When Yogesh Gupta joined Progress Software as its CEO last October, he began to steer the company toward a cognitive, Internet of Things-centric model. Progress had been looking for a corporate identity, especially when it came to IoT and how it affects its partners. When Gupta came on board, he gave the company a new focus: trying to understand how people digitize their information.

So says Kim King, Progress’s longtime VP of Global Channels and Partners. King has been leading the company’s channel program for the last five years, watching the nature of partners’ business models change in order to adapt to new technology. When it comes to the new focus on “cognitive first” programs, King says it only makes sense. The market is slated to grow to $31B by 2019, with business savings from predictive maintenance alone reaching the $630B mark by 2025.

“IoT is core to that overall strategy of cognitive first,” says King. “A lot of our partners have been using IoT data to make their applications more relevant, but we didn’t really have a strategy around that until Yodesh came here.”

IoT comes of age in the channel

That timing makes sense when looking at IoT from a historical perspective. King says in the five years she’s been leading Progress’s channel, partners have been reluctant to focus too many resources on IoT applications. While analysts and vendors have been urging the channel to look toward big data, cognitive computing and the Internet of Things for years, it’s only been in the last several months that partners have been able to visualize ways to monetize the data they’ve been collecting from IoT sensors and devices.

“Big data has now turned into IoT and streamlining that data based on what’s most relevant,” says King. “It’s almost like the light switch went on and everybody realized what they should do with all this massive amount of data they’ve been collecting. It’s good for us and it’s good for our partners.”

Progress figures if it can help partners analyze their data to determine what’s the most relevant, it will be well on its way to supporting its channel through the digital transformation. If partners can drive predictive or cognitive analysis that allows them to be more relevant in their customers’ business, both partners and Progress can cement a place in the new tech paradigm.

Still, there’s no roadmap for the digital transformation, and King admits Progress is figuring it out as they go along. The concept of IoT is still difficult to define, as it bleeds on one end into big data collection, and on the other into cognitive and predictive analysis. Just telling partners that Progress can help them establish an IoT business doesn’t mean a whole lot.

“That’s the challenge that a lot of [vendors] are seeing. They’re saying many partners aren’t adopting IoT because it’s just too big. But if you break it down into bite-sized pieces they can understand and really draw strategy around, it makes it easier for them to say ‘Yes, this is relevant for us and we can make it work.’”

The ‘new’ channel

For King, the excitement these days is in watching partners adopt that cognitive first strategy and change their approach accordingly. These leading-edge partners are businesspeople in addition to being the technology experts, and they know what data is the most relevant to their specific verticals and markets.

Most of Progress’s partners are independent software vendors (ISVs) that have built applications on Progress’s platform. King says these ISVs, once generally referred to as ‘lifestyle partners,’ are now by and large her more mature partners. They’ve been at this game a long time, and they’re demanding the same level of attention that historically has been reserved for more traditional reseller and managed service provider (MSP) partners.

“For the longest time, many companies have…spent all of their time and effort on these resellers and VARs that sell to everyone,” says King. “Nobody built programs around ISVs, and they’re the ones that ultimately become the route to market for a lot of people moving forward because it doesn’t matter where they build the application—cloud or on premise.”

As ISVs move into the role of mainstream partner, a new type of partner is emerging, and King admits they’re her favorite right now. Digital agencies have exploded onto the channel scene in the last couple of years, providing a new route to market that leads directly to the line of business (LOB) buyer. These highly social partners understand more than just the technology Progress and its ISV partners provide. They can also identify how end customers can use that tech to help advance their business.

“They look at it from the outside in approach. They understand the business aspect of selling to the economic buyer. They get embedded in that company to help them understand their messaging, how they go to market, how they sell to different people. They’re this interesting sort of new age partner.”

The digital agencies, says King, are filling a skills gap that’s long plagued the channel. The ability to apply technology to solve for a business outcome has historically been a weak spot for legacy partners, who are experts in technology, not business. The changing nature of the IT buyer has shone a blinding spotlight on the issue, and digital agencies are flooding in to fill the gap.

King has noticed a new competitive spirit among Progress’s partners, perhaps because these new channel firms are so well versed in business strategy, which is all about competitive differentiation. That competitiveness has fueled an increase in the number of partners eager to actively participate in the different components of Progress’s channel program such as training and certification.

“They’re very competitive with each other around building the best website, building the best go to market plans, having the best people, making sure their people are certified in sales and marketing and all the different pieces of product and strategy. How do you get VARs to get their people certified? We’d have to pay them to get them certified on a product.”

What’s next for the channel

When asked what she thinks the average partner will look like in five years, King predicts a softening of what is now a sharp divide between partners who focus only on technology and those that pride themselves on understanding clients’ business needs.

“Maybe they’ll come under this umbrella of the truly value-added provider or partner, where they have this expertise that the digital agency has, but they also have the technological resources to do implementations and drive solutions for end customers and other partners like ISVs. It’ll be a combination of both pulled together.”

The channel will always have traditional resellers, she adds. But the channel five years from now will be very much a business-focused channel. The channel has seen the complete shift from the technology buyer to the economic and business buyer, and in the future, partners will find their stride within that new paradigm. As they adjust, business models and sales strategies will follow suit. The new channel partner won’t go in with a product, says King. They’ll go in with a business outcome and then work to make that happen for the customer.

“It’s been a long time coming, and I think we’ve finally figured out how we get there: it’s with the digital agencies combining with some type of a VAR that has that technical expertise.”