Channel Partners

SEP-OCT 2013

For 25 years, Channel Partners has been a resource for indirect sales channels, such as agents, VARs and dealers, that provide network-based communications and computing services, associated CPE and applications, and managed and professional services

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COVER the New A P I Value chain Source: Apigee — employee, partner or third party — to build an app, which is consumed by end users (see diagram above). One role for the channel is in helping companies to expose their APis through platforms like Apigee's. the company primarily works with large companies, such as telecom carriers like At&t or integrators like Accenture. But it also offers a free app for others to use. A second opportunity is in developing apps for niche markets. "it's the concept of mass fragmentation," said Andrjezek, explaining that a large company is unlikely to build for a small market, but it will leverage partners to take some of the core capabilities for specific market niches. "Enablement and use of APis can help a solution provider generate revenue through services they can build on top of At&t's solutions [for example]," said At&t's Porter. Both of these opportunities require partners to have (hire or contract) development or integration expertise. "Solutions providers should obtain the technology expertise and make an effort to expose and consume APis because their end-user business customers will likely move to this model as well," Porter said. "Evolving their models will help them not only drive efficiencies and ease of business, but also potentially create new revenuegenerating services." Analyst Walsh agrees. "We believe the partners that are going to be most successful in the next five years will be those that don't just sell a product or service, don't just manage a product or service, but are performing or delivering applications that have definable business outcomes," he said. "Short of developing applications out of whole cloth, they can use APis to integrate existing tools to create new offerings that have uniqueness and deliver value to market, which also carry a different level of margin for profitability." Walsh said APis enable partners to expand their average deal size by selling multiple products at a blended margin and adding professional services fees for the development work, which carry margins of 60-70 percent. "So, you put all that together and it's a far more profitable, more advantageous model than selling products individually. On top of that it has the added benefit of being unique because you are driving toward a true business outcome for specific clients and it separates you from companies that don't have those capabilities." Khali Henderson is editor-in-chief of Channel Partners. @khalihenderson linkedin.com/in/khalihenderson 26 ChaNNel paRTNeRs SEPt/OCt 2013 "Short of developing applications out of whole cloth, [partners] can use APIs to integrate existing tools to create new offerings that have uniqueness and deliver value to market, which also carry a different level of margin for profitability." —the 2112 group'S larry WalSh MORE INFO Hear more about the channel's opportunity in the API Economy in the Keynote Roundtable, "The Cloud's Killer App," at Cloud Partners, a Channel Partners' event, Sept. 11-13 in Chicago. cloud.channelpartnersconference.com

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