Lenovo and HP slated, and Google's acquisition targets - five takeways from Canalys Channel Forum 2019

Steve Brazier also claims that resellers have 'outgrown' large systems integrators

Fingers pointed at Lenovo and HP over undercutting the channel through online stores

In their respective Q&A sessions, Lenovo's COO Gianfranco Lanci and HP's newly appointed CEO Enrique Lores came under fire from channel partners for undercutting the channel through their online stores.

CRN recently reported that several EMEA partners were "disgusted" by HP's pricing on its Online Store, where some claimed products are up to £200 cheaper than what partners can procure through distributors.

The accusations received the highest number of "likes" out of any other questions submitted during both HP's and Lenovo's Q&A session from channel partners in the room.

Responding on stage, Lores from HP rubbished the idea that the HP Store is undercutting the channel.

"Two or three years ago we had a big change with the online store. We transferred the majority of the business that we were doing on the online store to the channel and this has not changed. So our key go-to-market model is the channel and this is what we did when we separated and this is still our strategy," he said.

Lanci from Lenovo conceded that some products could be cheaper online in the US, but claimed that there's no way this is the case in EMEA.

"Cheaper than distributors? Not in EMEA for sure, I don't think so. Cheaper in US, maybe, but then there's a different dynamic in the US to EMEA," he said.

Google Cloud will acquire at least one hardware and/or software company within 12 months

Brazier claims that Google Cloud will snap up at least one hardware or software vendor within the next 12 months.

The prediction follows broad and ongoing speculation that Google Cloud is eying up a hardware acquisition, with many seeing hyperconverged player Nutanix as an ideal fit.

Google Cloud is lagging behind Microsoft and AWS in the race to public cloud dominance, claims Brazier and needs to make "a bold move".

"Google Cloud is very much the number three of the American cloud companies, and they need to catch up," he said.

"They've investing a lot of money. They won't catch up unless they make a bold move. And Google is rich; they have plenty of cash."

The Canalys CEO said Google needs to acquire a large install base, and establish a stronger channel in order to keep up with the likes of AWS and Microsoft.

But, taking to the stage to give a keynote, Nutanix's SVP of EMEA, Sammy Zoghlami, poured cold water on a potential buyout by Google, claiming that it would put its "openness" with other cloud vendors in jeopardy.

The exec cited that Nutanix has gone from zero to 15,000 customers globally in the last 10 years, attributing that success to its ability to work with other vendors.

"We are here for the long run now," he said. "You can't say nothing will ever happen, because acquisitions can happen. You can start predicting it could be a good fit [with Google] except for one point: the idea of being tied to one cloud provider.

"And today I think part of the success is to be open with the ecosystem. If one brand is acquiring Nutanix suddenly, our openness and the ability to work the same way with all technologies on the market will vanish."

Amazon Outposts will be a top four on-premise server vendor within three years

Along a similar theme that the industry's biggest public cloud vendors will move in on the traditional reseller space, Brazier predicted that Amazon will become a "top-four" on-premise server vendor in the US and western Europe within the next three years.

This prediction comes after the launch of Amazon Outposts last year - the cloud vendor's answer to hybrid cloud by running AWS services on premise or through VMware Cloud.

Outposts, which is set to launch before the end of the year, claims its infrastructure is fully-managed and supported by AWS.

Brazier showed channel delegates an image of the Amazon Outposts server rack, which will be launched next month.

"The revolution of the public cloud, which they're going to need the channel to deliver, install and maintain, looks like this," he said. "And they'll probably succeed."

If Brazier's predictions manifest, AWS Outposts is set to disrupt established server vendors. According to IDCs figures for Q1 this year, the top five server vendors by market share are Dell, HPE, Inspur Lenovo and Cisco.

VMware's Pat Gelsigner and Cisco's Chuck Robbins will not share a stage by the end of 2021

While Michael Dell, Pat Gelsinger and Satya Nadella appeared together on stage in an iconic moment at Dell Technologies World earlier this year, Brazier claims some CEOs won't be sharing the limelight anytime soon.

Competition between Cisco and VMware is heating up as VMware continues to make a grab for the coveted software-defined WAN market.

Cisco currently maintains almost 50 per cent market share in the SD-WAN market, claims Brazier, but VMware is "catching up fast".

"VMware came from an acquisition standpoint to try and take control of the network away from Cisco. Cisco and VMware were close partners before Dell acquired EMC, we saw Satya Nadella with Michael Dell, and Pat Gelsinger a few months ago on the same stage. The one prediction we're sure about is you will not see Pat Gelsinger and Chuck Robbins together in public because the software defined space is a key battleground and will continue to be until at least 2021."

Resellers have ‘outgrown' and ‘outperformed' global systems integrators

Brazier told delegates that if you invested in a channel company five years ago then you would have more than tripled your investment today.

The CEO spoke about the outstanding performance of many global resellers over the last 12 years. CDW, Bechtle, Computacenter and others have all grown their valuations and performed exceptionally well financially.

The statement echoes recent observations from channel stalwart Phil Doye, who recently echoed that if UK VAR Kelway were still in existence today, it would be worth in excess of £1bn.

"You have outgrown and outperformed the global system integrators. People do not know that I don't know why they don't know that it's a tremendous success because all of your customers are transforming and you're performing with tremendous growth rates again. The future is bright, but the current is very, very strong now," said Brazier.

He also said the European channel is set for further consolidation and stood by his prediction last year that CDW will soon acquire a top ten European reseller.