PartnerPath 2012 1

2012: The Threshold of the Next Wave of IT Growth

Part I - The Vendors’ Plans

January 26, 2012

PartnerPath 2012 2

Novice

Tolerant

Reliant

Accomplished

Centric

We Elevate the Impact of Your Partnering

PartnerPath is the only company with a holistic approach to designing, implementing and automating go-to-market models to increase impact and awareness

PartnerPath 2012 3

Research Overview

6th Annual Study

98 diverse vendors responding:

45% global, 42% N. America 50% <$500M , 41% >$1b Software & networking focus Avg. 42% revenue through

partners

248 N. American solution provider respondents (1:1 interviews)

Broad array of plans and priorities

PartnerPath 2012 4

Panelists

Paige EricksonV.P., North American Partners & Alliances

Bill CateSr. Director, Global Partner Programs

PartnerPath 2012 5

1. Market Outlook

2. Enablement Activities

3. Professional Services & Cloud Investments

4. Staffing and Organization

5. Channel Spending

Discussion

PartnerPath 2012 6

Audience Poll

What kind of year do you predict for your partnering efforts in 2012?

a. Bullish – we’re investing for major expansion & growth

b. Shifting – we’re using our existing resources in different ways to get better results

c. Renovating – we’re making major changes in our strategy or program structure

d. Coasting - we’ve made lots of investments & changes recently and will ride the wave & manage for results

e. Not exactly sure

PartnerPath 2012 7

Poised for Big Growth …?

20072008

20092010

20112012

PartnerPath 2012 8

Market Outlook

Solution providers very optimistic about 2012 revenue

Increase Decrease Remain the same

0%

20%

40%

60%

80%

100%

<$5 Million $5 - $20M $20 - $50M $50 M+

Revenue Forecast

Top Value Metrics:

1. New business

2. Competitive marketshare gains

3. Customer satisfaction

Vendor’s top metrics – new business, marketshare

PartnerPath 2012 9

Market Outlook

And access to capital restricts smaller partners’ service investment

20%of <$20M partners

But, customer decisions are still cost-driven

Fixing instead buying new

They are delaying upgrades

More virtualization/cloud solutions

Decisions are more cost driven

0% 20% 40% 60%

$20 M+ <$20 M

$20M+ Partners re: challenges:

“The economy; people are cutting back and letting go of employees”

“Getting people to spend money”

“Slow payment”

PartnerPath 2012 10

1. Market Outlook

2. Enablement Activities

3. Professional Services & Cloud Investments

4. Staffing and Organization

5. Channel Spending

Discussion

PartnerPath 2012 11

Enablement Activities

Sales skills still a big vendor priority

2012 Top Vendor Priorities

1. Ease of doing business – 46%

2. Recruiting the right partners – 38%

3. Increasing partners’ sales skills – 28%

Enhancing post-sales professionalservices delivery

Selling & marketing an annuity-based service

Enhancing technical skills with specialization

Developing vertical solution or selling approach

Selling value to LOB decision makers

Doing effective pre-sales discovery

0% 10% 20% 30% 40% 50%

2012 2011 2010

Selling LOB value is focus

PartnerPath 2012 12

Enablement ActivitiesFrom Technical to Sales - Where’s Services?

9.) In 2012, what do your anticipate your company's most highly valued partner performance metrics, BEYOND sales volume? (choose top two)

2008•Sales into key markets (horizontal or

vertical)

•New business

•Demand generation mktg.

2009•New business

•Customer satisfaction

•Specialized market focus or industry expertise

2010•Number of customers served

•New business

•Market focus/ industry expertise

2011•New business

•Technical expertise

•Competitive marketshare gains

2012•New business

•Competitive marketshare gains

•Customer satisfaction

Only 30% plan to offer Prof. Services training or

share IP with partners

PartnerPath 2012 13

1. Market Outlook

2. Enablement Activities

3. Professional Services & Cloud Investments

4. Staffing and Organization

5. Channel Spending

Discussion

PartnerPath 2012 14

Professional Services Investments

QV: Around which type of services are you most interested in cultivating partner delivery skills in 2012?

Post-sale product integration, testing & tuning

Pre-sales assessments and architectures

Hardware break/fix repair

First line tech support

Cloud or managed applications as a service

Managed infrastructure services

0% 10%20%30%40%50%

Partners Vendors

QP: Which of these services are you most interested in offering or expanding in 2012?

Partners focused on managed and cloud services

Vendors want partners to build Professional Services

PartnerPath 2012 15

Cloud Services – Vendor Expectations

Q: What will your company's positioning on offering IT as a service or cloud-related services in 2012? (check top two)

Provide services direct to end-users; use partners as resellers

Sell to large Service Providers & help them recruit our partners as channel

Provide services directly to end-user; use partners as sales agents

Sell infrastructure to partners to build services; no direct delivery

-10% 10% 30% 50%

2012 2011

Q: What primary role(s) do you expect partners to play sales and/or delivery of your cloud solution(s) in 2012?  (check top two)

Vendors trying all engagement models for cloud

Expect Partners To:

1. Resell their cloud services

2. Manage customer relationship

3. Offer pre- and post-sale Professional Services

4. Refer sales to vendor

5. Sell services for large Service Providers

6. Build SaaS apps.

PartnerPath 2012 16

Cloud Services – Partners’ Plans

Expect Partners To:

1. Resell their cloud services

2. Manage customer relationship

3. Offer pre- and post-sale Professional Services

4. Refer sales to vendor

5. Sell services for large Service Providers

6. Build SaaS apps.

Q: How likely is your company to begin offering cloud solutions in 2012? (1 = "not at all likely," and 7 = “extremely likely”)

Likely/

Very

Moder

ately

Not L

ikely/

Very0%

10%

20%

30%

40%

50%

60%

70%

80%

<$5m $5 - 20M $20-50M $50M+

Solution providers of all sizes still taking a wait-and-see attitude

PartnerPath 2012 17

1. Market Outlook

2. Enablement Activities

3. Professional Services & Cloud Investments

4. Staffing and Organization

5. Channel Spending

Discussion

PartnerPath 2012 18

Partners’ Staffing Crisis

Staffing/resources

0% 5% 10% 15% 20% 25% 30% 35% 40%

$50M+ $20-50M $5-20M <$5M Trouble finding the right sales & technical talent

2011 - 22%2012 - 31%

“The biggest challenge is growing our business with the current staff that we already have without

hiring more employees.”

“Finding capable sales people, that is really the most important factor.”

“Finding quality people in a weak economy; finding people who are educated in sales of services.”

PartnerPath 2012 19

Vendor Field Teams – Sales or Business Development?

Give less partners to cover or develop

Change compensation plan to encourage long-term partner development

Increasing the number of people doing that job

Increase their training on business & financial management issues

Give them more support thru inside sales or help-desk functions

No changes planned for 2012

0% 10% 20% 30%

2012 Vendor Staffing Plans

Actively involved in our business planning & support our growth plans

Only interested in their products and short-term sales

25%

31%

PartnerPath 2012 20

1. Market Outlook

2. Enablement Activities

3. Professional Services & Cloud Investments

4. Staffing and Organization

5. Channel Spending

Discussion

PartnerPath 2012 21

Channel Spending – Refocus on Marketing

11.) How do you generally intend to change those spending percentages for 2012? (each coded as increase, no change, decrease)

Reselling discounts

Sales influence or agent fees

Deal registration incentives

Rebates and other incentives

Marketing funds

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

18%

19%

48%

50%

54%

69%

75%

46%

44%

43%

13%

6%

6%

6%

3%

Increase No Change Decrease

PartnerPath 2012 22

Channel Spending – Refocus on Lead Generation & MDF

Add new vendors lines

Add new product lines from current vendors

Offer New, Higher-Margin Services

Hire New Sales or Technical Employees

Increase or Improve Advertising/Marketing Efforts

0% 10% 20% 30% 40%

$20 M+ <$20M

#1 Partner Plan to Increase Revenue

In annual revenues

#1 Vendor Plan to Increase Partner

Profitability

2012 2011Doing more lead generationfor / with partners 42% 60%

PartnerPath 2012 23

Join Us Next Month

State of Partnering Results:The Solution Providers’ Perspective

Thursday, February 23, 2012

Guest Panelist:

Mont Phelps,President & CEO