Key takeaways from ECLF 2018

We round up the themes from this year's event in London

This year's European Channel Leadership Forum (ECLF) hosted an exec A-list in buoyant spirit.

Industry leaders from some of the largest firms in the industry - including Softcat, Insight, Tech Data and Atea - gathered in London to discuss the opportunities and challenges facing the industry.

Here we round up the key themes that ran throughout the event's keynote speeches and panel discussions.

Partners need to partner

A theme throughout the day's keynote was the concept of partners partnering. Increasingly complex solutions are calling for expertise that sometimes goes beyond what broad partners can provide.

Increasingly, end users are looking for solutions that are tailored to the sector in which they work, according to Steinar Sønsteby, CEO of Nordics infrastructure reseller Atea.

"We are looking more and more into partnerships - not just vendor partnerships," he said. "This could be local consulting companies that have a vertical approach.

"There is a little bit of difficulty here because it is not something we are used to. We used to buy something and sell it, but now it is more of an ecosystem.

"[These businesses] partner with us because we deliver a solution together with them and it helps us from getting 100 per cent into the vertical, which we try not to do.

"We try not to go from being an infrastructure company with solutions to going into 10 or 15 verticals by using some of the partners that are known to be good in the vertical. They are very often country-by-country players and they become our vertical but we are 90 per cent of the project delivery."

This view was shared by Insight's UK boss Emma de Sousa, who said that some of the firm's relationships with other firms (some of which were in attendance) would likely surprise people.

"What is really important for me is the go-to-market partnerships that we build," she said.

"We have some multi-tiered partnerships and probably some relationships that we never thought would exist, but they can be key to opening up new markets and enabling us to enhance our value proposition."

Tech Data SVP Andy Gass said that in a lot of cases, resellers are turning to distributors to help them forge these types of relationships. He highlighted a recent Tech Data event designed to connect partners as proof, with the number of registrations five times that of last year's turnout.

"With the increasing complexity of the solutions required by users, more and more partners are having to work with each other and the cloud transforms that further," he said.

"The traditional flow-through model is changing and we are seeing a massive demand for connecting partners."

Brexit could spoil the fun

While most people in the UK would love Brexit to no longer be an issue, its uncertainty lingers on. With Brexit D-day set for 29 March, the government's seeming lack of clarity around its plan is causing concern for businesses.

Speaking early on at the ECLF, Insight's de Sousa said that she doesn't expect Brexit to affect the US giant's pan-European business, but offered little comfort for how the UK would be affected - claiming that a no-deal outcome could obliterate discretionary IT spending.

She explained that Insight is currently preparing for three eventualities: a Norway-style relationship with the EU, a no-deal outcome, or a Brexit postponement.

De Sousa explained that Insight is not concerned about the impact each of these results will have on the reseller's wider European business, but added that the potential effect on the UK is unclear.

"In the most part Insight sources locally and supplies locally [in Europe], so outside the UK we don't see an incredible risk to the rest of the business," she said.

"In terms of Norway-plus, I think it would have very little impact on the business. In the Norway-plus outcome, the majority of the impact is political as opposed to economical so we wouldn't expect any major supply chain issues and there would still be free movement of people. All things considered, from our point of view that would be a preferable outcome."

De Sousa was, however, less optimistic about the impact of no deal, which she said would likely tighten the purse strings of IT buyers.

"The other extreme is the implications around no deal and this is where we would have some major concerns," she said.

"From an economical perspective we would expect a short to medium-term economic shock with some medium to large devaluation in sterling. We would expect market confidence in the UK to decrease pretty significantly and of course we would expect UK spending to contract.

"In terms of the likely impact of no deal on the industry, we would expect discretionary IT spend to slow down or potentially stop; cost reduction we would expect to be the primary driver behind IT investment and we think it may accelerate a move to public cloud to the hyperscalers in favour of the local hosters."

Public cloud is boosting on-prem sales

Public cloud has long been considered (mostly by outsiders) the technology that could spell the end for the channel.

But the reseller execs in attendance said that public cloud hype has actually fuelled growth in hardware sales.

Softcat chairman Martin Hellawell said that he expects sales of on-prem solutions to continue to grow as infrastructures become more complicated.

"For the channel it has been an absolute bonus because now we have customers with even more complex infrastructures," he said. "They thought moving to the cloud would simplify things but it hasn't. We have a role to play helping customers with that increased complexity.

"Five years ago pretty much every CIO conversation I had was [them saying] ‘I'm never going to buy datacentre hardware ever again, we're going to put everything into the cloud and it is going to be a cloud-first strategy'.

"I think that has changed very significantly and over the last five years we've absolutely landed on hybrid. Actually taking legacy applications that were written 35 years ago and are core to the infrastructure, and moving that to the cloud, is difficult for a lot of organisations."

Graeme Watt, who took over from Hellawell as Softcat CEO earlier this year, said public cloud adoption has created issues around certain areas, including security, that have boosted channel sales.

"Cloud adoption, far from cutting out the channel, has added to our business," he explained.

"Issues of security, how easy it is to migrate data to the cloud and back, and the suitability of data sitting on the cloud [are providing opportunities].

"Cloud isn't always the most cost-effective model to apply either, meaning that on-premise technology is alive and kicking. On-premise datacentre technology needs to be optimised and modernised alongside the other options around cloud, multi-cloud and hybrid cloud, which also means that customers need our support and consultancy.

"There are lots of opportunities now and in the future from the adoption of cloud and these opportunities appear to be incremental for now."

New tech is a challenge and an opportunity

New technology such as AI, machine learning and automation continue to drive global innovation, and the channel will undoubtedly be asked about these areas by their customers soon, if they haven't already.

But channel firms don't necessarily have to be at the bleeding edge of these technologies to benefit from them.

Resellers may not be in a position to lead the adoption of these solutions, but all this tech still requires an infrastructure on which to run - particularly to handle the vast amounts of data that these technologies use, according to Softcat CEO Watt.

"[An] area which for me creates optimism not just for now but sustainable growth engines for our business, is around demand for data and the appetite to digitise and instrument our environment," he said.

"There are thousands of examples where a deployment of sensors in a solution is adding value and driving IT demand.

"That new wave of data creation needs to be computed, stored, accessed, networked, secured and analysed. That drives a huge amount of demand."

"Everybody needs technology to solve business issues or create competitive advantages and I think it is hugely exciting. That trend is here to stay. There is a huge amount of technology still coming to market, such as AI, robotics, drone technology and machine learning."