Datacentre disruption to hit channel margins
Gartner research into coming datacentre market disruption suggests areas of concern for partners
Resellers and other providers of datacentre IT should prepare for another squeeze on vendor margins in the next three years.
According to Gartner vice president Joe Skorupa, the datacentre infrastructure market is being disrupted from several directions, and one result is likely to be even tighter vendor margins – meaning less for the channel partner further down the supply chain.
"By the end of the year 2017, the vendor margins will contract by significant amounts," Skorupa said. "Margins on x86 servers will go down by four percentage points – that's not per cent of the current margin, but four percentage points. Infrastructure software margins will be down five percentage points, and external controller-based storage margins by four percentage points."
Partners may do well to consider their related strategy early, before the shrinkage starts. Because, according to Gartner, the changes are a result of datacentre market disruptions that are already occurring and not always even related to technology.
"The datacentre market will experience significant pressures, in terms of total market size and vendor margins," Skorupa said.
The pressures include the rebalancing of the global economy from west to east, with different business practices encouraging fragmentation and the rise of niche players; mistrust on a global scale, partly based on fallout from the Edward Snowden surveillance affair; and the rise of web-scale or hyper-scale IT that can reduce the need for the middle tier of IT providers.
Errol Rasit, research director at Gartner, added that the impact of some of the very large cloud providers coupled with the need for businesses and other organisations to become more agile, mobile and do more with less will push customers towards a bimodal approach to IT overall.
"This promises increasingly componentised back-office systems, and to satisfy front-office needs we are seeing increasingly non-traditional partnering arrangements," Rasit said.
New application development and deployment for the datacentre would have to develop a strong business case if it were to happen on-premise, rather than in the cloud, in this new world, he indicated.
Traditional managed services provision may also be under threat, with MSPs finding it more difficult to find a niche where they can add value for the customer – who may increasingly prefer to buy direct from a web-scale player, for example, Rasit implied.
"The traditional managed services provider may be at risk of being relegated to being a transport or, at best, become just managed services brokers," he said.