United we stand

Channel leaders warn of challenges in 2009, Sara Yirrell and Fleur Doidge report

Success? Some predict 2009 will be a difficult year

CRN’s inaugural Reseller Leadership Forum in the sumptuous surroundings of the Four Seasons Hotel in Hampshire, attracted channel figures from all over the UK.

Although the approaching juggernaut of the credit crunch has been showing no signs of slowing, the CRN Reseller Leadership Forum (RLF) provided a breath of fresh air, reinvigorating delegates and shining a light forward to 2009 and beyond.

Despite what seems like near-constant doom and gloom about the global economy, most attendees were feeling bullish and confident they could survive any downturn.

Computacenter chief executive Mike Norris, the first keynote speaker, started the day in a positive mood by describing 2008 as a good year.

He said 2009 was the year to watch out for, with the effects of the global slowdown more likely to be felt (Channelweb, 24 September) as business difficulties spread to the sales cycle and become experienced more by the channel.

“Next year is going to be tough,” he said. “I think 2008 is a good year. I am expecting it to get worse in 2009, particularly for the IT market. I hope I am wrong. We at Computacenter continually try to drive costs out of the business, and I am
expecting our headcount to reduce.”

Norris predicted other channel players would follow Computercenter’s lead, changing headcounts and restructuring to to cope with whatever the global economy throws at them.

Event chairman Ian French noted that an opportunity for the channel to discover the best tactics for 2009 and beyond starts here, with business networking, strategising and sharing knowledge at forums such as RLF.

About 95 per cent of the delegates booked for the event turned up on the day, which is always an encouraging sign, particularly in an industry where the drop-out rate is pretty high.

Delegates enjoyed head-to-heads with industry leaders who shared their tips, strategies and techniques for success and joined in some lively panel discussions that took on everything from greenwashing to the truth about virtualisation ­ all with an eye to maximise revenue opportunities for solution and service providers across the UK and overseas.

French noted that the emerging economies of countries such as China, Russia and Brazil are likely to dictate the direction of many industries in the future.
A wise channel player, therefore, will take this fact into account when planning future strategy around competition and plans for expanding abroad, he said.

“These places are shaping the [global] economy,” said French. “We are not calling the shots any more. The power base in the Far East is going to shape the playing field.”

Banks will have to create new value for their customers to stay relevant in a changing world ­ and so will the channel. “If they do not, they are history,” said French. “And if you do not have a plan, you too will be out.”

The future remains unwritten, but it will take into account different technologies, solutions, products, manufacturers and ways of relating to customers and provisioning, such as software as a service (SaaS), virtualisation and so on.

Channel partners that succeed will make partnerships that look bravely towards the new world and the future, rather than
staying behind ageing barricades with hopes that the challenge will depart.

Martin Prescott, managing director of RedPC, welcomed the approach and format of the event as an unmissable opportunity to network with a wide range of IT professionals from organisations of all shapes and sizes.

Outside the two main keynotes, two panel discussions and eight interactive focus groups, delegates were free to mingle, network and socialise during morning tea and coffee, a three-course lunch and evening drinks and canapés.

Of course, the sessions themselves were valuable too, said Prescott.

“The presentations and panel sessions were highly engaging, and the full-on interaction between speakers and delegates was both frank and informative,” he added.

Richard Parker, managing director of EOL IT Services, said the day was fantastically well organised and the whole CRN team did a great job.

However, he believed that some of the focus groups had room for improvement.

“Some of the interactive sessions were a little light in content, but this is something that can be improved for next year. Overall it was a very good day,” said Parker.

Panel session one was entitled The key to engaging new customers… and keeping them. Taking part in the session were Andrew Brimson, director at Khipu Networks; James Felix, business development director at ACS Syan; Mark Price, financial director at BT Convergent Solutions; and Sukh Rayat, vice president of Avnet Technology Solutions EMEA.

The general feel from the session was that delivering what you promise is very important and being honest with
customers is key. While you can often get new customers, it is critical to retain the ones you already have wherever possible.

“We always admit if we are wrong,” said Price. “You cannot keep bad news away from a customer. It is vital that the channel goes through a problem with customers and fixes it. You cannot take customers for granted, he added.

Rayat, who also gave a keynote later in the day about the way forward for distribution, said: “Employees are also an asset where customers are concerned. There is a correlation between happy staff who understand the company message, because they will help keep the customers.”

United we stand

Channel leaders warn of challenges in 2009, Sara Yirrell and Fleur Doidge report

One of the morning interactive focus groups was on unlocking capital and credit and finding flexible and innovative finance solutions to engender customer loyalty.

The session, chaired by Jan Schuil, European business development manager at De Lage Landen ­ a sponsor of the forum ­ covered the issues affecting resellers and how credit and financing companies can help channel firms survive difficult times.

In the afternoon, one of the interactive focus groups was called Relationship management, building effective and
winning collaborations to capture market share. Headed by Martin Woolley, business unit director at Integralis, this interactive panel session touched on the mistrust between resellers and how, by working together, channel firms can increase their business and bring real benefit.

A highly informative and engaging session in the morning was chaired by finance expert Richard Btesh, entitled Consolidate or die: planning for M&A and managing expansion. Btesh, a one-time financier and currently a director at telecommunications firm Chess, said large numbers of IT companies are either likely to fail in coming years as the ripples from the credit crunch spread outwards, or at least be signalling distress and seeking possible buyers.

Btesh warned the panel that distressed companies may not be a suitable buy for any but the best prepared and most solid acquirers, although it can be tempting to buy when a bargain becomes available.
Other panellists agreed, and contributed their own experiences ­ some positive, some less so ­ in the mergers and acquisitions field.

In the afternoon, breakout sessions included one on green IT, called Adopting the green agenda: energy efficiency and
climate change ­ impact, implications and solutions for the channel.

Although many resellers have heard more than enough about climate change already, a full complement of partners turned up to find out where the value mi ght be for them in going green.

Andy Butcher, head of service development at Calyx Software, said that many IT players want to see hard figures on adopting green IT to progress.

Other session attendees were united in wanting to progress an environmentally friendly policy ­ or even carbon neutrality ­ but
needing proof of the benefits.

Although the trend towards a greater focus on environmental issues across all industries is not going away, business is business and continues to requires close attention to the bottom line.

Anja Ffrench, PC donations and marketing manager at charity Computer Aid International, outlined her organisation’s attempt at closing the loop when it comes to e-waste. Computer Aid International prevents PCs from going to landfill in this country by collecting and refurbishing them for eventual donation to schools in developing countries.

Tracy Rawling Church, marketing director at Kyocera Mita UK, discussed where savings could be made by investing in greener hardware to start with.

Kyocera Mita develops and manufactures a range of printing technologies that reduce the spend on consumables as well as the cost to the environment.

There was also an upbeat keynote from Avnet’s Sukh Rayat on untapping the value of distribution. Rayat expressed dissatisfaction with the words solution and commoditisation, unleashing instead a new word on the audience: solutionisation. “We want to move the word commoditisation to solutionisation,” he said.

His reasons were based on the notion that as industries such as distribution change with the times, vocabulary needs to change with it, to better communicate its value to partners and customers.
“Our industry is maturing. Vendors are talking directly to end users and vendor sales teams are in it for their own numbers. They create a lot of confusion and the value proposition is diminished.”

Rayat noted that a lot of technology coming into the market can help resellers change their business models. If customers are stuck in a particular paradigm, the right partners have the ability to help them.

“We believe VARs will start to become more successful, but this is going to take time,” Rayat said.
“Tier-one VARs are strong, but the middle space needs to change the model to survive. We believe the VARs of today will become the solution providers of tomorrow.”

The end of the day saw a final interactive panel session in the grand Four Seasons ballroom: Shift, adapt, survive: the changing dynamics of the channel services and profitability.

Chaired by Judy Groves, group marketing director of SCH, the panel also included Martin Prescott, managing director of RedPC Services; Des Lekerman, joint managing director of Eurodata Systems; Julian Fielden, managing director of OCF; and Tim Black, SMB director of Intel.

The main theme of the discussion was how most of the panellists had experienced change, and the sign of a strong company is one that can survive even the most difficult circumstances. Much interest was shown from the floor, with delegates not hesitating to grill the speakers on detail or clarify any hint of uncertainty.

Wrapping up,chairman Ian French stressed the value of partnership and going forward bravely and with hope.
“There is no silver bullet to the problems,” he said. “We need to be brave. A recession is a fantastic time to build a business, where our enemies’ enemy is our best friend.

“No business can afford to stand still and this is a time for leaders.”