Looking to the future
It's time to take a look at 2014 and what this new year might bring for the channel. Fleur Doidge asks around
It's not really surprising that the mountain of "Predictions for 2014" PR that lands like an avalanche on CRN's desk at this time every year is full of security vendors saying that security will be the number-one area for channel profits; server OEMs claiming "savvy resellers" will still profit with servers; and virtualisation vendors forecasting the same for their area of speciality.
You get the picture: almost none of these predictions is really a forecast so much as wishful thinking, or at best, advertising dressed up as analysis.
So we have decided to make a small protest in the name of channel partners everywhere, and truth and beauty and all that, and throw said mountain of PR in the bin.
Though we're still stuck with the problem of trying to chart a credible course for the channel in 2014, so we'll have to make some predictions of our own. And here they are.
■ First of all, IBM will buy Microsoft. Well, OK, we don't really know too much about that, but our editor always asks us if IBM has bought Microsoft yet when she returns to the office after a meeting, and she must know something we do not, right?
What we do predict, though, is the continuation of consolidation across the channel. Perhaps industry shrinkage, as it were, won't go quite to that level - but doubtless smaller companies will continue to be gobbled up by larger ones. As the pace of change continues to accelerate in the IT industry, so it will also within the channel.
The year 2013 saw the acquisition of several big names in distribution and the subsumation of multiple OEMs as well, including Computerlinks by Arrow and Softlayer by IBM. At the time of going to press, Microsoft's proposed acquisition of Nokia had been approved by the EU and in the US.
So, for 2014, what about Apple and BlackBerry? You've got to admit, those names could crumble together well.
■ Our next prediction is the demise of the term "cloud", which became increasingly meaningless as 2013 progressed. We believe (hope) the foggy term will be ditched across all marketing media by an expanding number of channel companies. Having been asked by customers one time too many what it is that they actually do, IT providers will put more thought into the clarity of their message to the market. And not before time.
Mobility is rapidly becoming de rigeur for both consumers and business users of technology, and this won't change next year. Remote working will increase - the sheer cost of the commute having become so high in many cases that looking for ways to avoid it will for many become almost unavoidable.
Meanwhile, people continue to search for the device they can take almost everywhere and do almost everything with.
■ This is why we think that Amazon might soon stop making its pureplay e-reader Kindle device. Although tablet ownership and ubiquity continues to spread, the market for the dedicated e-readers that pioneered e-book sales is not keeping up, as market watcher Futuresource revealed in statistics released just before Christmas.
■ Arguments about a lack of alignment between IT and what the end-user organisation actually wants will - depressingly - continue to go around in circles in 2014. Both stakeholder groups must change their approach and improve their communications and comprehension of each other's needs, but this appears to remain a long, hard road to travel.
And until considerable improvement is made, it is likely that businesses will continue to perceive IT primarily as a cost centre - not as a chance for revenue expansion or a facilitator of innovation.
End users will call IT, or the third-party provider that delivers and supports it, as a last resort, and they will likely remain suspicious of the motives and practices of the channel, as a survey by Ovum for TalkTalk Business this year revealed.
Part of the answer could be in improved project management, but it seems likely that inter-departmental, inter-disciplinary comprehension and communication must be both broadened and deepened from the grass roots to the very top of the organisational tree.
■ Much more due diligence will be done on deals within the channel - especially if they seem like good ones. This will be about finances, but it will also be about data and information security concerns.
Organisations and their providers will probably never be able to prevent a breach or a financial error, but they can certainly increase the odds in their favour, and with the ever-advancing raft of regulatory strictures that affect the IT space, the need is becoming all the more pressing.
All this will of course create an opportunity in the training and recruitment area - for example, IT providers that expect to catch and keep a collection of happy customers will need to be able to source and communicate with an increasing number and range of experts, often with business skills or in different fields from IT, as the year progresses.
So that's five have-a-go predictions from us. Going out on a limb? Probably. But, as futurist Magnus Lindkvist told QlikTech partners in October, one thing is certain: the future won't always resemble the past, and when change happens, it will likely occur in unexpected and surprising ways.
Market research firms can both crunch and query the numbers available and make predictions accordingly - always being aware that extrapolation from what is known is a risky strategy. With that in mind, we asked a couple of prominent IT market analysts for their views on 2014.
Jeremy Davies, chief executive of Context (pictured, right) is not keen on the rounds of annual predictions that appear at this time of year either. However, he agreed to speak to CRN on the basis of looking at what Context's figures might suggest - keeping it real, as it were.
"For the new year, I wouldn't write off Microsoft, for starters," he says. "You need to look at what it's going to do, and once Microsoft gets itself behind something, it will make it successful."
Apple, Microsoft and Cisco may all transform themselves in profound ways over the next several years, and may not go the way of the lumbering dinosaurs they can seem to be.
The only thing users care about is that something works, and if the big names can move in time to provide it, then that's what the user will buy. Microsoft's moves into cloud and in consumer hardware look promising, Davies suggests.
He also says that the PC market is diversifying, with users increasingly favouring a certain form factor or device for particular tasks. Once, the PC did everything - and if you wanted to play games, you added a decent graphics chip - but today users often have a smartphone and a tablet and a notebook or desktop PC as well.
"It's like we are going full circle in some ways," he says. "It's not computing on tablets taking over the world. There are more things going on in the market."
For example, notebooks are being seen as more of a business device, and tablets are becoming more for consumers. That generally holds true despite the existence of special-purpose applications such as tablets in healthcare, for instance. Higher-spec notebooks are selling better - and average prices are rising too, Davies notes.
Tony Lock, programme director at Freeform Dynamics (pictured, left) played us a riff on the themes for 2014. Mobility, and its security, will become even more imporant next year, he notes, with choose-your-own-device - rather than pure BYOD - leading the way in organisations. Cloud developments and advances in networking are also moving apace.
"For the channel in general, I think it is going to have to get ready to change things. It never changes quickly enough. But I think the pressure on many channel companies to actually add value to solutions, rather than just resell low-margin boxes, is unavoidable," says Lock.
"This has been going on for a long time, but I suspect that for many in the channel it is almost reaching that tipping point. Margins are really becoming unsustainable."
Those that haven't done it so far must think harder about embracing managed services to expand their portfolios. But an increasing number of companies will be hitting that critical point, and may find themselves unable to adapt. Therefore, perhaps, we can look forward to another year of dramatic change and consolidation across the channel.
Another key theme, Lock suggests, will be customers' desire for greater flexibility and on-demand offerings. Since cost pressures are unlikely to go away, organisations will still be seeking expanded ways to make savings and operate as efficiently as possible.
This means potential innovations in pricing and business models for services providers aiming to grow and keep their customers happy.
"Things are becoming much more dynamic," Lock concludes.
WHAT THE VENDORS SAY
Kevin Bland, channel and alliances director at Citrix (pictured, right), predicts a good year in many ways. "Customers have been responding to the popularity of mobile devices in the workplace, and asking how you control what is coming in," he says.
Customers will want not only to control the devices and the data, but use them to deliver value, however - and that will be key for the channel in 2014.
"Extend the conversation into applications, and how to deliver secure email to a number of devices," Bland says. Meanwhile, the need for education continues, he agrees, to prime organisations for the changes to come and lay out a road map.
Sian John, director of security strategy at Symantec (pictured, right), says security and privacy will come to the fore more in 2014, not least because of the fallout from the Snowden-NSA revelations. Organisations will become more wary of how and where they share their information and data - an opportunity, of course, for the channel.
"Over the next year, we will see people starting to think about privacy a bit more, and then, linked to that, there will be things such as Google Glass coming out, perhaps towards the end of 2014," John says.
Threat intelligence will also become a more powerful and better-used weapon in the organisational arsenal, she suggests. At the moment, the data is out there but few firms as yet are able to monitor it and respond in a timely manner. Compliance will become more about genuine prevention and less about ticking boxes, she adds.
WHAT THE DISTIES SAY
Dave Ellis, director of new technology and services at Computerlinks (pictured, right), says he is continuing to see growth in both private and public cloud.
"I think one of the impacts of that is that as more people start to optimise the cloud, putting more applications and data in there, it becomes more and more critical that it is really resilient. Issues such as internet connectivity and security [will come to the fore]," Ellis says.
Companies initially adopted DropBox and Google Drive for their convenience and worried about any issues later. The year 2014, suggests Ellis, might be the time when companies start to go through what they've got when it comes to cloud and mobility and work out what they really need to do instead. As always, the channel should be ready to educate the customer.
Laura Bouchard, UK sales director at Avnet (pictured, right), says demand for converged infrastructure will go on expanding - and resellers must gear up for the trend. "We have already seen it, and it will continue to grow. And obviously, the transition to cloud will continue. Those are the main trends," she says.
Storage-related sales as part of both strands of market development will continue to be key, and Avnet is continuing to develop support and training to help partners address the situation.