How Trend Micro is supporting partner transformation in the age of SaaS

How Trend Micro is supporting partner transformation in the age of SaaS

Nilesh Jain discusses how new business models will affect traditional resellers in the post-pandemic world.

Nilesh Jain (Trend Micro)

Nilesh Jain (Trend Micro)

Credit: Trend Micro

As businesses ramp up efforts to shift to the cloud across Southeast Asia, such a change in market dynamics has represented a "nightmare" scenario for traditional partners as the channel attempts to figure out their roles in the era of software-as-a-service (SaaS).

That's according to Nilesh Jain, vice president of Southeast Asia and India at Trend Micro, who noted a significant swing in customer requirements regionally. With the rise in SaaS adoption and pay-per-use business models, customers can now handle so much of the buying process that resellers are re-evaluating the way they add value to the experience.

“For the channel partners whose roles used to be the first point of contact with the vendor, and whose job it was to create an awareness and show the value of a product, deploy and sell the solution – certainly this is diminishing because customers can buy the product directly,” Jain observed.

Pay-per-use subscriptions also mean that customers can acquire products quickly and exit “even quicker”. 

“With the pay-per-use model, you don’t have to commit,” he told Channel Asia, sharing the customers’ perspective. “You don’t have to make an advance payment for three years to buy any licenses. You can just buy a solution as and when you consume. The barrier to entry and exit has almost diminished as well.”

Post-pandemic spike for SaaS

Partner concerns may not be unfounded as new research has found that enterprises continue to migrate from proprietary, licensed software to SaaS subscriptions. Technology research and advisory firm Information Services Group (ISG) found that global demand for solutions have been surging after a pandemic slump.

ISG expects organisations to increase their spending on core enterprise applications such as enterprise resource planning (ERP), human capital management and customer relationship management, which are increasingly being delivered and billed as SaaS subscriptions.

Enterprises are expected to launch major projects over the coming 12 to 18 months aimed at business continuity, centralisation, cost optimisation and greater collaboration and visibility. Moreover, organisations are expected to adopt SaaS solutions for an even broader range of applications.

“Enterprises in all industries are adapting their systems to take full advantage of digital capabilities,” said Bill Huber, ISG partner for digital platforms and solutions. “SaaS has been gaining traction for several years as companies use it as the launchpad for new digital initiatives, and we believe demand will keep growing this year as a solution for both back-end and front-end applications.”

Additionally, ISG found that the managed services market in Asia Pacific surged in the second calendar quarter of 2021, marking the best three-month period in two years. The region also enjoyed a year-on-year increase in annual contract value (ACV) of 87 per cent during the three months ending June 30, to a record US$929 million.

And going by data from pre-pandemic days, analyst firm Synergy found that SaaS spending had grown by an average of 39 per cent per year compared with on-premises, perpetual license software’s four per cent annual growth, partners who are prepared for the predicted “rampant” growth in demand may develop a competitive edge and have better chances of attracting and retaining customers.

End of ‘traditional' reselling?

Hence, with all the changes in business models and customer demand, will ‘traditional’ resellers be pushed out of the industry? 

“The answer is both yes and no,” said Jain. “Legacy partners who refuse to adapt and transform their delivery models might not survive in the long-term or have ceding margins.”

Speaking to partners through his 15 years at Trend Micro, Jain found that while the channel understands the benefits of transforming their respective businesses, “not every partner has a similar inherent capability” to change models.

Why? Multiple factors, including concern about managing ongoing customers and contracts, alongside navigating team member skill sets and a hesitation to disrupt existing business operations.

“[Their business] is not dying today – they are worried for the future," he noted. "They still have revenues today. For these partners, they should look at things they can do without disrupting operations.

"How can they create a parallel organisation or team that can help them transform gradually without disturbing the existing culture and team and provide new opportunities for loyal, committed members?”

Jain advised resellers to consider a few factors when attempting the journey to become a “customer success partner” – top of which involves a shift from being just a system integrator or solution provider. Focusing on the implementation process alone is no longer sufficient and partners must find ways to capture the entire value chain of a product or service.

Beyond deployment, partners can boost the customer experience with frequent checks on whether the product is delivering on its promises, as well as conduct proactive health check ups to show the continued efficacy of the product. 

Demonstrating a product's returns on investment (ROI) can be a gateway to get existing customers to expand their usage and possibly “sell more” features or applications, thus becoming a reseller.

For example, in the fast-growing cyber security industry, partners who want to remain relevant to vendors can adapt their business models to include offensive security technologies or security operation centre (SOC) solutions, instead of only focusing on defensive technology.

Supporting partner transformation

However, it’s always easier to talk about transformation than to get on a long-term change journey amidst all the busyness, which is why vendors like Trend Micro often offer partners a transformation program to stay focused.

This offering ties in with WeDiscover, their partner program for Asia Pacific, Middle East and Africa, which is focused on new customer acquisition.

“The first prerequisite for the program is that top management must personally invest time,” Jain said. “Number two is they must have a six-month to one-year roadmap because change won’t happen overnight.

"Transformation requires willpower, time, and effort -- much more than just money. We’ve identified a lot of partners in Singapore, Thailand, Indonesia and India to start on the three-part people, processes and technology transformation.”

The partners who have started the change journey with Trend Micro have achieved several milestones, according to Jain. They’ve started picking up orders for new services, as well as experience revenue coming from their service stream which didn’t exist just six to eight months before.

“This is where we define our unique proposition," he outlined. "We believe that if we want to do good business, we have to make sure that we take care of our partner first and they will be loyal and generate revenues for us automatically.

“We don't only talk about market development funds (MDF), rebates and incentives because every [vendor] can match those. Those incentives are the bare minimum in partner programs and doesn’t differentiate you. A vendor’s job is to hold hands with the partner and say, ‘okay, I will help you transform on this journey. You’re not alone – we're in it together’.”

Tags Managed Servicestrend microcyber securityCloudSaaS


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