Resellers should not be afraid of technical advances such as cloud computing and software-as-a-service (SaaS), a leading Gartner analyst has warned.
Speaking recently at CRN’s Channel Expo Tiffani Bova, vice president of research for indirect channel programmes and sales strategies at Gartner, advised resellers to embrace new technology and find ways to incorporate it into their businesses rather than viewing it as a threat to their existence, particularly as the economy slowly begins to improve.
Gartner estimates that by 2012, a total of 20 per cent of businesses will own no IT assets, and in the US, which is traditionally mirrored by the UK market, 35 per cent of mid-market businesses will be buying cloud computing.
In addition, Gartner revealed that by 2014, 25 per cent of large enterprises will use a combination of private infrastructure and public cloud services. By 2015, 20 per cent of SMEs will use cloud-based storage services as an alternative.
“Over the next 10 years there is going to be a hybrid of public and private cloud,” said Bova. “As a channel company, the good news for you is that the transaction doesn’t behave as a private cloud – which creates the selling environment.
“Also, the integration between the private and public cloud is a big concern in terms of security for end users, and vendors don’t have the skills internally, which leaves it open to the channel,” she said.
“Don’t be afraid of technical advances driving you out the market,” she added. “Most resellers seem scared to death of the cloud. We have to make sure that we continue to look forward. Resellers need to ask that if their existing business went away in the next 12 months, would they survive?”
On a positive note IT spend in Western Europe is back in growth mode, albeit marginal, with 0.9 per cent growth on last year," said Bova.
“Computer hardware, for example, was up 5.7 per cent in Q1 2010,” she said. “But we won’t see a recovery to 2007 levels of spending until at least 2011.”
Resellers must continue to look at growing their managed services offerings because as vendors develop their technology, they are unable to provide customers with the level of technical support that the channel can offer, she advised.
“Traditional service providers are starting to go after the channel and they haven’t engaged with VARs in the past. They are now looking towards them to sell some of their hosted solutions. These firms are courting the channel and it is changing the way vendors look at their partners,” she said.
The SME space is going to continue to grow according to Gartner, with smaller firms looking for specialist vertical solutions from partners.
“These smaller players are going to feel more comfortable with the channel, particularly if resellers align themselves with particular verticals,” she said.
Due to the minor improvement in the economy, resellers should also look to change their messaging to customers, Bova said.
“It is not all about cost cutting anymore,” she said. “There was a lot of fat driven out of business last year. Resellers need to be saying ‘I’m not just here to sell you this technology – I’m here to show you that it can do this or that’.”
However, resellers also need to be clever in encouraging customers to spend money, added Bova.
“In total, 65 per cent of IT is spent just to keep the lights on, and the remainder is for innovation and growth. End users still have to keep the lights on – and if budgets are cut that is the challenge facing the channel – how do you continue to drive revenue but still keep the lights on?” she said.
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