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091 - Craig Patterson - AI Driven Channel Success · Partnerships Unraveled

• 0:07
  Speaker 1: Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries about partnerships and channel on a weekly basis.
• 0:14
  Speaker 1: My name is Alex Whitford and I'm the VP of Revenue here at Channex, and this week I'm really excited to welcome our special guest, Craig.
• 0:22
  Speaker 1: How are you doing?
• 0:24
  Speaker 2: Alex, what's going on, my man?
• 0:25
  Speaker 2: Thank you so much for inviting me to this podcast, excited for this conversation.
• 0:30
  Speaker 1: This is the energy we like.
• 0:32
  Speaker 1: Craig for the uninitiated who are you?
• 0:34
  Speaker 1: Why should we be listening to you?
• 0:35
  Speaker 2: Yeah.
• 0:36
  Speaker 2: So first, thanks for having me on.
• 0:37
  Speaker 2: So I'm Craig Patterson, senior Vice President of Global Channels at Ariaka.
• 0:42
  Speaker 2: And for those of you that do not know Ariaka, ariaka is the unification.
• 0:48
  Speaker 2: So you think about the two worlds colliding networking side coming together with the security side, and so we're the unified, sassy solution that we're providing to the global enterprise market.
• 1:02
  Speaker 2: So Ariaka is roughly 113 million in revenue.
• 1:05
  Speaker 2: We've been around 13 years and you're probably saying, alex, you're probably saying Craig, what do you love the most about Ariaka?
• 1:12
  Speaker 2: Well, let me tell you, the thing I love the most is Ariaka is a channel-first organization.
• 1:18
  Speaker 2: So roughly 90-plus percent of all of our sales and revenue have come from this wonderful thing called the channel, which we all really appreciate.
• 1:27
  Speaker 2: And so you know, alex, I've spent the last 25 years or so in the channel world.
• 1:32
  Speaker 2: You know, here at Ariake I lead our channel go to market strategy with teams in Europe, in Asia Pacific and also North America.
• 1:41
  Speaker 1: Craig, we love that, Obviously.
• 1:43
  Speaker 1: I've spent my life in the channel.
• 1:45
  Speaker 1: I think channel is absolutely the right way to go, both for the customer and the partner and the scale.
• 1:51
  Speaker 1: Unfortunately, though, there are a few uninitiated out there who still believe going direct is the pathway to success.
• 1:58
  Speaker 1: Why do you firmly believe that channel actually is the right way to go?
• 2:03
  Speaker 2: Yeah, I mean, this is always something that comes up right.
• 2:06
  Speaker 2: And so you know, on paper, sometimes people believe, oh well, we can be more successful, we can be more profitable by trying to go direct.
• 2:14
  Speaker 2: But the world has changed, my friend.
• 2:16
  Speaker 2: So when you think about you know, the complexity that exists in our world today, like, think, if you're a customer and you're trying to figure out how do I navigate everything that's going on in the world around cloud, around infrastructure, around unified communication, cybersecurity, networking you literally would have to spend every waking moment of your day trying to meet with solution providers and then trying to understand who's being honest with you and who's not.
• 2:46
  Speaker 2: And so the reality is, because of the complexity of the world today, you know, most enterprise clients, like we believe, you know, I believe that you know 80, 85% of all global enterprise clients today are using some sort of channel relationship to really help guide them, to help understand how to solve the complexities that they're dealing with day in and day out within their own business.
• 3:09
  Speaker 2: And so you know, I think, at the end of the day, like you've got to understand the market, you've got to understand how customers want to buy services and you've got to embrace it, and so I've always been a big believer around.
• 3:22
  Speaker 2: That is, you align your strategy around the best way for companies to engage with you and let them decide how they want to buy services.
• 3:31
  Speaker 2: If they want to buy through channel, great, because I believe 80 plus percent of the time they're going to buy through channel.
• 3:37
  Speaker 2: And then if there's a couple of rare instances or where customers want to engage directly, you've got to support that as well.
• 3:45
  Speaker 2: But what we found is, you know, when we leverage channel, you know most of the time those channel partners have longstanding relationships.
• 3:53
  Speaker 2: Right, they can walk us into all those accounts that we want to be in today because they've been supporting those clients for a very, very long time.
• 3:59
  Speaker 2: And so that's what I love about channels we get to leverage those trusted relationships that our channel partners have had in place for many, many years with those a long time, and so that's what I love about channels we get to leverage those trusted relationships that our channel partners have had in place for many, many years with those enterprise clients.
• 4:11
  Speaker 1: And you're talking there about a shift right Meeting the customer where they need and the value that your partners can provide.
• 4:18
  Speaker 1: I think one of the big shifts that we're seeing a lot in the market now is the channel and brands themselves are moving away from a more transactional model, and so there's almost a two-tier education there.
• 4:30
  Speaker 1: You need to educate the partner on why moving away from transactional is valuable both valuable for the customer and for the partner and then also educate them on how to take those steps.
• 4:40
  Speaker 1: How do you sort of see that?
• 4:42
  Speaker 2: Well, I mean, I think the channel itself is sort of of, you know, is in the process of growing a bit, right, and a lot of these different business models are starting to shift.
• 4:50
  Speaker 2: You know you look at your market, right?
• 4:52
  Speaker 2: You coming from, you know Europe and in the London market there's a lot of disruption happening there today.
• 4:58
  Speaker 2: You think about the traditional kind of consulting business models are now being disrupted as new kind of agent models are coming to bear throughout the European marketplace.
• 5:09
  Speaker 2: And then you look at the traditional resellers out there, right, you think of you know the typical business model there where they set a buy rate with their provider.
• 5:18
  Speaker 2: You know they add their own management on top, they add their own margin on top and then they resell those services to the end user clients.
• 5:26
  Speaker 2: Like, what we're seeing is all these business models are starting to sort of merge together.
• 5:29
  Speaker 2: You know, in many cases a lot of these transactional partners are now moving up market.
• 5:34
  Speaker 2: They're getting into more complexity, they're getting into more large customer engagements which introduce new complexity for them, right, in many cases they don't want to take on the risk associated from a contractual perspective of buying those services and reselling them.
• 5:50
  Speaker 2: So we're starting to see, a lot of these traditional resale partners are moving to market in more of a hybrid fashion where they continue to operate in that resale space on the transactional side.
• 6:02
  Speaker 2: But Alex is starting to introduce new models as they start to move up market and so in many cases we're seeing a resale plus an agent model.
• 6:12
  Speaker 2: We're starting to see these things kind of come together.
• 6:16
  Speaker 1: Yeah, I love that right Because I think partners are always looking to see how they can maximize their value to the customer, because partners who do maximize their value make a lot more money.
• 6:26
  Speaker 1: Right, and some of that always entails heading up market, adding customizability, which adds complexity, which adds margin right, and so some of that services, some of that's reoccurring revenue, but deepening that value.
• 6:40
  Speaker 1: I know I had a recorded a great podcast with aws which will be hitting the Spotify and YouTube soon, where they talk about adding that complexity and customization for the end user, which is just the rich opportunity for the partner right, and that services margin there is obviously awesome.
• 7:01
  Speaker 2: Absolutely, we're seeing it the same way, my friend.
• 7:04
  Speaker 1: Now the big buzzword of 2024, and I think we're going to look at this as a new age of technology AI.
• 7:11
  Speaker 1: And now we sort of I like to separate AI into two conversations, both of which we're going to have today, which is how is AI changing your product and how is AI changing your go-to-market?
• 7:21
  Speaker 1: So what are the considerations, especially where Ariake is today in terms of products set, how is AI influencing that sort of product growth and mapping into those enterprise customers?
• 7:32
  Speaker 2: Yeah, no, I love this question.
• 7:33
  Speaker 2: I mean, the reality is, you know, typically in every engagement, I think, within the first three minutes, the first three minutes of a conversation with the client, they're asking you the same thing, because every client wants to know what is your strategy around AI.
• 7:46
  Speaker 2: So the way we've broken it down, alex, is, you know, we kind of have three different pillars, like in terms of the way we're viewing AI and the way we're integrating AI into our solution set.
• 7:56
  Speaker 2: So the first really is around the networking side and you think about the way AI is, the workloads associated with AI, right, typically these large language models or LLMs right, the amount of bandwidth, the amount of infrastructure required to transmit that data is quite substantial.
• 8:18
  Speaker 2: And so, when you think about our solution set, ariaka is very well positioned because we built this global layer two infrastructure that is poised to really help efficiently and effectively drive those workloads around LLM over a secure, dedicated global infrastructure.
• 8:39
  Speaker 2: So really, we're enabling AI from a network perspective.
• 8:44
  Speaker 2: And the second pillar, alex, is around security.
• 8:47
  Speaker 2: So you think about now the introduction of AI and the fact that AI is now in the hands of some bad actors, right, and they're taking this AI and they're creating new vulnerabilities, they're creating new threats, they're creating new breaches, right by leveraging AI against all of us.
• 9:04
  Speaker 2: And so, at the end of the day, our second pillar is really protecting the infrastructure.
• 9:10
  Speaker 2: And so you think about our new solution set around SASE.
• 9:15
  Speaker 2: It essentially does all that.
• 9:16
  Speaker 2: So we're going to stand up the network side.
• 9:19
  Speaker 2: We're going to protect your infrastructure, protect your network against all these bad actors out there as they continue to leverage AI against all of us.
• 9:29
  Speaker 2: And so the third piece, the third pillar, really is the insights, and when we talk about insights, we're talking about observability.
• 9:36
  Speaker 2: How can we take our AI?
• 9:38
  Speaker 2: How can we take AI, how can we introduce AI into our infrastructure and give customers the insights they need to make informed decisions?
• 9:46
  Speaker 2: And so we've introduced AI.
• 9:48
  Speaker 2: We're using it to give the analytics.
• 9:51
  Speaker 2: We're using it to look at traffic flows, look at traffic patterns, looking at the different logging that's going on across the network, and so, at the end of the day, we're giving observability to our clients so they can use those analytics to make decisions on how to more effectively and efficiently run their business.
• 10:10
  Speaker 2: And so, as we look at the first two pillars, the third for us is around observability.
• 10:16
  Speaker 2: As we look at the first two pillars.
• 10:17
  Speaker 2: The third, for us, is around observability.
• 10:18
  Speaker 2: So when you think of observability, it's really given the insights, given the analytics to our customers so they can make decisions on how to more effectively and efficiently handle their networking and security policies.
• 10:31
  Speaker 2: And so we're introducing AI into our infrastructure, we're giving those analytics to our customers so they can make those decisions.
• 10:38
  Speaker 2: You know, leveraging the logging, leveraging traffic flows so they can make more informed decisions, and so that's how we're thinking about AI, alex is you know?
• 10:47
  Speaker 2: One, around the networking side, enabling AI.
• 10:50
  Speaker 2: Number two, around security, protecting the infrastructure.
• 10:53
  Speaker 2: And three, giving our customers the observability to make better decisions on how to be more efficient.
• 11:01
  Speaker 1: I love that, especially.
• 11:02
  Speaker 1: Point three right, I think there's some amazing tools that I'm seeing there which are connecting sort of different databases, different systems, and allowing them to communicate with each other.
• 11:11
  Speaker 1: And because you're skipping that swivel chair process and allowing people to make better decisions because they've got not just data but analysis being presented to them that can sharpen up both efficiency and accuracy exactly awesome.
• 11:26
  Speaker 1: Now the bit that really speaks to me, maybe because I run a sales organization and I'm obsessed with being the world's laciest but best paid salesperson.
• 11:34
  Speaker 1: That's what I'm, that's what I'm aiming for ai affecting how you go to market.
• 11:39
  Speaker 1: I think it's an unbelievably interesting subject because I can imagine how ai is going to affect a direct go-to-market, because it's all my team, we're all using the same technology, nice and easy.
• 11:50
  Speaker 1: How does it affect a channel go-to-market is really complicated, but the upside enormous.
• 11:57
  Speaker 2: I mean, I think it's going to affect every piece of the channel strategy itself, right, when you start to break it down.
• 12:08
  Speaker 2: I mean it's going to really enable our channel organization and companies to be more effective and more efficient in terms of one how they prospect you think about their ability to create their ideal customer profile and their ability to create their target accounts.
• 12:20
  Speaker 2: They're going to be able to lay all that out in a very quick and efficient manner.
• 12:24
  Speaker 2: But then you think about well, how do I create engagement with those customers?
• 12:27
  Speaker 2: Well, now I can leverage a whole new slew of AI tools to create demand gen, right from an outreach perspective, from a BDR perspective.
• 12:37
  Speaker 2: I mean, now there's AI tools that can do cold calling that aren't actual agents, it's just AI dialing into target accounts.
• 12:45
  Speaker 2: So I think it's really going to transform the way customers are approached by the channel, right?
• 12:52
  Speaker 2: I think that's the first piece.
• 12:53
  Speaker 2: And then you look at the customer support, like the fact that now channel can leverage AI tools to provide a better customer support.
• 13:03
  Speaker 2: You know, in terms of, like, ai chatbots, in terms of virtual assistants, things along those lines.
• 13:09
  Speaker 2: There's a whole new array of opportunity for partners to add in new AI tools around enhancing their customer support.
• 13:17
  Speaker 2: And then, of course, the analytics too.
• 13:20
  Speaker 2: It's going to give the channel companies the ability to run analytics against their own business to one predict churn.
• 13:29
  Speaker 2: I'm going to be able to look at certain triggers going on within my customer portfolio, looking for risk associated with churn and if I understand that risk well, guess what?
• 13:39
  Speaker 2: I could be proactive to start to build campaigns to turn whatever risk triggers I'm seeing around to potentially save and retain those customers.
• 13:49
  Speaker 2: But also the analytics are going to give them insights into future growth opportunities in terms of their basic customers, looking for those patterns in terms of these customers from this vertical are buying these types of services.
• 14:05
  Speaker 2: And I can start to get very strategic in how I approach growth within my own portfolio of customers.
• 14:13
  Speaker 2: Of course, they're all going to do what you're doing, alex and the rest of the sales teams are doing today, and that's they're going to leverage AI for automation in terms of just general tasks that we deal with day in and day out, in terms of writing content or writing emails or things along those lines, or creating new pitch decks.
• 14:32
  Speaker 2: I mean AI obviously can dramatically shape the way that we become more productive in our daily routine around just various different tasks, and you know.
• 14:42
  Speaker 2: And then, of course, security.
• 14:43
  Speaker 2: Obviously, security is the top of mind for everybody out there and so you know, ai tools can be leveraged to, you know, really create the analytics around what's happening from a threat and breach perspective and so preventing breaches and protecting the channel partner's data against those types of activities.
• 15:04
  Speaker 2: So honestly, alex, I mean we could go on for hours upon hours about how AI is going to change the channel go-to-market strategy and perspective, but I think the general answer is it's going to change everything.
• 15:18
  Speaker 2: Right, it's going to change everything in terms of how we approach our day.
• 15:23
  Speaker 1: One of the things that here's my 2025 prediction what we're going to see is the overuse of not good enough AI, and so what I'm really expecting to see and this is where your best sales people are going to win is people are going to become overly reliant on sort of mass AI functionality.
• 15:42
  Speaker 1: So if we go back 10 years to people just email blasting short, non-customized emails out to 10,000 people and hoping something lands, what?
• 15:52
  Speaker 1: What we should be using ai for is to drive efficiency so I can manage more customers simultaneously, but where I think the channel is going to beat the direct market is the relationships exist already, and so what that's going to allow channel teams to be able to do is go, let's spend more time speaking, because we've now got all of this automation to help drive efficiency, but what we can't do is then substitute and take a step back from actually owning the relationships that our customers need.
• 16:20
  Speaker 2: I mean you said it right there the beauty of channel is relationships, my friend.
• 16:24
  Speaker 2: I mean that's the most important thing around.
• 16:27
  Speaker 2: Channel is the relationship side.
• 16:29
  Speaker 2: And it's funny you say the overuse of tools.
• 16:31
  Speaker 2: Like I see that every single day as I start my day, I get a cup of coffee and I log into LinkedIn.
• 16:37
  Speaker 2: Like you can almost see now the content that's a hundred percent being created through AI tools.
• 16:44
  Speaker 2: Right, like I'm able to see it now.
• 16:46
  Speaker 2: The people that are actually leveraging AI every single day to write their own content on LinkedIn.
• 16:51
  Speaker 2: You probably see it as well where they're just overusing it.
• 16:54
  Speaker 2: So I agree with you 100% there.
• 16:56
  Speaker 1: Yeah, and I think the bit that I would really sort of caution sales people with is I can imagine, craig, once you've worked out who's using you know, chat, gpt, how quickly you turn off from that person that content, because they're no longer a person, right, they're a robot, they're not interested in their opinion.
• 17:13
  Speaker 1: And so I would really caution because I and I'm a huge believer in in what ai can do.
• 17:19
  Speaker 1: But I I heard something the other day which I thought was quite a nice analogy around hey, I how ai should not be used is we want to use ai so that we can spend all of our time doing what we love, right, like creating art, having fun doing all of those pieces.
• 17:33
  Speaker 1: What we don't want AI to do is create our art so that we can spend time doing the dishes, and so I sort of think about that when we want to deploy AI in our go-to-market motion.
• 17:44
  Speaker 1: I want my salespeople speaking to customers all day long.
• 17:47
  Speaker 1: Now, unfortunately, they have admin and processing and reports and creation stuff to do around that.
• 17:53
  Speaker 1: But if I could click a magic wand and go, hey, go for it, speak to customers all day.
• 17:58
  Speaker 1: The beauty is, AI might allow us to do that.
• 18:01
  Speaker 1: And for God's sake, please don't use AI so that we speak to customers less.
• 18:07
  Speaker 2: Yeah, no, I think you're spot on there.
• 18:09
  Speaker 2: I mean, the beauty of AI is it's going to prepare for those conversations right as the salespeople are picking up the phone.
• 18:16
  Speaker 2: I mean, they're able to do their research in such a quick and efficient manner and really understand all the things, the strategic initiatives going on within that company's organization that they can use to use, you know, in those conversations they're having directly.
• 18:29
  Speaker 2: So I think it's a lot of research and understanding what's going on within that company.
• 18:34
  Speaker 2: That's the beauty of research and understanding what's going on within that company.
• 18:35
  Speaker 2: That's the beauty of AI.
• 18:35
  Speaker 2: It's going to help those salespeople be a hell of a lot more efficient than they were.
• 18:40
  Speaker 1: Yeah, I think one of the things you know in the UK and I'm sure it's the same in the US, right you go.
• 18:45
  Speaker 1: Okay, a channel account manager can own between six to ten accounts, depending on size.
• 18:49
  Speaker 1: I think what's going to happen is that number is going to change.
• 18:51
  Speaker 1: That ceiling is going to happen is that number is going to change.
• 18:53
  Speaker 1: That ceiling is going to be pushed up because the efficiency is going to go up.
• 18:56
  Speaker 1: But what I'm expecting some people to think is oh great, now we don't need to send people to go and meet face to face and we'll just cover everything with virtual agents and LLMs to cover language models and send really good templates and training decks.
• 19:10
  Speaker 1: That's where I think business is going to make huge mistakes, and the ones that rely on the channel and their partnerships managers to have genuine relationships.
• 19:19
  Speaker 1: That's where I think we're going to see the big strides forward 100% my man.
• 19:23
  Speaker 2: I can't wait to continue to watch this all play out.
• 19:27
  Speaker 1: Excellent, Craig.
• 19:28
  Speaker 1: Look, we would not be a partnerships podcast if we didn't ask for a referral and we'd like to ask our guests who they think we should have on next.
• 19:37
  Speaker 1: Craig, I know you've got someone in mind.
• 19:39
  Speaker 2: Yeah, I mean I would absolutely recommend you talk to one of the biggest disruptors in the channel game and that's Drew Leidecker, the co-founder and president of Avant, and actually wrote a piece that I think you really enjoy in your conversation, and that piece is direct sales are dead.
• 19:57
  Speaker 2: So he wrote a very disruptive article talking about the transformation going on in the market around enterprise and the fact that a vast majority of enterprise clients today are using some level of trusted advisor to guide them.
• 20:10
  Speaker 2: He made a prediction that, basically, direct sales are dead.
• 20:14
  Speaker 1: Excellent, drew.
• 20:15
  Speaker 1: Not only are we coming for you, I think my opening question is is direct sales dead?
• 20:19
  Speaker 1: Craig, it's been an absolute pleasure to have you on buddy.
• 20:22
  Speaker 1: Thank you so much and for our listeners.
• 20:25
  Speaker 1: I hope you enjoyed Craig and his awesome insights.
• 20:28
  Speaker 2: Hey, thank you so much, alex.
• 20:29
  Speaker 2: I enjoyed the conversation.
• 20:30
  Speaker 2: My man-