Send us Fan Mail Ep. 251 – Larry Walsh, CEO & Chief Analyst at Channelnomics In this episode of Partnerships Unraveled, we sit down with Larry Walsh, CEO and Chief Analyst at Channelnomics. After three decades studying how vendors and partners work together, Larry brings a data-driven, refreshingly clear-eyed view of what actually makes channel relationships thrive, and where the real opportunity for growth is hiding. Larry opens with a distinction that reframes the whole vendor-partner relationship: vendors tend to operate on narrative economics, describing value in ways people can believe, while most of the channel runs on vibe economics, things partners feel but can't always articulate. That gap is where misalignment creeps in. Larry shares an example of a vendor struggling with partner engagement, only to discover they were playing defense, protecting margin so tightly that the benefits weren't worth the effort. The fix isn't about equal treatment, it's about equilibrium: creating conditions where partners make money with a vendor, not on them. The conversation turns to friction in the go-to-market process, and Larry points to Channelnomics' own research on quoting: some partners wait three to five weeks for a quote, at a moment when customers expect Amazon-level speed. He also describes how partner programs accumulate like sedimentary layers, with policies piling up long after anyone remembers why they exist. His approach isn't chasing perfection, since that's expensive and never fully reachable, but building a continuous habit of asking whether a rule or process still earns its place, and removing what only adds drag for partners. Looking ahead, Larry sees the channel's role only deepening: less about moving boxes, more about becoming the connective tissue between vendor promises and customer outcomes, helping partners go further, faster, and with less risk. Key Takeaways: Equitable Outcomes Drive Partner Engagement Larry points out that vendors and partners tend to run on two different kinds of economics: vendors describe value in narrative terms, while partners operate more on feel, things they sense but can't always put into words. When those two are out of sync, engagement suffers. He shares a real example of a vendor whose partners weren't engaging, only to find the vendor was "playing defense," making it too hard to capture even modest benefits, and the fix was building genuine equilibrium rather than identical treatment. Partners Earn Only When They Perform Larry breaks down why channel economics work the way they do: a direct salesperson has to be paid, trained, and supported whether or not they close deals, while a partner only earns when they deliver. He notes that a channel sale runs roughly 10 to 15% more economically than a direct one, largely because partners are mining the white space already sitting inside their own install base. Quoting Speed Decides the Sale Drawing on Channelnomics' own research, Larry shares that a third of partners are waiting three to five weeks for a quote, at a time when customers, conditioned by Amazon-style buying, expect answers instantly. He points to vendors managing a quarter million SKUs or custom-built hardware as examples of how quickly complexity can turn a quoting process into a lost sale. Probability Models Replace Guesswork With Strategy Larry describes a recent project where a global vendor was deciding how to restructure a regional partnership, and Channelnomics ran the options through a probability model that scored four different configurations by likelihood of success, one coming in at 85%. Rather than replacing judgment, the model gave the vendor a clearer set of trade-offs to weigh, which lined up with their budget and capabilities. The Channel Keeps Evolving Into Trusted Advisors Larry pushes back on "save the channel" narratives, pointing to a partner ecosystem that's larger than ever, with more than 600,000 partners in Microsoft's network alone and roughly 1.2 million worldwide. His view is that the channel's role keeps shifting, from selling boxes to clouds to now selling outcomes, with partners becoming the connective tissue between what vendors promise and what customers actually experience. _________________________ Learn more about Channext 👇 https://channext.com/ Watch on YouTube ► https://www.youtube.com/@channext #channelmarketing #channelpartners