Tech Distribution Changes in a Cloudy Industry
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Transcript of Tech Distribution Changes in a Cloudy Industry
© 2011 Forrester Research, Inc. Reproduction Prohibited1 © 2009 Forrester Research, Inc. Reproduction Prohibited
Coming Upheaval in Technology Channels: How will New Revenue Streams be Shared
Peter O’Neill, Vice President & Principal Analyst
Distree XXl, Monaco, February 10, 2011
© 2011 Forrester Research, Inc. Reproduction Prohibited2
Agenda
Diverse forces align to change the business of IT
Cloud computing will change this industry
Channel partners' plans and problems with “cloud”
What about the distributor’s point of view
Call to action
© 2011 Forrester Research, Inc. Reproduction Prohibited3
The business of IT is becoming empowered
Source: January 7, 2011 “BT 2020: IT’s Future In The Empowered Era” Forrester report.
© 2011 Forrester Research, Inc. Reproduction Prohibited4
And three forces of change impact the business of IT
Source: January 7, 2011 “BT 2020: IT’s Future In The Empowered Era” Forrester report.
© 2011 Forrester Research, Inc. Reproduction Prohibited5
Businesses expect to be more self-sufficient and empowered
Source: January 7, 2011 “BT 2020: IT’s Future In The Empowered Era” Forrester report.
© 2011 Forrester Research, Inc. Reproduction Prohibited6
Diverse forces align to change the business of IT
Cloud computing will change this industry
Channel resellers' plans and problems with “cloud”
What about the distributor’s point of view
Call to action
Agenda
© 2011 Forrester Research, Inc. Reproduction Prohibited7
Recap: What is cloud computing?
Cloud computing is:
A standardized IT capability(services, software, or infrastructure)delivered via Internet technologiesin a pay-per-use, self-service way.
© 2011 Forrester Research, Inc. Reproduction Prohibited8
What will move into the cloud – Long term duality
Private
Virtualprivate
Public
Public transportation
Level ofsharing
Business value
Private cars
What will move into the cloud:
Standardized business logic
Horizontal business applications
Front-office applications
Simple, standardized infrastructure services (IaaS) like storage and compute power
Systems with fluctuating load
What remains on premise for a long time:
Applications implementing customer’s intellectual property and competitive business logic will never go into SaaS, potentially onto IaaS and PaaS
Mission critical back-office applications
Many custom-built applications
The most mission critical back office processes
Applications with constant predictable load
© 2011 Forrester Research, Inc. Reproduction Prohibited9
Diverse forces align to change the business of IT
Cloud computing will change this industry
Channel resellers' plans and problems with “cloud”
What about the distributor’s point of view
Call to action
Agenda
© 2011 Forrester Research, Inc. Reproduction Prohibited10
Channel resellers want to grow
Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
© 2011 Forrester Research, Inc. Reproduction Prohibited11
Channel resellers want to grow their business by adding new services
1% in NA, 10% in EMEA
Slightly, 34% in NA, 57% in EMEA
Significant, 49%, 16%
Double, 9%, 14%
Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
© 2011 Forrester Research, Inc. Reproduction Prohibited12
Resellers product sales go down, services up
Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
© 2011 Forrester Research, Inc. Reproduction Prohibited13
Resellers are already providing managed services
Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
© 2011 Forrester Research, Inc. Reproduction Prohibited14
Resellers are planning for new managed services
Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
© 2011 Forrester Research, Inc. Reproduction Prohibited15
Those without managed services see these barriers
Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
© 2011 Forrester Research, Inc. Reproduction Prohibited16
So good resellers are changing their business models
Source: July 10, 2009, “The Changing Yin And Yang Of Tech Vendors And Channel Partners” Forrester report
© 2011 Forrester Research, Inc. Reproduction Prohibited17
MSPs/hosters can serve more customers
+ Increase in number of MSPs/hosters
+ No significant increase in number of customers
Fewer channel partners
Forrester anticipates a “channel washout”
15%
1.2m channel partners
MSPs/hosters can serve more customers
+ Increase in number of MSPs/hosters
+ No significant increase in number of customers
MSPs/hosters can serve more customers
+ Increase in number of MSPs/hosters
MSPs/hosters can serve more customers
M&A
The best
marketers
© 2011 Forrester Research, Inc. Reproduction Prohibited18
Diverse forces align to change the business of IT
Cloud computing will change this industry
Channel resellers' plans and problems with “cloud”
What about the distributor’s point of view
Call to action
Agenda
© 2011 Forrester Research, Inc. Reproduction Prohibited19
Distributors are changing their orientation
Historically, distributors provided added value for vendors
– Inventory, financing, channel management
– Sales & marketing
– Often, a distributor specialized on just a few vendors (or just one)
In the future, distributors will be providing a service for resellers
– Vendor aggregation
– Sales enablement
– Marketing platform
– Hosting (physical or wholesale)
© 2011 Forrester Research, Inc. Reproduction Prohibited20
Financing• Vendor – loan/equity
• 3rd party – Biz2Credit, On Deck Capital
Hook your reseller partners up with your MSP partners
Distributors will continue to help resellers
Problem “Solutioneer” it Infrastructure investment is too
high
Don’t understand the business
model
Too difficult to find/staff the people with the requisite skills
Add a people finder to your online partner community
• Embed a job search engine – CareerBuilder, Monster
Enablement/certification program
Product training
Sales training
Marketing training
Business model training
Channel enablement
maturity curve
© 2011 Forrester Research, Inc. Reproduction Prohibited21
Good distributors will continue to adapt their business
© 2011 Forrester Research, Inc. Reproduction Prohibited22
Examples of distributors providing MSP platforms
Ingram Micro(In Production)
“Seismic is an exclusive Ingram Micro managed services portfolio that helps MSPs quickly and easily leverage and deploy a broad array of managed services, enabling them to manage technical labor resources more efficiently, build and sustain recurring service revenue streams, improve service levels and customer satisfaction and increase profitability.”
Avnet(Planning)
“Growing your business doesn’t mean you have to increase your overhead. At Avnet, we continually invest in high-value services and resources that enhance our partners’ offerings while reducing their cost of business. Throughout your sales cycle, Avnet delivers the comprehensive support you need to achieve your specific business goals.”
Arrow FusionSM Cloud Services(In production in US)
By aggregating and integrating multiple cloud and managed services offerings, we streamline the selection, engagement, and management process for VARs, allowing you to focus on your core business and client relationships.
Tech Data(Reselling only)
Some VARs may feel threatened by distributors that enter the hosting market, so Tech Data doesn’t host MSP platforms, but the VARChoice initiative includes a growing range of MSP platform options that VARs can purchase.
© 2011 Forrester Research, Inc. Reproduction Prohibited23
Distributors – Change or Die!
Tech industry is overrun with distributing entities.
• Globalization, brand consolidation and cloud will prevail
• To focus on physical product distribution, consolidate your portfolio and your vendors.
• To expand your business and thrive in a cloudy market, turn your focus to the resellers’ needs.
Call to action
© 2011 Forrester Research, Inc. Reproduction Prohibited24
Vendors – Understand The Changes!
Distributors will increase their influence over resellers.
• Product vendors must include distribution partners as a new communications route to resellers.
• Understand how to sustain your brand while outsourcing marketing, sales and business model training to distributors.
Call to action
Resellers – Pick Your Distributor Strategically!
Focus on your core competencies.
• Leverage your distributor for supporting services across many business processes.
© 2009 Forrester Research, Inc. Reproduction Prohibited
Thank you
Peter O’Neill+1 650. 581.3864 +49 69 959298 39
www.twitter.com/poneillforr
www.forrester.com