is eating the world. And this whole idea of channels is no longer this siloed point of sale, resale retail based department that no one knows what goes on inside.

Vince Menzione  09:46

Yeah, I say this up close and personal with the organization’s I work with right. It’s bolted on. And there might be a channel strategy. There might be an alliance strategy. The two might not be working together as an example. And they’re deaf. li not directly aligned to the CRO, the CFO, the CFO, and the CEO is trying to manage this whole thing, and the partner organization might be buried somewhere else in the organization. Right?

Jay McBain  10:10

It is. So one of the biggest changes that we’re seeing in this era is people and big companies and the well, Microsoft, Google about a month ago, IBM, Rackspace, Sage all the way down the list, have moved on to this ecosystem model now, where the head of ecosystems reports up through the sea level into the CEO is in the boardroom, and now is starting to hire their six vice presidents. And one of those vice presidents in the case of IBM, for example, is that channel chief, David burrows in that case, who reports to Kate whooley, who is now the new ecosystem chief, a critical part of the ecosystem, are those partners that can transact or assist in the transaction. So whether they take the money or they just help the customer get into a marketplace, or close a direct type of deal, that point of getting your customer to the dance, and then on the dance floor is absolutely critical. But it’s also somewhat even with the importance of the other five swim lanes. And so we’re seeing organizationally now, this start to take place, and what companies are thinking about in terms of this expansion of partnerships, and partners playing different roles, partners with different models, partners, absolutely coming in with different modes of support in some way or another in front of the customer or not, and really driving this future of we can’t do it alone.

Vince Menzione  11:40

I am so onboard with you. I live and breathe this every day. I have for I guess close to three decades. I hate to say that. And I have embodied a set of operating principles around this because I feel and I just did a podcast on the four dysfunctions right? There are several dysfunctional areas where organizations fail here, but also believe that organizations can be successful if they align around a set of operating principles to successful partnerships, and partner ecosystems. But maybe we talk a little bit about this today, like what you talked about just now I call the organizational victory, how the organization needs to align foundationally. Before we lock arms with partners and build this ecosystem, we got to get it right internally. And I talked about mindset, commitment, and a shared vision or purpose. Because I feel like mindset, like if we don’t have the right mindset and culture, we need to get that right first. It’s like the soil on the commitment, side commitment. I hate to be negative, but commitment is hard. Like especially now like we’re going to talk about what’s going on in the economy right now. But organizations are under pressure to perform. And commitment also means time, and organizational alignment. And then the vision like getting that group of executives, those leaders, the five seats at the table aligned to what we want to go drive together and performing together, continually sustaining. It’s hard to do, right?

Jay McBain  13:03

It absolutely is. And one of the biggest changes, by the way is in organizational alignment. When I talked about the channel, the in a silo that’s not only for tech companies, the head of dealerships at Ford sits out in a silo and has the head of dealer marketing dealer, sales dealer operations, dealer finance, that person looks more like a CEO, General Manager than they do a divisional line of business leader. And so company by company, this whole idea of the silo is breaking down in an ecosystem space. The reason is those people that are driving the ecosystem are actually driving the other lines of business and are very supportive. So the one big change we’re seeing is this embedded model of people. And instead of assisting marketing, for example, with those first 28 moments that a customer goes through before making vendor selection, you embed channel professionals, ecosystem professionals in that marketing team who directly report into marketing. And as the direct marketing team is trying to earn 1234 of those 28 moments. You’ve got the people in the room that own the other 24 of them. And together, you can drive more customers to vendor selection in your favor. In the sales department, you’ve got people that own direct sales, you’ve got people that own traditional channels, and you’ve got people that own distribution and marketplaces and all the different things. Well guess what, when you embed the people and have indirect and direct working and actually don’t care as much about how money changes hands, just so that you sign on that customer for the first 30 days in that next after that sign on. Now you need to renew and retain that customer every 30 days forever. You have people in the room in customer success now reporting to a customer success vice president that’s leading adoption integrations stickiness upsell, cross sell enrichment, the target on customer success now in a subscription model. You is 108% for every company we lose, we have to double up another current customer to hit those numbers. And guess what, just like those early marketing teams, we own certain moments in our product earn certain moments over time. But the vast majority is that average customer has seven different partners that work with them over that lifespan that never ends. And so therefore, having people embedded in customer success, that are really focusing on those third party elements that drive those important things towards retention is absolutely critical. Same thing goes for product technology, alliances, the hardware, software, and even services that go into CO innovation, the strategic alliances, the business alliances, that tie up into business strategy, and go to market. So this embedded team is really interesting. And it doesn’t model the channels of the past that all report into another department. It models actually what we saw 10 years ago in data science, and back then the CTO or CEO, or whoever was hired to drive that didn’t get and build an empire below them in the organization. What they did is they embedded all the data scientists into the lines of business, they sat in that marketing room, they sat in the sales, they sat in the Customer Success rooms, and the products, they dotted line back into the CTO, but their best work is working with others that are solving, you know, very critical problems for the organization. That’s what I’m excited to see from organizational changes in an ecosystem versus channels.

Vince Menzione  16:35

I mentioned Microsoft, and I was thinking as you were speaking about how Microsoft has embedded partner across customer success across marketing across all these other areas of the company. How do you remove the silos? I know Satya did it when it took a lot of work, a lot of engineering bringing people together and changing behavior. But what do you recommend for our listeners,

Jay McBain  16:56

so Microsoft had a advantage for 40 years, the company really has had Shanell in their DNA from the early days of Bill Gates right onwards. And so they’d always talks about 90% plus of the business getting partner sourced. A couple of years ago, they kind of changed a little bit of sleight of hand. And they started talking about partner assisting. And they’ve talked about 95 or 96% of their entire business, second biggest company in the world, being partner assisted, it just means that they can measure, monitor and manage those different moments different than the point of sale. And so last summer, Satya went into channel magazines and started talking about this unlocking of trillions of dollars for third parties in the Microsoft economy. And that was really a teleplay into early this year when they announced and they dropped about five different bombs on the channel in successive weeks to start the year from new commerce experience to raising some prices to shifting the risk over to the Channels. But the biggest announcement and longest term impact on the channel is this new point system. And Microsoft, which forever has had this gold bronze silver type of tiered program has now gone to this algorithm. And the Microsoft program now kind of looks like Google SEO, where that algorithm can shift depending on what Microsoft sees as important what they can measure. And where they want to shift easier and focus. And in the case of the early announcement that that’s coming out later this year, to reach 70 points out of 100. To get to that platinum tier, you have to focus in about two thirds of the points are post sale, which is really interesting. So this not only earning a customer, but getting them to renew every 30 days forever, is where Microsoft is putting most of the wood behind the arrow. What if you’re not on Microsoft? Like what do you do? So if you’re not Microsoft now, the first thing I would do is study Microsoft, because I think what they’ve announced earlier this year, and I don’t think the announcement went that well, the the shock and awe strategy was a bit too disruptive. And a few weeks ago, the channel chief quit and they’re about to announce a new one in July. But the fact of the matter is this new commerce experience, every company in every industry who are going through changes into subscription consumption models into usage or value based models, product lead growth, all of these shifting models. According to research Accenture research, it’s 76% of companies are moving into these models. In those models, every single company in every industry is have to build their own new commerce experience, which is to say if a customer buys a subscription or consumption of some type, that becomes an object like a network object, and whether that’s indirect, whether that’s through a marketplace, whether that’s direct, whether there’s 900 different ways to buy, but it all comes back to a single object that can be managed. That’s every company is going to have to do that. And more importantly is every company is going to have to put out their own point system that isn’t focused on that point of sale that doesn’t pay out all the dollars at point of sale and gross and that’s what ends up opinion is almost every company I work with over pays about 50% of their partners and underpays the other 50%. So there’s no perfect calculus when you pay everything front and back end merchants at the point of sale, because you’re assuming that they’ve done all the work to get the customer to the dance that got them on the dance floor, and they’re going to do all the work to keep them dancing all night long. And you’re kind of paying out at that level where your direct salespeople will remind you that some partners just show up at the last minute and collect the order and somehow get 30% for doing that. And then you don’t get reminded because your salespeople may not even know the deals that go through the partners that they did him in touch, because a partner brought all the sales, the marketing, the engineering and everything and didn’t have to involve the vendor at all. So in this world of moving money around, moving it into the point of value, instead of the point of sale is one of the landmarks of ecosystems. Yeah. Well, it’s

Vince Menzione  20:55

funny because we went through the process while I was still at Microsoft, right? We had the single largest budget item. And that was the rebates and commissions for transactions, and we had to shift it over to influence and integration and services and all the other things we wanted to do to drive a cloud strategy. Yeah, absolutely. I’m so excited to welcome athletic greens as the latest sponsor to ultimate guide to partnering friends who know me well know I’ve made taking a green drink supplement, part of my health ritual for over 20 years now. And it has made all the difference to my health and well being. About five years ago I added athletic greens. And now their product ag one has become my go to green drink supplement. Ag one is packed with 75, high quality vitamins, minerals, Whole Foods source superfoods, probiotics and antigens. It literally is replaced every vitamin in my cabinet. If you’d like to give ag one a try. Athletic Greens is giving away a free one year supply of vitamin D, and five travel packs with every new purchase. Check them out at athletic greens.com forward slash Vince M. Yeah, so we talked about these three, we talked about what organizations need to do I want to talk about the outward facing how do we build success, like what I’ll call the partnership or ecosystem victory. And these three principles align to we are now facing out at our ecosystem or a particular partner that we want to lock arms with. What do we need to go do? The first one is around maniacal focus. That is what I see. I see this all the time, you have the great meeting, you have the slide. Everybody’s like cheering in the room, we’re going to go drive this, this is the objectives and key results we’re going to drive against blah, blah, blah, we leave and then nothing happened crickets. So we need to we need to make sure we’re applying maniacal focus and that that has communication and trust all these other things embedded in it. The second area is around brand and story like what are we going to go do to get like why? Why do we even have a partnership, some people just line up partnerships, but they don’t really have a better together story. They don’t intuitively share with the markets what they really want to go do. But there’s a formal and informal components to this as well in terms of how you work with these other organizations and you embed into these other organizations. And then of course, it’s all about driving the Benjamins what I call driving business results. At the end of the day. If you don’t have success, you need to have that success in order to have a flywheel. Right for continued growth. What are your thoughts here?

Jay McBain  23:39

Yeah, I’d say two of the last three a maniacal focus. Absolutely. Two of the last three though, have in the ecosystem world come back to what I call a multiplier effect. The most successful ecosystems today communicate in the language that you’re talking about, not in just what the market tam total addressable market size is and what market share and wallet shares. And those things are a little bit of a legacy type of KPI. What what companies are now doing is saying, what is the economy? What is the ecosystem that we drive the first company to ever do this with Salesforce. And really what you’re doing is exposing your total cost of ownership. And I spent 17 years at IBM and Lenovo selling PCs. The last thing we wanted to do, and Microsoft and Intel and others wanted to do was expose our TCO we created the managed services industry to solve it. And now it’s over a $200 billion industry kind of solving for how bad that TCO was an is well Salesforce, turned it upside down and said and this was years ago and said, for every dollar of Salesforce you buy, you’re gonna buy on average, six other software companies ISVs on top of it on the AppExchange but you’re also going to spend $4.32 to get it all to work. So if you’re spending $100,000 with Salesforce, I hope you have a half a million dollars in the bank to get it to work. And by exposing it it was really interesting because they broke down that $4.32 In to a pie chart showed exactly the money to be made the Benjamins, let’s see how much money is there to be made on every deal on every dollar in implementation and integration in compliance and security and data and automation and continuity. And here’s 17 other tech services. So this spoke a different language and Marc Benioff at the time, it was called ohana, kind of that Hawaiian view of everybody’s together, because he kicked off Dreamforce with 180,000 people in the audience. And those are our customers, employees, partners of all types, everyone together, would talk about this economy of how many jobs it was creating how many hundreds of billions of dollars that was driving and stuff, that Salesforce number today is inching up towards $6.19. So it’s going up, you had HubSpot come out at $5.80 and Google Cloud comm at 570. And all these ecosystem companies that are getting a head start are communicating to partners a different way. It’s not about margins, it’s about multipliers. The multiplier is the non transactional view of how I can be successful of CO innovating, creating customer value, leveraging network effects, all the things around that opportunity for everyone involved. And in every company, by the way, who wants to build this platform, every company that’s really driving this new approach, these are the highest value companies as well in the world, on Wall Street. And they’re driving this via that conversation. So it wasn’t a mistake. When Microsoft came out and talked about unlocking trillions of dollars, none of those dollars were margin or resell dollars. They’re all dollars of working with Microsoft in that case, and raising all boats, and going after building the skills and the business practices, and going to take advantage of opportunities that the last mile is what kicks out most of these dollars. And the partners who get it are growing at triple digits right now.

Vince Menzione  26:58

So what you’re saying really, is that your brand and story is the ability to drive all these amazing business results that this ecosystem, right?

Jay McBain  27:06

Absolutely, and every company has this story. And if you start talking to the channel, if you start talking to partners, at large, with this language, you’re gonna be amazed that you’re talking to new people that aren’t listening to the rolled up sales plan through margins, and how much spiffs they’re gonna make Microsoft for who’s bringing on 400 new partners a day 80% of them are non transacting, but they’re listening to this new language. And they’re helping Microsoft outgrow big competitors like AWS and Google by coming on board with that kind of language. And so these are the things that every company in every industry are are starting to think about when you go into all the sub industries within just the tech industry. There’s 250 of them, how you carve out that insecurity, how you carve that out into the SAS market and other markets is critical and getting leadership over your competition in producing that language and getting your CEO kicking off big events and going into the media and talking with that language goes back to your culture and DNA, it’s going to flow up and down through the organization.

Vince Menzione  28:08

So we talked about this at the beginning of the episode. And before we recorded that things are things are a little bit rocky, a little bit like a roller coaster ride these last few months, and I talked about the last principle is being agility, right? We need we live in this world of rapid change, we need to be able to pivot accordingly. And we talked about thriving and surviving during this age of rapid digital transformation. Let’s talk about that for a moment. Like what do organizations need to do? We’re at the midpoint of the calendar year. How do we need to pivot and adjust for success? Yeah, so

Jay McBain  28:42

when we talked last time, we would have not predicted a war in Europe, we would have not predicted the supply chain and inflationary issues, we would have not predicted what the stock market’s doing recently. These are all things that come in waves, and they seem to hit us like like a perfect storm. But in the end on top of by the way, the pandemic, all of these are driving more focus in accelerating the decade of ecosystem faster than we had even predicted beforehand. Company’s very survival. Again, cross industry companies vary survival is based on their ability to be agile, to not go at it alone, and to leverage partnerships at an increasing pace to not only protect themselves through these times of challenge extreme times of challenge, but to position them on the other side of it for success. And this is I think, for many people in the industry, and for many people that were worried as each of these major macro economic and macro political and other things have happened. It always comes back to driving more growth in our industry as it’s crystal clear in terms of how companies are gonna have to navigate these choppy waters.

Vince Menzione  29:55

And I think we’re at a pivot point, right? I’m the CFO of a company right now. Right and I’ve got to prove form, I’ve got a report back to the board to my shareholders, maybe public or private. What do you say to them right

Jay McBain  30:06

now? Well, you got to be obviously doing very tactical things being agile. This is not the point. And you’ve seen just recently that the person that built too many distribution centers and Amazon got let go. The people that got a bit overzealous at peloton got let go. But on the flip side, if things didn’t turn out this way, if the poker game ended differently, these people would be put up on pedestals, and we’d be writing books about them. So some of these things is you take risks in life, and in you’re trying to predict the future, which no one can. But in the end, as a CFO, you’re you’re going back and saying that, listen, we’re not hiring 1000 people a week, like we were three months ago, we’re starting to recognize, again, that venture capital and private equity markets are drying up, their funds are drying, and we’ve got a lot of walking dead in terms of money that’s out there right now. And we’ve got to be careful, we got to go back into some of the basic dynamics of running a business generating profit and focusing on cash flow, and start modeling scenarios that say, what if this is a multi year 2008 level event, maybe it’s a 1930 level event, and we can’t get caught flat footed. If this does go beyond the next political cycle. And it becomes a generational thing. I mean, we’ve got to have all those scenarios in place. And what that means underneath that the strategy though of not doing it alone, and understanding where our customer is going, our consumer, our business customer is going their psychology, their behavior, their journey, this is the time to again, double and triple click on our customer and solve for their anxiety and solve for their challenges that they’re going after. And again, this is a co innovation challenge, but a co innovation, opportunity to create value at levels that that we’ve never created before.

Vince Menzione  31:55

Yeah, and I would add data tells the story, right, and the ability to show and demonstrate whether it’s in a pilot or full run mode, that partners add value to new leads to reach to scale to win ratios, all of those things are make an incremental and make our organization more effective and cost effective. Right?

Jay McBain  32:17

It does. And automation, the great resignation, which we kicked off the show talking about the future of work, all of these things are new challenges that will create new opportunities to solve one of the examples is just the bridge of human capital, as people are reimagining their own future of work, the bigger companies are hiring hundreds of 1000s of people away from the smaller economy. But in that the opportunity for managed services, the opportunity for managed security, the opportunity for solving problems in an outsourcing way, is starting to grow again, by solid double digits, where it kind of capped off over the last five years at 24% of customers who need help, that’s starting to go above 30% saying that it was a nice to have is now a need to have, where I just don’t have the capabilities, whether I’m the biggest bank in the country, or I’m just that small business that’s selling a flower shop, but down in a strip mall, you know, my needs in terms of running my business and stuff is becoming more challenged in for the industry as a whole. This is becoming a large opportunity, again to solve for. Yeah,

Vince Menzione  33:28

I’m bullish about where we’re headed with partnerships. And I hope our economy does a quick turn. I hope it’s not 1930. Again, Jay, I want to thank you you as always are an amazing guests. And it was great to have this check in make you remember the five timers club, I’m gonna get the robe ready for you for next time we get together. And any closing comments for our listeners?

Jay McBain  33:50

Yeah, absolutely. I mean, what a great time to be in this market. If every company is becoming a tech company, we’re in the right kind of place if every company is now believing that they can’t do it alone. What a great place to be in is in partnerships. If people are rethinking how these jobs take place. Like I’ll remind people that all those companies I mentioned that have hired an ecosystem chief, none of them have hired a channel chief to take that role, whether that’s by design, or whether that’s just by skills, or whatever it is. The fact of the matter is the transactional element is really, really important. But it’s 1/6 of the importance today. So understanding these new roles, we’re starting almost from scratch, people are taking jobs that have never existed before and how you build that the processes and the programs and the people the underlying technology, which we really didn’t get to the 222 companies innovating this space. It all becomes really, really exciting. Like we’re pioneers in this new decade and the opportunity to be successful the opportunity to make money the opportunity to really drive the world economy forward. comes back to this intersection point and I think your listeners here Are and really the ultimate partnership is driving this ecosystem.

Vince Menzione  35:03 You are so right. Thank you, Jay.

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