Generative AI hits the channel – are partners ready?

Clarion call

The idea that “AI can help us work better, smarter and faster” is the clarion call for all things GenAI, across all industries. But how does this play out in the channel? Time-consuming manual processes such as analysing marketing activity plans, validating requests for budgets, and identifying the correct personas for more targeted marketing campaigns, can now be automated resulting in significant cost and time savings.

AI can be used for new business growing opportunities, such as scanning publicly available information to identify where investments are being planned, then matching that information up with where products and service offerings can add value. The result is a point-and-go plan created at lightning speed, saving time and money.

GenAI can make a huge a difference for partners. Today, many resellers and distributors rely on information held in separate Microsoft Excel, Word and PowerPoint documents which are only accessible to individuals rather than the team – and these documents often can’t be populated with results. 

We have a 100% indirect sales strategy. As such, making sure our channel partners have all the information and support they need … is a key priority

Unsurprisingly, many channel players are already tuned into the benefits of AI.

“According to our research, we found there is an expectation from MSPs for vendors to use AI to make better use of customer data, build lead-generation dashboards, and to help improve customer profiles so they can see the gaps in the tools and services for those customers,” says Nicole Reineke, AI strategist at N-able.

Claudio Soland, senior vice-president of global alliances at Alcatel-Lucent Enterprise, explains the vendor’s challenges: “We have a 100% indirect sales strategy. As such, making sure our channel partners have all the information and support they need … is a key priority. We have over 3,000 channel partners … [and] responding to such a huge pool of partners with personalised support to better serve their own customers is a mammoth task requiring a huge amount of our time, resources and expertise.”  

Pure insight

Alcatel-Lucent Enterprise’s move reflects how GenAI is set to become central to tech vendor partner relationships.  Elsewhere in the market, Pure Storage has already taken the lead unveiling a raft of GenAI initiatives at its 2024 partner conference.

Pure Storage’s Pure1 Assets dashboard is designed to benefit partners with clear workflows that provide uninterrupted service and clear cost analysis during renewal periods.  

Geoff Greenlaw, vice-president of EMEA and LATAM channel at Pure Storage, says: “If a customer is using our Pure1 AIOps platform, they may receive an AI-generated recommendation to turn on snapshots [an immutable data snapshot that protects against ransomware] to improve cyber resilience.

“If this occurs, the partner will also receive the notification, establishing a basis for a conversation on the customer’s cyber resilience needs. This could result in additional revenue for the partner, while providing a valuable service to the customer.”

Pure is also taking a road that many other vendors are set to follow, providing new levels of insight into business performance for resellers. This includes account-specific key performance indicators (KPIs), market trends and platform performance analysis to reveal upsell opportunities and improve customer service.

Greenlaw adds: “This level of insight is powerful – for example, partners will be able to see exactly what an individual sales executive is transacting and how successful they are. They can also correlate that information with the enablement and training that the seller has received. This will allow the partner to refocus and upskill their entire salesforce so that they have those same tools to target specific market segments and verticals.”

In a sense, Pure is an outlier in the race to provide resellers with GenAI-based tools because its already there – but others are catching up. At present, most tech vendors are still assessing the capabilities of AI and determining where the technology can help customers and partners go to market faster. It’s clear that soon there will be more automation of inside sales, pre-sales, and a greater, more accurate reach into global markets.

At what cost?

But with any positive there’s always a concomitant negative hidden in the shadows. So, what’s the catch with GenAI?  

Ash Gawthorp, AI specialist at Ten10 consultancy, which guides businesses on using AI, says: “There could be a cost, but no one quite knows what that cost will be. There’s so much talk about the technology, but what is coming from the human perspective?”

There’s so much talk about the technology, but what is coming from the human perspective?

Several surveys consistently reveal that as AI adoption surges, employees are left to wonder how systems placed on “automatic” can be controlled and how long it will be before their jobs are on the line.

These were the top two fears revealed in a recent study by Gartner about the five main concerns workers have over generative AI and AI in general. And those fears are warranted, according to survey data. For example, IDC predicts that by 2027, 40% of current job roles will be redefined or eliminated across Global 2000 organisations adopting GenAI. It reflects a common worry that AI will impact an employee’s role, either by making it obsolete entirely or changing it in a way which concerns the employee.

Duncan Harris, research director for Gartner’s HR practice, says: “When employees have these fears, they all have a substantial impact on either the engagement of the employee, their performance, or sometimes both.”

Real anxieties

Within the context of the channel, these anxieties are unwittingly alluded to by Pure Storage’s Greenlaw: “[AI] can also foster significant back-office improvements. When adopted effectively, this allows partners and vendors to streamline workstreams and improve efficiencies considerably.”

The phrases “streamline workstreams” and “improve efficiencies” are ones that make many business owners smile. They see overhead expenses (for instance, jobs) taking a significant dip – why employ four people when AI can do the same tasks at lightning speed and make savings of over £100,000?

The stock answer to employee concerns is something along the lines that employees can be freed up to do other things that are perhaps more challenging. This might happen in some cases, but is also unlikely to happen in many other cases.

In a 2023 survey of 1,000 US workers by Ernst & Young, 75% of employees said they are concerned AI will make certain jobs obsolete, and around two-thirds (65%) said they are anxious about AI replacing their job. Almost half (48%) of respondents said they are more concerned about AI today than they were a year ago, and, of those, 41% believe it is evolving too quickly. 

A recent study from Gartner cited that organisations aren’t being fully transparent about how AI will impact their workforce – typically just stating they’re using AI and leaving it at that. GenAI shouldn’t just be foisted on workforces without context and details on what risks and opportunities are available – otherwise an employee’s perspective will generally be negative, irrespective of what the future holds.

But there are new opportunities. For instance, creating AI prompts to ensure effective use of AI is a skill. Get the prompts wrong when querying the AI and the information that comes out would be better suited for the bin. Get it right and the information that comes out could be gold standard. 

For instance, a reseller might want to explore the sales of products it’s never sold before with a vendor. If the AI tool is available, it can query the potential size of the market, target personas and estimate likely revenue streams, opening new business streams. Or the tech vendor can provide this information depending how the use of AI tools are set up between partners and vendor.

[AI] can foster significant back-office improvements. When adopted effectively, this allows partners and vendors to streamline workstreams and improve efficiencies considerably

That said, Ten10’s Gawthorp makes a serious point that could potentially undermine the use of AI tools: “Algorithms might have an inbuilt bias with inaccurate and wrong data. AI is a neural network, almost like a biological system, but it’s not intelligent. It sees data coming in and then pushes data out based on the information coming in.

“Suppose an AI model is set up to provide new sales opportunities in different countries, does it consider different working practises and different cultures that influence buying?  These are important, but sometimes elusive, parameters that need to be considered when ‘training’ AI models if you want penetrating and sophisticated market insight.”

Today’s GenAI coming out of vendors initiatives is set to be more basic, such as contracts coming up for renewal, or new products, or finding which areas markets are growing, and so on. Automating these processes signals a step change in the reseller-partner relationship and points to fatter pipelines and more revenue.  

But it’s worth keeping in mind that beyond improving relationships with the channel, vendors are looking to their own benefits. A proposal is drafted, pricing is recommended, and the right partner is picked in an AI-led, hyper-efficient way. Vendors understand they will win more business, reduce the cost of sales, and increase profits – as will partners.

However, this could potentially mean some channel partners missing out on contracts they might previously have gained. It could also reveal unintentional bias towards and against certain partners based on performance.

If AI output is considered sacrosanct within this context by vendors, it could potentially damage existing channel relationships. The gold standard of data could well become a lead brick for some partners if they find themselves squeezed out.

Price of progress

Resellers also need to consider legislation if they don’t want to get blown out of the water by fast-developing regulation. Regulators are working swiftly to ensure AI developments don’t run out of control.

The recently enacted EU AI Act regulates numerous industries’ use of AI by classifying use as unacceptable, high, limited, minimal and general purpose. It requires transparency for all AI use and conformity assessments for high-risk use. The AI Office can levy fines up to a staggering €35m, or 7% of a company’s worldwide annual turnover.

Nicole Reineke of N-able, adds: “There are also local laws that restrict the use of customer data in AI or require transparency and disclosure of the implications of AI-made decisions. Partners must choose vendors with a clear AI policy in place and work with their local legal experts to ensure they are communicating and utilising the data in accordance with the regions they serve.”

There’s no question that GenAI is set to unleash a raft of business-boosting, cost-saving benefits. But it will also likely result in workplace turbulence which could be compounded if the introduction of AI and its implications aren’t spelt out to employees. Whatever anyone says, jobs are set to go. It’s the price we’ve always paid for progress.

There are also regulatory issues to consider and questions to be answered, such as whether vendors have legislation covered, and – most importantly – how impartial is AI output? Is it truly objective or has bias been unconsciously built into it? Only time and usage will tell.