'If I had a datacentre business I'd be worried' - Crayon CEO

Rune Syversen of Crayon Group also says some partners are at imminent risk from vendors pushing for more direct business

The CEO of European licencing heavyweight Crayon, Rune Syversen, has issued a warning to vendors not to underestimate the importance of the channel, at this year's CRN European Channel Leadership Forum

"There is a fairly interesting quote by Satya Nadella that I think that we can all agree with: Eventually everything is going to be connected to cloud and data. And all of this will be mediated by software.'

"The vendors see the world as being one of self-service, automation and APIs. And some of them really think that resellers and distributors are the dinosaurs of the world, and that we will be extinct in a short while.

"From the vendors we hear words like pay as-you-go and seamless applications on tap, which are great things. But the world is not getting simpler."

Vendor channel mismatch

Syversen said that for all partners, it's unavoidable that "cloud equals complexity".

"If you look at Amazon, they have 65,000 taxation metres in their cloud, and I challenged Microsoft on this and they said ‘You know we have even more".

"And that tells us something about the way the world is moving."

However, he did cite the success story of Adobe.

"Most of you will know that Adobe went all in on the cloud in 2013. For me, there hasn't been much innovation in the suites. But in 2013 the revenues of Adobe were $4bn. In 2018 they were $8bn. Do you know what happened to the share price? It rose 900 per cent. That tells us about the magnitude of what is going on out there. It is a fantastic opportunity."

Cloud penetration across Europe - led by politics

Crayon operates across 31 countries globally, working with over 4,000 customers.

Syversen also gave his view on how he sees cloud adoption varying across EMEA.

"I think the markets are at very different maturity levels across Europe. If you look where I'm from in the Nordics, we have been in the cloud for a very long period of time because there is no political agenda.

"We typically will trust anyone that comes with an American passport, and think it's OK. So even the public sector has moved fast. I think it is moving fast her [the UK].

"But if you look at the Microsoft figures in Germany, there is 39 per cent cloud penetration. Where I'm from in Norway we have 68 per cent, which tells you a lot about the aspects of the market as well as the political dimension.

"If you then move to eastern Europe, we're down in the 20s. And if you ask for the reason, I think a larger part that you might think is down to geo-political aspects."

It's time to jump out of the pot

From a reseller perspective, Syversen thinks what will drive the customers to the cloud, is actually not being so reliant on vendors.

"I guess you're all very familiar with boiling frog syndrome. It's very cosy in that boiling pot, particularly for those of us who are used to the landscape of living off the incentives that vendors have been giving us. It's been extremely nice.

"The question now is when is the time to get out of that pot? We are all asking the same question. From my view, the hyperscalers, including Microsoft, are moving in and their ambition to a large extent is to engage with customers directly…

"However, I do think vendors will soon discover that there is more to managing a customer relationship than just the transaction.

"I think it will still disrupt the way we go to market for the next two to three years.

"And we've seen this before with HP, Dell and Oracle… We have to really find the secret sauce to remain in the mix again."

Syversen sees two types of firms that are most at risk: those in datacenters and small companies.

"The scary side of this is that there is a lot of consolidation going on. If I had a datacentre business today, I would be very worried about the hyperscalers…

"Also, if you are small, you are at risk. The big guys are consolidating."

In his eyes, the danger is particularly acute for smaller countries in Europe.

"In my view there is only room for two or three resellers in the smaller mature markets," he said.

And if you go to the eastern European markets you have huge compliance issues…

"However, the UK, Germany and the US in my view are fairly similar because they are so huge. You can actually have very strong local players that are not threatened by consolidation."