COLUMN: Where Are The AI Channel Incentives?
By STEVEN BURKE
CRN’s Steve Burke is troubled that many vendors are not changing their channel programs to accelerate AI sales growth.
There has never been a time in the history of the modern sales channel when technology smarts and vision are more important than they are now given the AI opportunity. If you don’t have the right AI solution, then you are going to be left sitting on the sidelines.
That said, you can have the best technology in the world, but if you don’t have a strong channel sales model you are simply not going to be able to scale the business to drive sales growth to capture critical first-mover advantage.
The technology and sales yin and yang brings up a long-standing debate about whether a company can be both engineering-driven and sales-driven. The fact is many companies are good at one and not the other.
What is troubling about the current AI market frenzy is many vendors are not changing their channel programs to accelerate AI sales growth. In short, they are throwing mad amounts of money at AI engineering with little or no activity in an indirect sales strategy with robust compensation incentives.
The channel, meanwhile, is moving at a breakneck pace to deliver game-changing AI solutions that leave single-vendor AI offerings in the dust.
A great example is Fulcrum IT Partners, the $1 billion-plus solution provider behemoth that acquired U.K.-based AI and data analytics pioneer Razor.
Razor is at the forefront of the AI revolution with a sharp focus on building revenue-generating solutions for midmarket and small enterprise customers, Fulcrum is in the process of leveraging Razor’s AI talent to roll out AI solutions throughout the company’s network of 12 solution providers.
C.R. Howdyshell, CEO of Advizex, a Fulcrum IT Partners company, said Advizex customers are already benefiting from the Razor acquisition and the big AI investments being made by Fulcrum in the partner network.
“This is changing what we can do for customers in both the short term and long term,” he said. “I am thrilled that Fulcrum had the vision to make that investment in AI. AI is the most significant opportunity in my 20 years in the channel.”
Given the intense customer appetite for AI solutions, Howdyshell said he is surprised that he has not seen more vendors stepping up on the compensation front. It’s especially troubling, he said, because the vendors simply do not recognize the trusted customer relationships or sales reach required to get these deals done.
First-mover advantage is critical in any big market transition, said Howdyshell. So the vendors that get their act together are sure to see a big AI windfall with lots of add-on infrastructure and services that will follow the initial sale.
Vendors are ignoring the fact that Advizex and Fulcrum—like many other solution providers—are building their own unique AI intellectual property that is going to drive the need for OEM solutions on the back end. Just which vendor offerings solution providers will deliver on the back end is going to be up to them. That’s where channel investment with programs, lead generation, market development funds and sales rep compensation is going to be a critical differentiator.
The maxim that compensation drives behavior has never been more important. Companies that invest in AI engineering and a strong channel sales model with incentives for solution providers and their sales reps are going to be the big winners. Those that think technology alone will carry the day will be the losers.