260 – The Partnering Revolution: AI, SaaS, and the Future of Work

Why the C-Suite Must Rethink Everything—From Sales to Strategy—in an AI-Driven World

How to challenge conventional thinking and how executives must adapt to the current marketplace.

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This dynamic panel discussion dives deep into the tectonic shifts impacting the tech industry, particularly the role of AI and the evolution of partnerships. Industry experts Jay McBain, Janet Schijns, and Greg Sarafin challenge conventional thinking, emphasizing the urgent need for companies to elevate partnering to the C-suite and adapt to the rapid advancements in AI. The conversation explores how AI is poised to disrupt SaaS, reshape revenue models, and even alter the very nature of work. The panelists debate the balance between direct sales and channel strategies, the impact of marketplaces, and the importance of integrating partnering throughout an organization’s operating model.

The discussion also addresses the potential for AI to both streamline operations and create friction, with panelists highlighting the importance of data integration and the development of agentic technologies. The panel grapples with the promise of AI-driven efficiency gains versus the need to preserve human-centered experiences, particularly in local communities. Ultimately, the conversation underscores the transformative power of AI, the evolving dynamics of partnerships, and the critical need for businesses to embrace change to remain competitive in a rapidly evolving landscape.

https://youtu.be/OkN7nfSLuKY?si=A8q9mu-niYhFZLwL

Key Takeaways

• AI is Disrupting SaaS: The panelists believe AI is rapidly changing the SaaS landscape, potentially rendering traditional SaaS models obsolete within a few years if they don’t adapt to autonomous SaaS.
• Partnerships Need Elevation: There’s a concern that partnerships are not being prioritized at the board and C-suite level, which could negatively impact companies’ success.
• AI Will Change Work: AI is expected to significantly impact the workforce, with agents potentially replacing task-oriented roles and digital twins augmenting human capabilities.
• Revenue Models Are Evolving: AI is driving a shift away from traditional subscription models, with new pricing structures emerging.
• Marketplaces Are Important: Marketplaces are playing a growing role in shaping buying behavior and influencing which tech stacks and ecosystems are successful.
• Direct Sales vs. Channel: The panel discusses the evolving balance between direct sales and channel strategies in an AI-driven world, with a potential shift in the calculus of cost of sales.
• Data Integration is Key: Effective use of AI in partnerships requires robust data integration across different systems and platforms.
• Human Element Matters: Despite the rise of AI, there’s an expectation that human-centered experiences and local businesses will remain important, particularly in the SMB sector.

Don’t miss this opportunity to gain insider knowledge from industry leaders shaping tomorrow’s digital world. Tune in now for an inspiring conversation that could redefine your business strategy!

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Keywords & Transcript

Keywords:

AI, artificial intelligence, partnerships, channel, SaaS, software as a service, technology, business, digital transformation, agentic AI, marketplaces, hyperscalers, cloud computing, sales, marketing, C-suite, leadership, innovation, tech trends, future of work, automation, digital twins, revenue, go-to-market, partner programs, tech industry, enterprise, enterprise tech, channel strategy, co-selling, integrations, tech industry, generative AI, cloud computing, digital marketing, B2B, technology, business, software, IT solutions, partner enablement, partner management, tech partnerships, AI trends, autonomous SaaS, agent layer, data integration, revenue production, cost of sales, sales enablement, partner development, channel account managers, partner account managers, digital twin, co-pilot, autonomous CRM, partner ecosystem, OEM partnering, strategic partners, small p partnering, Big P partnering.

Transcription:

Winter Retreat Panel Audio Episode

[00:00:00] Greg Sarafin: I tell you how many people, they think more partners equals more revenue. That is completely the opposite of the truth. Fewer strategic partners equals more revenue. Everybody else should be on your platform. If you’re a platform company orchestrated in your platform ecosystem, when it comes truly to partnering, it should be a very short list.

[00:00:19] Vince Menzione: We believe this time is like no other. We believe we refer to these as the tectonic shifts,

[00:00:25] Jay McBain: all the hyperscalers in the world, if you add them all together, managed services will be one and a half times larger

[00:00:31] Intro: because it is the customer buying behavior that has created the need for all of us to rethink our models until we have data quality, the effectiveness of AI cannot be realized, and effectiveness of the partnerships cannot be realized.

[00:00:44] Intro: Can you figure out first what your purpose is and how Microsoft can support your purpose and how you can support Microsoft purpose? Now we have a partnership. It’s the ultimate partnership.

[00:00:56] Vince Menzione: Welcome to, or welcome back to the Ultimate Partner. I’m Vince Menzis and my mission is to help leaders like you.

[00:01:04] Vince Menzione: Achieve your greatest results through successful partnering. On February 20th, 2025, a small group of industry leaders converged here in Boca Raton, Florida, in this very studio for Ultimate Partners Winter Retreat. What followed was an incredible discourse on the tectonic shifts and the rapid change we’re all seeing as partners.

[00:01:26] Vince Menzione: I’m joined on stage for a panel discussion. With Jay McBain, principal analyst at Canals, Janet Schein, the CEO of JSG Group, and Greg Raffin, vice Chairman Emeritus at ey. If you weren’t able to join us in person or on the live stream, we’re bringing this incredible session to you here. This is my gift to you.

[00:01:50] Vince Menzione: All I ask in return is that you tell your friends, subscribe. Consider joining the Ultimate Partner community and hopefully joining us in the future at an Ultimate Partner event. I hope these sessions provide you the learnings you need to continue to achieve your greatest results. And now here to this amazing session, I would say Eco somewhat.

[00:02:12] Vince Menzione: I just want frame the conversation here. Janet sits on a couple of boards. I’ve asked her to join the conversation ’cause we wanna learn not only what partners need to think and do differently. But what do organizations all up need to think and do differently? Greg has led the largest, I would say, one of the largest ecosystems in the industry at ey, taking it from under a billion dollars to 11, 12, maybe even more billion dollars a year in annualized revenue with a really true partnership strategy.

[00:02:41] Vince Menzione: So we wanna get their perspective here in the conversation. Uh, I’m going to start with a little bit of a softball. I want to, I want to go back to these tectonic shifts. Jay, Jay just shared a whole bunch of new information with us. Anything that was most striking from that conversation with Jay? Just now?

[00:02:57] Janet Schijns: I think that,

[00:02:59] Vince Menzione: just let it, yeah, let it, let’s see. Yep. You’re on. Everybody awake now? Okay, good.

[00:03:05] Janet Schijns: Uh, I think that the big thing that struck me in the conversation is how few senior leaders are elevating partnership to the board and the senior level. Yeah, I, I see instances of it. I’m on some of those boards, but then I see a lot of instances not of it, where the, where the channel or partner, um, community and leader is being shoved down in the organization rather than risen up.

[00:03:29] Janet Schijns: And I think this is the biggest risk to that Fortune 500 list. You wanna know who’s gonna be off that Fortune 500, less than 20 years, the people who didn’t get to that, elevated to their C-suite. And truly, if you’re not a company whose CPO is in line to be your next CEO. You’re gonna be off that list.

[00:03:51] Greg Sarafin: I, I’m actually gonna hit on the AI point since my 88-year-old father asked me about ai. Every time I talk to him, see your earlier question. I started laughing. I’m like, okay, I gotta talk to Pops this weekend. Um, here’s what I’ll say about ai. It is, I, I do not believe we’re over indexing on ai. In fact, I believe many SaaS companies are under indexing on it.

[00:04:12] Greg Sarafin: I believe SaaS as a species will cease to exist in five years. Unless it makes the pivot to autonomous SaaS, right? So building the agent layer. If you talk to Christian Klein about his strategy at SAP, you saw the BDC announcement last week with the partnership with Databricks. It is fundamental to SAP and every SaaS vendor on the planet large and small, that they get you to build the autonomous layer in their platform.

[00:04:37] Greg Sarafin: Otherwise, you’re gonna build it in Microsoft or Hyperscaler or on video. And then they’re going to become a database in the future because the value capture will be in the agent layer, not in the legacy system of record SaaS platform. So that to me is if I’m a SaaS company, that is the thing I’m thinking about.

[00:04:57] Greg Sarafin: What is the autonomous version of me? And then ultimately, what is the services on software version of me, which is the ultimate realization of like what I call the convergence between the SAS market and the professional services market. I could wax poetically about what’s happening in professional services.

[00:05:11] Greg Sarafin: Yeah. But I’ll spare you all that one.

[00:05:13] Vince Menzione: Well, we’ll go there. We’ll go there. Okay. But, but I wanna clarify in that, ’cause I, I do think that’s an interesting point because today we act, we, we feed the data into the CRM or ERP system, right? Very manual process. And then we act on the data, or we ask, we ask the system to tell us what to do.

[00:05:30] Vince Menzione: So how, so how does the agent ai, so the entire,

[00:05:33] Greg Sarafin: so the entire SaaS industry exists. To allow really inefficient humans to do things reasonably efficiently and very large multi human business processes. And how does it do that? It creates these little tasks and turns all humans into task reps, right? When you, if you have the misfortune of most of your days spent on a so platform, you’ve had that experience.

[00:05:54] Greg Sarafin: It’s horrible. Right? So here’s the problem for the humans in that equation. Yeah. Task rabbits can easily be replaced by agents. Yes. Yeah. That is the truth. And they don’t have to be particularly smart agents. They’re, they’re really an agent based on an R three at this point, or a, uh, you know, a Gemini two oh is probably sufficient.

[00:06:15] Greg Sarafin: It’s equivalent of maybe a college grad. Uh, to be able to do those types of tasks, rather things. Where it’s really gonna get interesting is in three to five years as that adjunct layer gets smarter and smarter, and now all of a sudden the intelligence about the finance function, facts function, whatever it is.

[00:06:31] Greg Sarafin: Ends up in that layer and the old legacy SaaS database and all of the, you know, configuration files and all the hard-coded workflows and everything else, that’s meaningless, right? All that really matters is there’s a place to persistent data so it can be audited and validated and so forth, right? So it’s going to change tremendously.

[00:06:56] Greg Sarafin: It’s gonna start by replacing the humans that are acting as task rec. Rabbits and the SaaS platforms, and it will ultimately be the margin capture in AI will land in two places. It’ll land at the agent layer and it will also land at the base of the stack. It’ll land in what we call the hyperscalers today.

[00:07:15] Greg Sarafin: Nvidia will join them, I think XAI will probably join them, maybe Oracle will. Mm-hmm. And you’re gonna have these platforms where, from the data center, floor silicone, all the way up to the top layers of the stat. It’s completely owned by these major players and you’re gonna run your workloads on those stacks.

[00:07:32] Greg Sarafin: Right? So it’s a very dystopian world. Yeah. Uh, it’s gonna feel like we have five different purveyors of IBM mainframes. Uh, but that’s the world that we are betting on in terms of how we think about how our business is gonna evolve.

[00:07:46] Vince Menzione: So sas, SAS will go away in five

[00:07:47] Jay McBain: years. I’ll, I’ll say that, you know, that the fight that the public fight in the last couple of weeks between Mark Benioff and Satcha at Microsoft has been about.

[00:07:55] Jay McBain: Yeah. You know, software kind of ate the world. And then AI eats software. It’s not that eats the software, it’s eating the model. The idea when you don’t have as many tasks people out there is you don’t have to buy as many subscriptions. And when Salesforce starts charging you $2 per outcome or per conversation in Agent force, that’s a different model.

[00:08:16] Jay McBain: But if you’re already spending $150 for the subscription and then you start looking at your bill and you’re getting the $2 hit. At, at some point, you know, wall Street, you’d love to say Wall Street, we’re gonna charge people $300 per person. Yeah. And it’s just not gonna happen. The subscription prices are gonna start to come down to the people that could actually go in and create reports and do analytics, do intelligence, but that’s, you know, 10% of people that might ever need to go in and log in.

[00:08:41] Jay McBain: That’s the head of, of the model, the ui, ux on top. What, uh, Greg is, is talking about, and it’s absolutely true, is that 90% of people are not gonna need that head. Because your copilot or your agent force or whatever agentic AI piece is not gonna come log in and pretend to be you. It’s going in the back door.

[00:09:00] Jay McBain: There’s the data, but it’s not gonna know what to do with the data. I mean, with 250,000 pieces of SaaS out there, there’s no way that these big models are gonna understand how the data is structured and how, how they could use it. Yeah. So the workflows that you build on top of the data layer, you know, if you own a channel software text, you know.

[00:09:20] Jay McBain: Stack company, you’re gonna, well this data and this data and this data we connected and this is the value. And boy is that valuable to the sales person, the marketing person, the CX person, the product person. And that’s the co-pilot’s gonna talk to a co-pilot and behind the scenes be able to bring that value at the right time.

[00:09:37] Greg Sarafin: They all really blow your minds. Imagine a world where you as a manager have 10,000 agents on your workforce, and then you have a digital twin of you. You can call it a copilot if you want, but it’s really your digital twin that is the interface between you and those 10,000 agents because you as a human being, cannot manage 10,000 agents, but your digital twin can.

[00:09:58] Greg Sarafin: Your digital twin can then talk to you at human speed, which is a fraction of the speed of talking to those agents where you need to make a decision or you need to be aware of something. Right. So this is a business architecture that’s quite, uh, interesting. Uh, and, uh. We can talk about this at the bar tonight perhaps.

[00:10:16] Greg Sarafin: ’cause I don’t think you want to take the conversation this direction. I you’re, anyway, I probably don’t wanna go there. I would just add

[00:10:20] Janet Schijns: one thing. Yeah, go ahead. I think if you talk about where your C-suite and your board is having the conversations, they were promised something by the industry. They were promised by Microsoft and other 30% reduction in staff.

[00:10:33] Janet Schijns: That’s what they were promised as the outcome of ai. So as we talk about agents and we talk about digital twins and we talk about everything else, there is a check. That was written for technology that the C-suite and the board are not yet seeing a payout for towards that. Hey, we get there, we buy all this meta stuff, and then nothing happens.

[00:10:53] Janet Schijns: Buy all this AI stuff, right? What’s gonna happen next? This is where the people come in. The people are resisting the change at certain levels, particularly in the partner ecosystem. As an example, if you have 375,000 partners, why isn’t the first place you look for a digital twin? Your channel leader? Yeah.

[00:11:11] Janet Schijns: Your channel leader can’t possibly scale, right? But that’s not the conversation they’re having. They’re having conversations about, hey, especially we could cut 30% of accounting. So that’s again, where you need to change that conversation at the C level in the company to make sure that you’re doing the right thing.

[00:11:27] Janet Schijns: It’s gonna magnify growth rather than just cost savings with ai. And I think that’s where the break is right now.

[00:11:33] Vince Menzione: So how do we solve for the break? Yeah,

[00:11:35] Janet Schijns: well, I would, I was in the channel. I would put together a group of people, you know, think of class action lawsuits, but we’re not gonna sue. Um, I would put together a group of partners and get them a way to communicate to your board and your C-suite.

[00:11:47] Janet Schijns: Their voices are being masked, their voices are being shut down. They’re being treated like transactional partners and they’re not. And, and so all of the C-suite and the board is relying on a group of people that don’t know anything about partnering as they make these large decisions. And so they’re bringing in experts that sell the technology, but those experts that sell the technology are telling them things that won’t even work for the actual go to market model we have in our own environment.

[00:12:17] Janet Schijns: And so if you’re a channel leader listening, if you’re a partner listening, start reaching out to the board. Start making your decisions about who you partner with by who they have on their board. I look at the boards of some of these companies. They have no one that even understands sales or marketing, much less the channel.

[00:12:33] Janet Schijns: They’re hiring channel leaders, partners, CPOs, that have no partnering experience because they went to college with them and they’re friends with them. You need to have the discussion. You need to take a Michelle McBain, and I’m looking at her right here in the front row, who’s an amazing channel person and, and have her voice heard.

[00:12:51] Janet Schijns: Have my voice heard, have Jay’s voice heard. Right. Have all of Vince’s voice heard. Get the voices heard by the C-suite and the, and the, and the entire board, or honestly, I think they’re gonna go in the wrong direction. Yeah. Uh, and, and it’s gonna be very damaging. And, and again, I’ll repeat myself from earlier, those are gonna be the companies that fall off the Fortune 5,000, much less the 500.

[00:13:11] Vince Menzione: I I do think there’s a skills gap and I’ll, a massive skills gap. And I’ll, I’ll look at the end there. Greg is a, is an example of somebody who brought financial chops into the board, right? Mm-hmm. And I think that one of the challenges we talked, we’ve all talked about this conversation. That the, the path to chief partner officer today looks like somebody who was a channel leader, who became a channel chief, who just took on the title chief partner officer, maybe has some cred in at the C-suite and maybe doesn’t.

[00:13:39] Janet Schijns: Right. Right.

[00:13:39] Vince Menzione: And that I think is, I think that’s one of the biggest challenges, is that nice

[00:13:42] Janet Schijns: titling change and will make you believe that you’re important. And even though we do 80% of our sales through you, you’re not really important. And that’s the conversation you need to push that conversation. If you’re a partner listening to this, you need to push that with your top vendors, suppliers, ISVs, and if you’re a ISV vendor supplier, you gotta push that with your C-suite, push that with your board.

[00:14:02] Janet Schijns: You are not listening. You’re, you’re not, and you’re running past your partnering and it’s gonna, it’s gonna really damage these firms that don’t really adapt because AI is, is great, but only if you apply it to the right place, which is your predominant go to market, your channel.

[00:14:16] Vince Menzione: I know Jay and I had this conversation, maybe it’s two years ago now, right?

[00:14:19] Vince Menzione: About the the new skill. Do you think we’ve, we’re seeing the new skill set apply generally? Because I don’t, I don’t know if I agree we have

[00:14:28] Jay McBain: No, I agree with Janet and I spent a lot of time again Yeah. Boards. Yeah. And you know, looking and they’re very impressive people, you know, getting called into these big reseller boards, you know, there’s the head of United Healthcare, there’s the head of Boeing.

[00:14:40] Jay McBain: I mean, these are people with ridiculous resumes. And really rich and famous and, and everything else. And I’m looking around the room going, you know that, that’s different. I go back to Janet’s originally original concept. And this isn’t just the technology industry. These are all 27 industries grappling with this.

[00:14:58] Jay McBain: Yeah. Uh, one of the things that jumped out to me like two years ago when Apple was doing an iPhone launch, like later in the broadcast, you know, Tim Cook kind of stood up and said, do you know that 79% of people today will not buy a car unless it has Apple CarPlay? I’m sure he meant to say Android Auto as well.

[00:15:15] Jay McBain: But imagine, you know, just switch gears and you’re in this $3 trillion auto industry, you know, 63 brands, 365 cars. Yeah. But it’s 120 year old industry. You’re just taking over a dealership from your great great grandparents or passing it down and because of a tech integration you’re missing, you’re about to lose four fifths of your buyers.

[00:15:36] Jay McBain: So this isn’t just SaaS companies, right? This isn’t just marketplace. This isn’t the rich getting richer. This is every industry to Greg’s point has to lose kind of this ui ux on top. And I want my copilots talking to my pharmaceutical company, my pharmacy. I want them talking to my, um, all the industries I work in, um, or live in every day.

[00:15:59] Jay McBain: And that’s part of every board. Yeah. Great. And I’ll say that there’s a 90% miss. Yeah. In terms of people that will be able to enunciate that and bring it up as a topic of. Critical importance, tectonic shift, inflection point is the best and quickest way, you know, into a board absolute or into a C-suite.

[00:16:17] Jay McBain: And right now is absolutely the time.

Yeah.

[00:16:20] Jay McBain: Yeah. And I would

[00:16:20] Janet Schijns: say, I know board seats are at a, you know, there’s not a lot of board seats available. A board advisor, you know, it just get to the point you saw J slide had 117 consultants in it. There you go. 117 people plus the top channel chiefs. That could be an advisor to your boards.

[00:16:34] Janet Schijns: Absolutely. And I think the skill gap is just widening and it’s, it’s concerning.

[00:16:39] Vince Menzione: And why isn’t it happening?

[00:16:40] Greg Sarafin: I think it’s because we continue to conflate small P partnering with Big P partnering. Yeah.

Mm-hmm.

[00:16:47] Greg Sarafin: So small p partnering is partnering equals go to market equals channel one equals effectively indirect selling, right?

[00:16:54] Greg Sarafin: Um, we forget that not every company is a platform company, but if you’re a platform company, you will not be a success. And by the way, platform not just top out, you know, my favorite platform company is Rebi. Go to Home Depot. Bloody thing is a huge platform. It’s a battery platform with an amazing assortment of tools.

[00:17:09] Greg Sarafin: And I’m a tool geek, right? They’re auto, Tesla is a platform. Yeah. Right. So you know, generally in this world, you’ve got platform business models and vertically integrated business models. There’s probably an oversimplification, but if you’re running a platform business. Partnering is not just about channel, it’s also about co-innovation.

[00:17:27] Greg Sarafin: It’s about co-investment and it’s about extending your platform through an ecosystem of partners and then being an outstanding orchestrator of that ecosystem, right? Which to me is really the center of gravity for partnering. ’cause that also then connects you back to the other side of partnering, which everybody forgets about, which is OEM partnering.

[00:17:49] Greg Sarafin: Right. I drive my car, I’ve got my Apple car play, but I’ve got my RO seats. I’ve got my Brembo brakes. Right. This is not a new concept, folks, right? Right. But we’ve somehow, we’ve made partnering small p and I’ve been in many organizations where they have multiple partnering functions, not talking to each other, not realizing they all should be connected to maximize the flow of value through that value chain, and also reducing the number of partners they have.

[00:18:13] Greg Sarafin: Because I gotta tell you how many people, they think more partners equals more revenue. That is completely the opposite of the truth. Fewer strategic partners equals more revenue. Everybody else should be on your platform. If you’re a platform company orchestrated in your platform ecosystem, when it comes truly to partnering, it should be a very short list.

[00:18:31] Greg Sarafin: So to me, that’s the issue we have and we’re not explaining that to boards. Yeah. And we also frankly don’t have like a CPO if I said, okay, what is the role of A CPO and what is the career path to CPO? And I asked 10 smart people, I would get 10 completely different answers guaranteed. Maybe 11. ’cause one would change their mind extremely.

[00:18:50] Greg Sarafin: Right? I pick that one. If I asked 10 PE those same people, what’s the role of A CFO? I get very similar answers, both in terms of the role and the career path,

[00:18:58] Janet Schijns: and you know what that says to me. We don’t really have cpo. We don’t have CPOs. Right. The CPO isn’t actually a member. That’s right. The C-suite.

[00:19:04] Janet Schijns: It’s a glory title we gave because we thought it might raise our throughput production in the little P by 10 or 15% to have a CPO. Ooh, maybe they can sell a little bit more next year. And I have to tell you, if you’re working with or working for a company, that that’s how they’re talking about the channel.

[00:19:18] Janet Schijns: I like that little PI usually call it transactionally. Um, if that’s how they’re talking about the channel, you should run because your career is at risk. If the channel is about just distribution your, your career is at risk. That company’s going nowhere. It really should be integrated into the fabric of your company.

[00:19:36] Janet Schijns: Where I would say back in the day, there was a quote from the head of Kellogg and he said, you could take everything we have and leave me the brand and I will survive. And I would say, now you can take everything I have and leave me the real partners and I will survive. And that’s the mindset that they need to get at the top of these companies.

[00:19:54] Janet Schijns: Yeah.

[00:19:54] Greg Sarafin: Which they don’t. Speaking of channel. Go ahead. Just one last point on channel. And channel is kind of like super sweet sugar cereal. Mm-hmm. Right? It tastes really good and it has no nutrition. In fact, it’s making you sick. Mm-hmm. Okay. For the most part. Mm-hmm. Uh, everybody needs a little cereal now and then, don’t get me wrong,

[00:20:15] Janet Schijns: yes.

[00:20:15] Janet Schijns: Sunday morning. There are two.

[00:20:16] Greg Sarafin: There are two issues with over indexing on channel in your enterprise. The first is, um. You lose fidelity on your revenue forecast and if you’re a public company in particular, but even if you have, you know, LPs and gps that really care about your business performance on a quarterly basis, not being able to forecast your revenue because too much of your revenue is un forecastable is a really bad idea.

[00:20:38] Greg Sarafin: Second thing is, particularly if you’re in an industry like tech, where it’s actually not the first sale that matters, it’s the renewal that matters. Selling through the channel typically has a much lower renewal rate than selling direct with customer success. Right. So your, your channel feels good because you’re moving some of your cost of sales.

[00:20:57] Greg Sarafin: You’re making it invisible as cost of revenue, as effectively a discount. It’s only two or three points of discount, but then you add a bunch of cost of sales on top of it because now you’ve got a whole team that’s trying to define with those wooden sticks what the actual revenue forecast is gonna be from each of your channel partners.

[00:21:14] Greg Sarafin: Right? And we’re heading to a world where the productivity of direct sellers is about the 10 x. Right, because autonomous CRM, what is it going to do is gonna eliminate all of that layer of sales enablement. People that suck at their jobs and can’t enable pretty much anybody, and are a huge drag on expense ratio, expensive cost to sales or sg and a to revenue.

[00:21:37] Greg Sarafin: And it is going to now create sellers that actually you can expect to have 10 times the quota that they had yesterday, right? In three years, let’s say. So you actually need to be thinking about. Channel as don’t eat too many of those cocoa puffs, particularly given that you’re about to see a step change in the productivity of your direct sellers in terms of their ability to address the market for you.

[00:21:59] Greg Sarafin: Then I’ll stop. I’ll just, uh,

I’m gonna jump in on

[00:22:02] Greg Sarafin: that. I thought that might get right. I thought that might get right. It’s

[00:22:05] Jay McBain: provocative, so I’m gonna disagree with the.

[00:22:15] Jay McBain: To determine how their customers buy your category or your industry dictates to you. Uh, I mentioned cybersecurity. If you went with your advice and ignored the 91.6% of customers who bought through channels, you’d be competing in 8% of your tam. If you sell PCs, 70% are bought through Larry and the white van.

[00:22:36] Jay McBain: If you decide that Larry and the white van’s not good for you, you’re competing with Dell for the 30% direct. Market by market. There’s 2200 categories on G two crowd of categories that are all predetermined by your buyer and procurement and how it works. Yeah. So your channels, you wanna participate in a hundred percent of your TAM if, if you can.

[00:22:57] Jay McBain: And you wanna participate in all the ways that money changes hands, whether it be indirect, marketplace or direct. And that’s one muscle. That’s small. P partnering. That’s the part I agree with. The bigger P partnering is, I’d love to partner with the other six people That’s right, who are doing the co-selling co-marketing, who are doing the consulting design, who are doing implementation integrations.

[00:23:18] Jay McBain: That’s right. Who are lowering our cost to acquire the customer who are building bigger deals and closing them faster, and who get us a customer for life. If I can take those six and equate them back to my revenue targets, which is what boards and CEOs and CFOs care about, and do that in a repeatable, reliable way.

[00:23:36] Jay McBain: That is the big P partnering. And by the way, every company has to do both.

[00:23:42] Janet Schijns: Yeah. So, hey, I’m gonna, so I don’t know if you guys think I should sit between them or like.

[00:23:51] Janet Schijns: I’m gonna, so here you go. I’m gonna do the thing. I’m gonna reconcile the two views, right? I think they’re both, I think they’re both right.

Yes.

[00:23:58] Janet Schijns: So on on the one level, we are seeing a seed change in reliability and how partners, because many of the partners are not commercializing the offer, it’s very hard to figure out, particularly in the enterprise and large multinational space.

[00:24:12] Janet Schijns: When the deal’s coming in, if you’re not working it. That’s why folks like I’m looking right here at Partner Tap at Cassandra, that’s why they’re having so much sex success because that integrated selling model is how people are really understanding how they’re gonna get the master kind of massive opportunity from enterprise by doing it with direct and indirect as the old school thing would say.

[00:24:31] Janet Schijns: But then to Jay’s point, um, if you don’t do that, if you don’t partner with partners, um, you start to have conversations that sound a lot like funnel reviews. At the C-suite, which means, again, run from the company ’cause they don’t understand partnering. Because partnering is about integrating it through the fabric of your product development, of your enablement, of your sales, right, of your innovation, of your compliance, of your governance throughout the organization.

[00:24:58] Janet Schijns: It because it’s 90% in security, it ought to be a core element of your operating model. And if you have flow charts in your company, I always challenge people with this and those flow charts don’t show where the partner tap partner spot is in every single area. Then you are not in partnering, you are in

[00:25:15] Vince Menzione: channel

[00:25:16] Janet Schijns: to my friend’s point here, channels.

[00:25:18] Janet Schijns: So you’re

[00:25:18] Vince Menzione: eating Cocoa Puffs, you’re eating Cocoa

[00:25:20] Janet Schijns: Puffs, and you’re gonna be disappointed every quarter because unless you have a, a small business kind of package that you know, you get your volume and that kind of even got your, your forecast, you’re being disappointed every quarter. You’re never gonna able to what’s coming in.

[00:25:34] Janet Schijns: And they’re friends and they’re gonna hug later.

[00:25:38] Jay McBain: I remember sugary cereals were always part of a nutritious breakfast, but you had to have the orange apple and the juice. Lucky Char with all the other stuff that made it part of a nutrition breakfast. Correct? Correct.

[00:25:48] Janet Schijns: You had, you had the juice. Yeah.

[00:25:51] Vince Menzione: Well, I also think that ignoring the business model in this conversation where Greg is.

[00:25:57] Vince Menzione: At the very top of the pyramid. Right. Large enter mostly large enterprise, maybe some mid-market. And I’m, I’m not ignoring the other fourth ’cause you’re right on the channel versus partnering piece. Absolutely. But also as you get higher up in the stack and you have the luxury, I would say, of resources attached to each of those customers that are driving the, the executive level conversations.

[00:26:20] Vince Menzione: It’s different than a channel that may or may just come in and accelerate or juice your revenue for a period of time. Right, right, right. Yeah. And I

[00:26:27] Greg Sarafin: do tend to buy as big, right in my thinking, right? ’cause I’ve been a big company for a long time and my statements are not meant to address every market segment.

[00:26:35] Greg Sarafin: And I do agree with Jay actually, that there are certain companies in certain market segments for, in today’s market, must address the market through channel. They have no choice. I’m also suggesting that the way the world works today and the way the world’s gonna work in five years may be very different.

[00:26:50] Greg Sarafin: And so I’m front running that a little bit and there’s no way to know if I’m right or wrong. I’m just telling you the bet we’re making. Yeah. Yep.

[00:26:57] Vince Menzione: Let’s, that makes sense. That makes sense. Let’s dive in on that. ’cause I do, you know, you, you, you touched on a AI and AG agentic, and I’d love to see how we talk about this.

[00:27:07] Vince Menzione: Like for the hyperscalers in the room. How are we thinking about partner development managers? How are we thinking about partnering in general? We have so many, we’re still using Excel spreadsheets for crying out loud, and we’re doing funnel reviews and we’re having conversations with account executives that are going nowhere because they’re overwhelmed with what they have to go drive with partners, with a group of partners.

[00:27:29] Vince Menzione: Again, for every one of their customers, they have to rely, they have to talk to at least seven seats. They have to have all these conversations. They can’t really navigate it. How does AI help us improve that? Like how do we, how do we get better at that through ai?

[00:27:43] Greg Sarafin: Uh, I’ll tell you, uh, the perspective that we, we have right now, uh, we believe that we and a lot of our large clients, but I would extend that to any, any customer honestly need to get serious about taking the people cost out of revenue production.

[00:27:59] Greg Sarafin: Yeah. Uh, revenue production either needs to be through marketplaces and other automated mechanisms of. Commerce, uh, or it needs to be highly productive sellers, either in your direct sales force or in some channel partners direct sales force. Right? Uh, the cost of sales enablement at most companies, including mine, is outrageously high when you then index it to the benefit you’re getting.

[00:28:25] Greg Sarafin: Mm-hmm. Right? I can tell you that I run a, an awesome team of partner development and partner operations people, most of whom I’ve moved offshore. Over the years and then put ServiceNow and other technologies underneath of them to automate all their, I’ve made them TaskRabbits, I suppose. Yeah, to my earlier point, uh, because there was no off the shelf software, we had to build all our own, uh, to satisfy the needs of our business.

[00:28:51] Greg Sarafin: That has been reasonably successful. But at any given time, I can only address the needs of maybe 3% of my total sales force across the 160 countries that we operate in. And it is not sufficient. It is too expensive for the benefit we’re getting, and it’s not scalable. I need something I can scale at zero marginal cost to cover 100% of every selling opportunity to any given time, whether it is a partnering selling opportunity and or a selling opportunity where I need to have a deep understanding of a solution that we’ve developed, maybe with a partner, maybe not, right?

[00:29:28] Greg Sarafin: So to me, the answer is. All of sg and a that is not direct revenue. Production needs to move to agent capabilities. Mm-hmm. To enable all of sellers and our average bag color should, should have ultimately have 10 x the quota they have today if we do it right, that is our, that is our view and that is our bet on the future of.

[00:29:54] Greg Sarafin: Selling it, you

[00:29:55] Janet Schijns: know, at least in our shop. Yeah. And we’re seeing the same thing in partners, right? Yeah. The larger partners across the, whether an SI and MSP of, of Iron work or var, right? Um, they’re starting to look at AI and where it can eliminate friction in the system, um, more than where it can eliminate headcount.

[00:30:10] Janet Schijns: So instead I wanna repurpose that headcount to build the next great product to sell the next great product to go 10 x um, you know, our revenue, the issue is. That everybody’s doing their little piece products. It’s kind of like when we started putting things in the cloud. Everybody, every single department in a company bought an extra large cloud.

[00:30:28] Janet Schijns: Um, they didn’t really need it, but they bought it and they all swiped credit cards and usage rates were going crazy and right. And all of a sudden, at one point in time, the CFO was like, what is happening? Why are our IT expenses so high? Um, and then they consolidated back into centralized it again, right?

[00:30:44] Janet Schijns: We’re gonna, we’re gonna manage all the cloud. We’re seeing the same thing starting to happen now with the AI journey across, um, in the partner community, particularly where a lot of pet projects have happened. Um, and they’re not really what’s important. And I’m gonna use a specific example that’s on that chart.

[00:30:59] Janet Schijns: You shared the telecom industry. I was the, you know, chief channel officer at Verizon. Um, there’s a massive expense. To run pipe if you actually want an enterprise to have all this great stuff we’re talking about ai, cloud service, the whole nine yards to actually work, it actually has to connect. Um, and so that has been really left behind to a certain extent because the cost is so high, it could cost you $5 million to put a vertical riser in a corporate building.

[00:31:26] Janet Schijns: Right. And so what’s happened, innovators have come around like broadband, GPT, who have said, you know what? We can do all the build function up until the person puts the pick in the ground, right? To dig the permits, the sizing, the everything with with ai, and that’s going to not eliminate hundreds of installers and hundreds of engineers.

[00:31:49] Janet Schijns: It’s going to mean that rather than waiting nine and a half months on average for an enterprise network. You are going to get an enterprise network in a month. Think about what this does for your level of innovation. So it’s not just a snazzy, pretty hyperscalers and ISVs that are gonna use ai. It’s the the toasters, right?

[00:32:08] Janet Schijns: The, the plumbing and it’s gonna get faster and faster. And that pace of speed is what we’re all gonna be measured on. Are we as fast as ai?

[00:32:16] Jay McBain: Let me, let me do a real life channel example, uh, in agentic ai. So in the 28 measurable moments. That a customer moves through from, I have a problem to making the purchase and, and how to measure those.

[00:32:29] Jay McBain: In today’s world, uh, we live as the products on the internet. So the world of buying buyer intent data, those early moments. And what did they search for? 81% of customers start on Google or now, you know, chat, GBT. Um, where did they move from there? What did they find on Google? Well, they found an ebook, they found a podcast.

[00:32:50] Jay McBain: So it’s those early moments. You know, both Google and Facebook have created $6 trillion of value on us being the products and the internet. When you speak in your kitchen, Alexa overhears you and Facebook serves you up an ad two minutes later. That’s 6 trillion of value on the stock market.

Yeah. Yeah.

[00:33:06] Jay McBain: So we kind of all went to elections last year, 45% of the world and 90% of the incumbents lost.

[00:33:14] Jay McBain: And we kind of told our, our elective uh, representatives we’re done with that. So the end of the cookie. It’s creating the biggest change in those 28 moments ever. Another tectonic shift, right? So Google goes and Creeds version two of the cookies, goes to sell it to the European Union, which are the toughest people to sell to, and failed.

[00:33:33] Jay McBain: A week later, they lost an antitrust suit in the us. So this was kind of the final, you know, moment. So when you start to look at those 28 moments, especially early, you start to say, well, how am I gonna get to them? Who owns the moment and how do I partner with them? So you use Partner Tap as a perfect example, which is perfect agent,

right?

[00:33:51] Jay McBain: Not only looking at the two CRM systems for SQLs, but looking at the marketing automation systems for uh, M qls. That’s right. But if I could go and have an agent say, you know, Hey, they, you know, found your ebook, they listened to your podcast, they come to my website and they actually came to my event. You know, just between the two of us, we found four of the first 10 moments.

[00:34:11] Jay McBain: Yep. Boy, would it be a great time either digitally or physically. Ushering the customer through the next 18 moments to make sure that we both win. Yeah, absolutely. And in this new world, it’s not just partner Tap. Now I, I have to have an attribution tool. I have to have my, uh, to, uh, my, um, through channel marketing tool.

[00:34:28] Jay McBain: I have to have my deal registration tool, my opportunity passing my LEAP app. So here’s like five or six things that I can’t go log into all six and go figure out for a particular deal. All the stuff that’s happening. But boy, could my copilot or my agent go and tap into all these places, put it like in cohorts

[00:34:46] Janet Schijns: and Perfect.

[00:34:46] Janet Schijns: Yeah. Yeah.

[00:34:47] Jay McBain: Um, scenario of, oh my goodness, I’ve now seen 14 of the first 28 moments. I know exactly the customer who they are. I know exactly what they want, and I actually know the seven layers of the stack and the seven people that would be perfect for this. Let me orchestrate the 14 things going on, and let’s go win more deals, but I can’t do it without these layers.

[00:35:09] Jay McBain: And I just, in the headless world, I gotta have this data and, uh, be able to execute, you know, within milliseconds.

[00:35:17] Greg Sarafin: I’ll also, uh, use a real example. I’ll use us. Uh, we’re working right now with, uh, several of our largest partners and a third party, none of whom I’ll name, uh, at the innocent. But, uh, so here, here’s, here’s the thing we’re solving for, um, in order to replace partner development.

[00:35:38] Greg Sarafin: And make it scalable. I wanna say it differently. To make partner development scalable, we need to be able to scale it with ai, not with people. It’s not scalable with people alone.

Mm-hmm.

[00:35:48] Greg Sarafin: Um, now I could build a bunch of AI on my side, but in order for that AI to really work, it also has to be able to then do work.

[00:35:59] Greg Sarafin: And my partner’s systems of record as well. Well, guess what? My partners love me, but not that much.

Mm-hmm.

[00:36:05] Greg Sarafin: They’re not gonna let me go trade, send around in their patch. Right. And by the way, I have the same view of them. So what we’ve determined is we actually need to work with a trusted third party to sit between us to build the agents to our specifications.

[00:36:18] Greg Sarafin: That’s right. And those agents can work both sides of the street, literally. So they understand all my business rules and all of my constraints and, and how to access my systems of record, including my CRM, uh, et cetera. And then they also understand the same thing about the other sites, and they also understand the translation later.

[00:36:36] Greg Sarafin: And they also know how to enable my sellers and their sellers to work together, even though they’ve never, they’ve never, never done that before. Right? So that is really where we’re hyper-focused right now, is how you create that sort of. Agent force to use Benioff’s term that works both sides of the organization, but protecting my data from them and their data from me, right, in order to accomplish and then really take the cost out and make it infinitely scalable to do partner enablement.

[00:37:05] Janet Schijns: I love that. And that sounds too heady. If you’re listening, uh, here and the audience are on, you’re like, that seems we’re talking headless. That seems like a lot. Okay. But it seems like a lot to do. Right? Um, the simple thing I’ve encouraged people to do is go out and look at the seven or eight. Big partners that you have in your stack, right?

[00:37:23] Janet Schijns: You know, maybe your checkpoint for security. Who else is in your stack that a partner would sell? And I know the guys from Unifier are here. They’ve built a cool platform as has Partner Tap, to let you actually integrate with those other parties,

the third parties,

[00:37:39] Janet Schijns: right? And, and maybe you start there, right?

[00:37:41] Janet Schijns: Maybe you start at the very practical, like, hey, if a partner just didn’t have to. From a go to market transactional standpoint, register a lead in nine platforms, maybe that would get us more business. Um, you know, and maybe it would because maybe you’re kind of a pain in the neck to deal with. Um, and so those kinds of platforms that are just saying, Hey, let’s make it one motion for our partners, rip out to Greg’s point, that sales enablement issue where you have to have 10 people just to interface with systems.

[00:38:07] Janet Schijns: That’s where you’re gonna see it. And you know, we see this at AV point. Now look, I’m biased, I’m on the AV point board. DS is here and he’s the best marketer in the world. But AV Point stood up one day and said, we’re gonna put a channel expert on the board. We’re gonna go hard at helping the MSPs with their business.

[00:38:24] Janet Schijns: It wasn’t about the revenue, but the revenue followed. Right? When the MSPs saw the dedication, the, the things that at Point was doing to simplify their. Life to simplify their business, to help their business make money. The business came with it because the bottom line is partners do vote with the quote, right?

[00:38:44] Janet Schijns: They’re not gonna quote you unless you’re a good partner. Um, and while we can sit up here and say, Hey, it’s not gonna be about transactions, it still is half about transactions. And so I would say that the better partner you become, and AV point has demonstrated this, the more and more business you get, the more your partners grow, the more your partners become the top Microsoft partners, because that’s the ecosystem that AV point is in.

[00:39:05] Janet Schijns: The more the partners start to use you more and more in their business, the better partners they become. The more big companies now wanna be your partners and integrate into your stack, right? It really comes down to saying, I’m gonna put the revenue over here, as uncomfortable as that sounds. I’m gonna put it over here and first I’m gonna be a good partner and then I’m gonna get the revenue.

[00:39:24] Vince Menzione: So I love what you have to say about a point. And, and Ducks is gonna be on a session in a little while talking about marketplaces. In fact. So I, we haven’t really touched on marketplaces in this conversation. We have two of the three are here in the room talking about marketplaces today. So I think it’s a really great, like we have $419 billion in durable cloud budgets today, right?

[00:39:48] Vince Menzione: Why, why isn’t it moving as fast as it? I believe it should. I don’t feel like it’s moving as fast as it should. Partners are selling

[00:39:54] Janet Schijns: against it. That’s my final answer. Okay.

[00:40:00] Jay McBain: It it’s that there’s a couple layers to the answer. Yeah. Uh, one is that 82% compounded growth is nothing to scoff at. Right. That’s almost doubling in size every year.

[00:40:10] Jay McBain: Yeah. AWS became a top 10 distributor in less than two years. A distribution business has been around 40 years. Mm-hmm. Agree. It took them two. Agree, agree. And that was top 10. Now we’re starting to talk about them as a top five, right. Joining TD Cynics Ingram, who are 60 and $50 billion distributors bigger than Nike and Coca-Cola and Starbucks and McDonald’s combined.

[00:40:33] Jay McBain: That’s the size we’re talking about. That’s pretty fast. And that’s doubling almost every year when you add the agentic models. It continues to grow even faster than that,

[00:40:44] Vince Menzione: but how much of it is fulfillment on private offers versus net new revenue? That’s, that’s the question I have. The thing that

[00:40:50] Jay McBain: doesn’t change that quickly, which, which you know, is procurement.

[00:40:54] Jay McBain: Procurement and large enterprise, especially procurement. In the government, 56% of our industry is enterprise. Mm-hmm. 44% is SMB does turn faster. Right. But SMBs are not buying cloud consumption. No. So to go to the procurement divisions, uh, and the government is getting dozed pretty quickly. Yes. In terms of how they buy.

[00:41:16] Jay McBain: In other words, they’re turning everything off. Now. It’s a verb. I like it. And getting everything turned on. So we saw yesterday that, you know, Gartner just got like $5 billion of business shut off by the federal government. Yeah. And nobody looked to see if there was creating value and why, and who and where.

[00:41:31] Jay McBain: And all they said is, it’s all off now. It’s canceled, and now you’ve gotta go reapply for the money.

Mm-hmm.

[00:41:37] Jay McBain: And so it’s just a kind of a 50% cost savings. But procurement is in, you know, dog years. Yeah, yeah. And that’s why it’s happening. And procurement, what you feel is slower procure and procurement has the

[00:41:47] Janet Schijns: relationship with who?

[00:41:49] Janet Schijns: The partner. Right. We’ve seen this 70 plus percent of the time they’re buying through the partner. The services is leading the sale inertia. So now when you try to push that to the marketplace and cut the partner out, and I’m sorry, with all the love in my heart to the hyperscalers, you are trying to cut the partner out.

[00:42:02] Janet Schijns: You can talk to me about your partner program and what you’re trying to do and how you’re helping, but it’s not true. 50%, right? Exactly. It’s not true. You’re not integrating the partner into your marketplace play. So you’re forcing the partner to do the only thing they can, which is sell against you. And then the next thing they’re gonna do is find an alternative and we can smile and say, we’re too big to fail, but the hyperscalers are not too big to fail.

[00:42:24] Janet Schijns: We have seen big companies in our industry fail before. So the hyperscalers that get it right. That. Get the partner to understand how it works in their business and how they can use and place orders in the, in the marketplace. Use it as part of their thing, lower their costs, because they’re putting their customers through marketplaces.

[00:42:43] Janet Schijns: That’s the hyperscaler that wins.

[00:42:45] Vince Menzione: I think we’re gonna hear some of that later.

[00:42:47] Greg Sarafin: I’ll just give a slightly different take on marketplace. Different perspective, I suppose. So I, I don’t know where marketplaces end, but I can tell you they have already had a massive impact that may not be as visible to many of these.

[00:43:00] Greg Sarafin: Uh, so in our business, you know, we, we sort of go to market by industry and then by buyer, right? So the, the head of, you know, uh, insurance operations at, in the insurance industry. And so it used to be for years that we had a partner ecosystem curated around that buyer. With a bunch of different technology products that we had pre-integrated together, and that was sort of our easy button offering.

[00:43:26] Greg Sarafin: Now, if you wanted to piece part it out, that’s fine. We would do that for you too, but we always would come with an easy button. What’s happened with the marketplace is it is so dramatically changed buying behaviors. We had to actually create three versions of that ecosystem. One for the Microsoft stack, one for the Amazon stack, and one for the Google Stack, because clients want the draw down.

[00:43:47] Greg Sarafin: That they get through the marketplace. Mm-hmm. And so if you go to them with an ecosystem that has something that can only be drawn down in Amazon, and it’s a Microsoft, it’s a Mac, that that client has a massive Mac and they need to draw down there, that’s gonna be a losing value proposition. So those marketplaces from one perspective are extremely, uh, successful from my per ’cause.

[00:44:05] Greg Sarafin: They are shaping the winners and losers around each of those stacks. And then that has a wash back effect on us because we now have to support three different versions that’s right, of ecosystems for each of the solutions that we bring to market. So that’s a different take. I’d share with you all.

[00:44:21] Jay McBain: I’ll take, uh, just three reasons why looking forward of all the trends coming together.

[00:44:26] Jay McBain: One is the new buyer. 51% of our buyers now love marketplaces.

Yeah.

[00:44:30] Jay McBain: The second reason is all the models, subscription consumption, and now micro consumption over the next 10 to 20 years. Favor. Marketplaces.

Absolutely.

[00:44:40] Jay McBain: So this is, you know, your buyer creating change. This is the marketplaces. The one thing I haven’t talked about, which is a major trend is the new buyer, which is finops.

[00:44:49] Jay McBain: There’s a new set of people, there’s 24,000 of them now that are 50% trained in tech and 50% trained in finance, and they’ve been employed now between the CFO and the CIO originally to kind of move around hyperscaler workloads to save money. Then moved out to kind of edge to cloud. Hey, should we run, run this on that old Dell server ’cause we, you know, could do it cheaper.

[00:45:11] Jay McBain: And now they’re expanding into this agentic ai, which is the cost to the organization of tech, of every company in the world is outrageous. And the boards and everybody else have a laser focus on it. And now there’s somebody that’s trained on both sides and these, if you go to finops.org and, and study this model, these people love marketplaces.

[00:45:34] Jay McBain: It this commit, the $419 billion of commit is coming out of Fin Ops because I don’t want shadow it. That’s right. I don’t want managers putting things on credit cards, bringing in security risks and other things. I don’t want our pub, our data going out to public clouds consolidate. This is becoming a center where the CFO and the CIO are both gated.

[00:45:55] Jay McBain: And they are reporting up to the board

[00:45:57] Vince Menzione: consolidation. Yeah. Yeah. I wanna open up the, I’m sure there’s gonna be a lot of questions and we have a short period, short window time. Mm-hmm. Uh, but for, for the studio audience, they’re gonna get more time with you all later. But questions I, I see. Is anybody up at the mic or anybody have any questions they want ask?

[00:46:14] Vince Menzione: I’ll ask you to go to the mic though, if you can, Erica.

[00:46:21] Audience: Well first I feel personally attacked by the comment, um, around the nine different platforms. ’cause I work at Microsoft, so it is a pain in the butt. Oh, thank you. Uh, that was not my question though. Um, earlier, uh, mark and I, I don’t know where he went, but we were chatting about some companies are actually, they are not, they’re drawing a line in the sand when it comes to ai and they’re, they don’t want it.

[00:46:46] Audience: And I started to really think about that. And I’m just curious, you know, are what your thoughts are. Are those folks just doomed? You know, are they gonna have to pull it together or should there and could there be an uprising of people that are like, listen, we have got to make some changes here. Not just for compliance and safety reasons, but for human reasons.

[00:47:11] Audience: And I’m just super curious on your thoughts about that.

[00:47:14] Jay McBain: Yeah, I, I, I can take a stab. Two things to look at is, um, the integration first fire. And if, you know, a certain company in my stack, personal or professional life doesn’t wanna play and my co-pilot can’t go and do the work I need and I have to manually go and do things, I’m gonna stop by kinda like today, if, if somebody doesn’t take, uh, my version of payment.

[00:47:38] Jay McBain: I, I find a new place to shop. Mm-hmm. Yeah. Mm-hmm. So that’s kind of the, your customers are gonna force the change on the integration first world. And then, you know, one thing I didn’t say is 50% of the Fortune 500 fail, and over 20 years, 71% of tech companies fail that aren’t in the Fortune 500 and can’t buy their way outta problems.

[00:47:59] Jay McBain: 71% fail within 10 years. Yeah. Yeah. So what creates, you know, change? And if you’re not playing in this stack. And if you’re not having that agent and data model that you can add value, you, you know, this is, I, I can’t see a way forward and that’s why this is different than I ot and it’s different than other changes.

[00:48:19] Jay McBain: It’s just the way we’re evolving, uh, as a society and the way we’re evolving in business to, I do agree

[00:48:27] Janet Schijns: though that there’s going to be a, not a reckoning maybe is too call of a word. You know, back to the Arnold Schwartzenegger. Um, but there is a, a movement among younger people, gen Z, particularly back to the basics, back to hands-on loving bookstores, loving record stores, loving experiences.

[00:48:46] Janet Schijns: And I do think that especially in SMB, if you think about shopping local, there’s gonna be a huge return to anti-technology to places you can go and get away from it. Where the robots won’t be, where there won’t be automation, where like actual humans talk to you. I, I represent this myself. My daughter has a PhD.

[00:49:03] Janet Schijns: She was in research analyst in this industry. She’s dropped out of this industry and she’s opening an independent bookstore. Why? Because that’s where the money is for her long term. That bot’s gonna replace her as a research agent, and she sees it and she talks to her friends, and she knows that’s where the money’s gonna be in the local community.

[00:49:22] Janet Schijns: So I think in the local community, you’re going to see an anti AI kind of sentiment in small business.

[00:49:30] Greg Sarafin: Uh, I’ll just do a quick, quick take. Uh. First, I think co-pilots were certainly the place to start, but we’re never gonna be successful because changing the ways people work is super expensive. Nobody wants to spend that money, especially for somebody that does not have easily quantifiable benefits, which co-piloting does not.

[00:49:47] Greg Sarafin: Uh, we are a use case for that at my firm. Uh, the second is that in general, companies want to have big returns that are measurable. Not little returns. And so if they’re gonna allocate capital, they don’t allocate capital. They, they, they have capital projects to make big changes to the equation of their value in the market.

[00:50:09] Greg Sarafin: And so genic technology, when it is fully mature, I think will be that break point where you’re really gonna start to see capital allocated in large chunks to then change the way the enterprise operates.

[00:50:20] Audience: That makes good sense. Yeah.

Alright,

[00:50:23] Audience: I have a question. We have a question. I have a question for Greg and then I have one thing.

[00:50:26] Audience: So, Greg, you talked about how, you know, with agents, sellers, we’re gonna have fewer sellers. They’re gonna rise to the top, but, and, and the channel’s basically gonna go away. Totally disagree here. And I’m wondering, you know, with agents and looking at channel account managers, partner account managers. I mean, it’s the same thing on this side of the house too, on the partner side.

[00:50:53] Audience: There’s so much coming out, so much technology coming out that’s gonna do the same job on the sales side as the partner side and trim that fat. But these channel relationships, like the seller, needs to have the needs to have those relationships. But I see fewer channel account managers, fewer partner account managers, fewer sellers, but we’re using agents to really get the right people to the dance for the relationships.

[00:51:27] Greg Sarafin: Yeah. I don’t believe channels going away. My point was fairly, it didn’t make it well. Okay. It was trying to be a little provocative here to get him going, but, uh, I like to get rise.

[00:51:40] Greg Sarafin: Yeah. Is you gotta think about your balance. Mm-hmm. And you also have to take to account as this genic technology makes your direct sellers much more effective. How do you rethink allocating cost of sales that way where you have much higher likelihood of draw down and renewals as well as potentially a better customer experience if you do it well?

[00:52:02] Greg Sarafin: Right. That’s my only point. You’re still gonna have channels and all this is gonna play out. But my point is start thinking about what is that balance? Because the calculus is gonna change a bit for a whole lot of reasons, including how channel will evolve,

right?

[00:52:16] Greg Sarafin: Right. And these mechanisms like marketplace, not other things.

[00:52:18] Greg Sarafin: So I’m just, the only point I’m really trying to make to you is think carefully about your entire go-to-market calculus and realize that direct. Done correctly with this technology can be a much more powerful way to shape the future of your business revenue plus,

[00:52:38] Janet Schijns: oh, and I just have to say, no. I’m so sorry.

[00:52:40] Janet Schijns: I really do like you. But yet you have thousands of partners who sell seven to 13 solutions to the customer. You are one solution If you are thinking about your direct team, right? You’re one solution. Yes. I would really focus first on empowering and automating and streamlining in your partner community.

[00:52:59] Janet Schijns: Because your direct sales team is much smaller. Um, and then you can apply what you learned in your partner community to your direct team. So I’m just gonna flip that on its head a little bit, um, because I think the efficiencies are more from your partner community that you can get them from your direct team.

[00:53:12] Janet Schijns: And again, some 28-year-old that comes in and swears he owns Bank of America, doesn’t own Bank of America, the partner probably does

[00:53:21] Vince Menzione: final answer.

[00:53:27] Vince Menzione: And I wonder, but I have to keep us somewhat on time. Let’s do it. So, uh, I wanna thank each of you, uh, it was really a provocative conversation, which is what I was hoping for today. So we’re gonna have some more talk and then there was a question about marketplaces and ai, and I’m gonna ask one of either Microsoft or Google to answer that question for Jeff Chewy, who is in the live stream and asked that question.

[00:53:49] Vince Menzione: Thank you. So thank you so much.

[00:53:57] Vince Menzione: Thank you for joining this episode of Ultimate Partner, and if you haven’t done so already, mark your calendars. Ultimate Partner Live Spring is coming to Redmond, Washington on May 1st and second. This is going to be an incredible event like each of our ultimate partner events. This one is going to be just a little bit better than the one before.

[00:54:18] Vince Menzione: We’re having incredible leaders from Microsoft industry leaders talking about co-selling. Marketplaces aligning to Microsoft priorities and more. You don’t wanna miss this event. Sign up today before seats run out. up today before seats run out.