Meeting halfway

As we approach the midway point of 2015, we caught up with half a dozen UK reseller bosses to talk Commons majorities, cold calling, cloud computing and currency fluctuations

The continuous debate and uncertainty leading up to what was tipped to be an incredibly close general election result is finally over, and as we come into the second half of the year, we have a majority government in place for the first time in five years.
Are resellers feeling a post-election glow? And how will the strengthening dollar, rise of cloud and shift in procurement models affect their business as we move into the second half of 2015? CRN talked to six leading resellers to find out in a roundtable discussion hosted by distributor Cloud Distribution.

Now the election is out of the way, and we have a majority government again, how do you expect 2015 to pan out for the channel?

Jerry Mumford, sales manager, Frontier Technology: "The fact the election is done and we have a government, rather than a hung parliament, is such a relief. Irrespective of your political stance, the fact [that we have] a sensible guy and we are paying back the money [means] the confidence is now there. The election could not have come at a worse time if it tried, but now confidence can continue to build with the markets - not just in the IT bubble, but in the country as a whole."

Jonathan Lassman, founder of Epaton: "But in business terms it doesn't really make a difference. We would have just carried on doing what we do, and ploughing on. What goes on in the outside world doesn't really affect what we are doing, if you are all focused on growing your business. You have to plough on in the bad times and the good times.
It does depend on who you sell to, though. If you are selling in the corporate space, it won't make any difference. If you are a major public sector player, you just have to change direction and keep on going."

How damaging has the rising US dollar been for you all this year?

Greg Harris, sales director, Cloud Distribution: "You are affected if you are buying in one and selling in the other. There have been plenty of articles, not least of which in CRN, about a number of major vendors that are looking at difficult conversations such as: does the cost lever go up, to you as a reseller channel and to you as an end user? It may well be that now we have a sensible government that it may not come to fruition, but there was plenty of hearsay to suggest
it might."

Mark Brackley, managing director, Jade Solutions: "The impact is on management time. So if you go from disties, they would give 90-day quotes in the past, but when it is moving as it has been, it is five days. You put the quote in and at the end of the week you probably have to redo it. So it's just the management time, and that's the real impact. The deal will happen whatever the price; everyone is in the same market."

Bruce Hockin, director of storage, Cloud Distribution: "While we do a lot of buffering from dollar exchange rates, which means you [the resellers] possibly see less of it, one of the challenges we have is when renewals come around. Going back a year ago, we were at 1.7 [exchange rate] and recently we were at around 1.43, and the costs of goods have gone up about 17 per cent. We have had a lot of resellers coming to us and lots of negotiation - ‘why has the piece of something gone up by 17 per cent in a year? Have the discounts changed?' We say: ‘no, it's the dollar rate that has changed.' [They then say] ‘but my customer doesn't have a budget for the renewals; they had it at that price, not at this price.' So it has elongated some of the sales times. It has presented a problem because deals that should just go through the system with renewals are going backwards and forwards a little more. Deals are getting done, and the customer is finding a little more budget from somewhere, but the renewals are a big part of it."

Cloud computing was viewed suspiciously by the channel when it first surfaced. Now it's a more mature market, do you see it more as a threat or opportunity?

Mumford (Frontier Technology): "Cloud means absolutely nothing; it's such a distraction. It's a meaningless word and actually, some of the old terms are far more accurate in terms of outsourcing IT. That is what the cloud is: outsourcing something. And the definition is now, is it private or is public - is it Amazon and Google, or is it the private cloud providers?"

Shane Taylor, managing director, Mobliciti: "To me, the opportunity of cloud is the shared infrastructure of it. Private cloud is profitable, but it's still very expensive. Shared has the kind of crowd benefits where you get the price down by everyone sharing all the elements of it."

Gary Duke, sales and marketing director, Lan2Lan: "The word ‘cloud' doesn't mean a lot, but what it does do is deliver a lot of conversations from the CEO down, to say: ‘we need to look at this cloud thing; I [the CEO] don't know what it is, but we need to sort it out'."

Dave Henderson, business development director, BlueFort Security: "For us, Office 365 and the desire and journey they are going on [is important]. We don't play with Microsoft, but all the wraparound with that - and the layers of technology to make that possible, to secure it and deliver it - that triggers opportunities for five or six technologies that make a really neat solution for us and we don't touch the Microsoft part. But all it takes is one person in that organisation drinking the Microsoft story, and saying we need Office 365, and the unintended consequence of that is a massive market for us to leverage."

A lot has been written this year about how the rise of social media and the decline in the influence of the IT manager, along with other factors, have changed sales and marketing culture in the channel. Would you go along with this?

Duke: "The customer certainly knows a lot more today. When a customer comes to us now, they are probably about 50 per cent more educated than in the past and they tend to know what they want."

Mumford: "Call me old-fashioned, but [when it comes to the] debate about whether cold calling works - it genuinely, 110 per cent works. Picking up the phone and speaking to someone - great. It enables the customer, they still want to speak to someone and that still wins the deal and actually it makes it easier to win if you are good at the old-fashioned techniques. People have got very clever at email filtering. There was that little trend of sending someone a handwritten letter, and that worked for
a bit. But speaking to someone on the phone and doing things the old-fashioned way still works."

Taylor: "With targeted marketing, we are doing a lot more around specific verticals. So if you can make someone feel that this is for them and they can get something out of it, email can work. But it can't just be broad-brush because everyone would just delete it. However, if you have something that is really compelling, and you can get them to look at the email, then you do get opens and click-throughs."

Hockin: "The thing that possibly has changed is, yes, people have become more informed, but that is potentially getting through a lot of barriers. I have gone into meetings with our partners to meet end users and they have a fixed idea of what technology they want, but not necessarily which vendors they want. That's a good opportunity because you don't have to do a lot of the heavy lifting to start with but it does mean you are coming in at a later stage of the sales cycle."