We need more partners with vertical specialization. Going vertical is a required part of the shift to Cloud-based services.
Horizontal partners have a customer base that they service and are more or less content with that Going vertical means going deep. Vertical partners pick one target market, such as healthcare, and build their practice around the hardware and software solutions that their vertical needs.
Microsoft is doing new things with Office to turn it into a vertical platform for Managed Service Providers (MSPs) or Value-Added Resellers (VARs). Two years ago, partners looking to get into Cloud services did well simply reselling Office 365 as part of their service portfolio, earning not only margin but consulting fees for policy development and change management. Today, Microsoft Online Services is encouraging hosting solutions partners to take this a step further by becoming Cloud Solution Providers (CSPs), selling Office 365 and Microsoft Dynamics as part of an optimal Cloud strategy to drive more revenues from SMBs through Cloud solutions.
What drives vertical growth? Marketplace demand. For example, Certified Public Accountants (CPAs) have been using SaaS technology for years, but they have not been using it to make money directly. They are using it to go in to existing and new customers with analytics that can be used as an engagement tool and platform for providing better services.
In this sense, service attach is considered very differently by CPAs versus traditional channel vendors. Channel partners wishing to focus on the accounting vertical would be well served by a vendor providing a killer demo of SaaS products that facilitate the accounting discovery process, starting with the on-site audit through to benchmarking that shows areas of improvement where business focus is needed.
In the end, it’s not just about acquiring partners with vertical specialties, it's how vendors engage with current and new partners to train them to take advantage of Cloud solutions within specific verticals. Within the most active verticals, e.g. Data Center Security, we are quickly getting to the point where partners will only support 2-3 vendors due to the complexity of the service integration. From a vendor’s perspective, that means going vertical is all about deepening and sustaining partner relationships through sales enablement tools for sales teams and partner enablement tools on partner portals that speak to specific verticals and target markets.