Six execs on the trends that will shape the channel in the 2020s
Channel stalwarts look into their crystal balls to predict what trends will drive the industry as we enter a new decade
Simon Harbridge, CEO, Stone Group
What will be the biggest channel-shaper of the 2020s?
Security's still going to be one of the big things because if you think of how everywhere and everyone's connected on a global scale, and you've got this almost industrial-level cybercrime going on, it's in danger of being a little bit like the Wild West when it needs to be controlled and secure.
There's also probably something that no one has thought of yet, which is going to come out of left field and which will change the landscape.
How will this trend impact the channel and your business?
As a reseller, we're in the luxurious position of not having to pick a technology that's going to win. I think the reseller is in a slightly different position to the actual vendors and the technology providers in that we have to be aware of these changes and understand the marketplace and what our customers' requirements are, and fit them with the best and most appropriate technology.
We've not got to bet on something at the beginning when it's a new technology, but we've got to be in a position to understand what's coming and be in a position to build the right partnerships and sell those technologies to our customers. We're not right on the bleeding edge, we're one step behind.
But we've got to be aware of everything and be in a position to resell it meaningfully without missing out on the next big thing.
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Six execs on the trends that will shape the channel in the 2020s
Channel stalwarts look into their crystal balls to predict what trends will drive the industry as we enter a new decade
Neil Murphy, group managing director, Bytes Technology Group
What will be the biggest channel-shaper of the 2020s?
The last decade saw a lot of consolidation in the channel and, interestingly, the widespread adoption of cloud has created a whole new swathe of newer market entrants and this will once again create a feast of M&A activity.
How do you predict it will impact the channel?
The market will be dominated by mega VARs at one end and very small services businesses at the other end. Most of the mid-sized players will be acquired. The channel players who succeed will either have huge scale or will be small and stay small types of businesses. Hybrid cloud, clients "unclouding" and Edge computing will help maintain a healthy market opportunity for traditional VARs who will continue to dominate the big ticket IT spend.
How will this trend impact your business?
Our business will be affected, but as a sales-led organisation, our people are "coin operated" and will automatically go where they make the most money. As a multi-vendor reseller, we will offer more managed services to our customers and explore partnerships with other vendors. With almost 8,000 customers across the Bytes Group in the UK, we will never be short of opportunity and with scale we will continue to be an attractive partner option for the biggest vendors.
So I foresee continued growth as customers seek deep and meaningful partnerships with their suppliers in the search for added value. Additionally, we are seeing interesting co-sell opportunities with some client sectors which is a new departure for us and a potential area of significant new market growth opportunity. I genuinely cannot wait to get going in the New Year with a real spring in our step to break down new barriers and hit new heights.
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Six execs on the trends that will shape the channel in the 2020s
Channel stalwarts look into their crystal balls to predict what trends will drive the industry as we enter a new decade
Roger Harry, founder, Circle IT
What will be the biggest channel-shaper of the 2020s?
As more business adopt "as a service" and the cloud offerings, we need to change what we deliver or it will be ‘evolve or die'.
The IT market never changes as quickly as people would have you believe and lots of trusted advisers will continue to push tin but as the majority will drive this the evolution will continue at pace.
How do you predict it will impact the channel?
More born in the cloud companies will start delivering clear value add and clever stuff around AI, virtual reality, etc which will ultimately drive the engagement, and force a lot of us to follow to get through a prospect's doors.
How will this trend affect your business?
It will definitely affect our business; we have to invest in the right type of people to drive this or we run the risk of drying up.
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Six execs on the trends that will shape the channel in the 2020s
Channel stalwarts look into their crystal balls to predict what trends will drive the industry as we enter a new decade
Hayley Roberts, CEO, Distology
What, in your opinion, will be the biggest channel-shaper of the 2020s?
The more immediate trend we have seen and will continue to see, in resellers is to include some form of managed service offering or even ‘SOC-as-a-service' due to the increasing nature of subscription-based licences from vendors.
This will have a significant impact on the channel as traditional procurement methods will have to be stepped up and a more agile and robust way of purchasing licences will become part of channel's value, in my opinion. In this world of increasing instant gratification with all things consumer, this will absolutely roll into the business world and speed and ease of use will be the main USP.
How do you predict it will impact the channel?
This will mean channel has to step up and be ever more present in engaging customers who could become more fickle if monthly subscriptions replace annual billing. The channel will have to have more than one string to its bow and be looking at a service and solution proposition rather than a pure licence sell.
This has been changing over the years anyway, but just as cloud adoption has seen a sharp increase in the last couple of years so will true SaaS and business application adoption and therefore monthly based license demands.
How will this trend affect your business?
Distology has already developed a very good platform for licence procurement, consumption and monthly billing so we are prepped but we do need to stress to vendors that they need to support the monthly commits rather than expect the channel to house the burden of the annual commit.
Our value piece has many aspects with the main one being agile and trying to think ahead of the curve. Nobody is ever fully prepared for change. Every day is a school day which is what makes Distology's role in the channel so exciting and we build as we go!
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Six execs on the trends that will shape the channel in the 2020s
Channel stalwarts look into their crystal balls to predict what trends will drive the industry as we enter a new decade
Margaret Totten, co-founder and CEO, Akari Solutions
What will be the biggest channel-shaper of the 2020s?
I think the biggest shaper of the next decade will be around AI and Intelligent Automation. For the last few years these have been buzz words but not had any real tangible substance behind them. This has started to shift and will fully come to the fore over the next few years.
Companies now realise that there are substantial benefits in AI and automation, from things like the end user employee experience, freeing up resources to do work that can impact more, right up to how AI can tackle the big issues from climate change to full and real accessibility for all.
Service companies aren't just selling physical products anymore, it's all about the core benefits - how that particular piece of technology, or that step change around automation, can empower employees to do more and make a positive impact with innovation.
How do you predict it will impact the channel?
I think we will start to see far more niche, boutique agile players joining the market. Companies that would before not have fit into the traditional channel model, like marketing agencies and accountants will shift into becoming technology channel partners with unique IP and core offerings around their areas of expertise.
This is a big shift for a channel that has always been focused on tech organisations. I think even now we are starting to see a shift in large organisations, who would have before only worked with big players, now working with niche startups as they offer something different and this trend will continue to grow.
How will this trend impact your business?
I think it will generate more competition, but that isn't always a bad thing as I think it will help continue the trend for partner-to-partner plays and will continue to generate more innovation. You can't innovate without competition to keep up with, so this will be a positive for ourselves and the market.
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Six execs on the trends that will shape the channel in the 2020s
Channel stalwarts look into their crystal balls to predict what trends will drive the industry as we enter a new decade
Glen Williams, CEO, Allvotec
What will be the biggest channel-shaper of the 2020s?
Consolidation. I think resellers are going to have to try and drive their services businesses harder, their EBITDA margins are going to have to be higher.
It will be interesting to see what happens in the next 10 years because some owners of VARs are coming to an age where they maybe think ‘I don't want to carry on doing this anymore' and those businesses are going to have to figure out how they move their EBITDA from one or two per cent to 10 per cent if they want to maximise their return. I think that's the challenge for a number of resellers over the next decade.
How do you predict it will impact the channel?
I think this will affect the £10-100m turnover companies. I know so many of these companies where the owner is probably taking a decent salary of £300,000 a year and he's having a nice life and he goes to the vendor events and it's all good fun.
Most people set up their business in the 80s and 90s and some are getting to an age now where they are asking themselves if this is something they want to carry on doing. If those people want to exit and sell their businesses - which some of them may want to do because there is going to be further consolidation - they have to get their EBITDA margins up as they're too low, particularly when the recurring revenue from those businesses is so low.
So they're going to have to improve their profitability and their recurring revenues.
What will drive this trend?
I think private equity is interested in companies where they can generate cash. A good product business generates all of the cash but on the flip side of that, you want to have recurring revenue so that you have certainty of earnings - you have to have a balance.
There's a lot of money to invest out there but I think the ones that get the balance right between cash generation and recurring revenues are the ones will be really successful.