Despite being taken virtual for the first time due to the coronavirus pandemic, this years' Canalys Channels Forum did not disappoint in delivering punchy one-liners from Steve Brazier or the candid observations from channel partners in attendence.
After watching all of the video interviews between Canalys analysts and bosses from resellers and distributors including Computacenter, Bechtle, Tech Data and more, we bring you all the controversial statements, honest opinions and bold predictions to come from the conference.
‘Consumption models are not what customers want' - Computacenter CEO Mike Norris
Vendors made consumption models a central theme at this years' Canalys event.
HPE, Dell, Cisco and others have all launched consumption or subscription-based payment options on products ranging from hardware, cloud and software over the last few years.
This years' Canalys Channels Forum saw HPE's Antonio Neri give a lengthy promotion of its GreenLake platform during his keynote, while Lenovo's Yang Yuanqing used his to talk up device as-a-service.
The argument is that consumption models will allow customers to make fewer up-front costs for products and services and allow them to consume IT in a more flexible way.
But, according to some leading channel CEO's who spoke to Canalys' analyst teams as part of the conference, consumption models do not always end up better for the customer.
Computacenter CEO Mike Norris told Canalys boss Steve Brazier that consumption models are a "lie" and are often not what customers want.
"If I was a vendor, I would want a consumption model. I see absolute logic in why I would want to sell as a service and not sell capital goods. Hundred percent, hundred percent, right. So I understand why vendors want to sell that way. I do think vendors have to be careful. Because I don't think customers want to buy that way if they can avoid it," he said.
"If you have a product that is so popular and so pervasive, like Windows or Office, where you can say 'if you want to buy this product, this is how you've got to buy'. Then knock your socks off, absolutely go as-a-service.
"But when you're offering a product in a competitive environment and you say 'buy my product as a service', and your competitor is saying 'just spend the capital' then you will lose market share unless you are very clever."
He added: "It is a lie, Steve. It is a fallacy. It is just not what people really want. Now, the marketing budgets and marketing machines of our vendors that want to sell consumption models are brainwashing the industry and brainwashing their sales forces to say, ‘capex to opex, capex to opex, capex to opex. It's wrong, it's wrong," he said.
Norris said those vendors putting too much emphasis on consumption models and operate in competitive segments of the market are losing market share.
"They're blaming the pandemic, they're planning all sorts of things. They've been fixated with a consumption model and it means they are losing market share," he said.
In a separate interview, another senior reseller boss - the head of Bechtle's IT system house and managed services business, Michael Guschlbauer - also said that there are some "hurdles" for consumption based-IT.
He said that many of his customers look into the details of consumption models and find that using traditional financial services is more effective.
"When you take a look at the details of the existing consumption models, there are some hurdles. And the customers from the DACH region are very interested in the details," he said,
"And at the end of the day, they compare what is better. And when you take a deeper look at the details, sometimes the model with normal financial services are better than a consumption model. But from my point of view it is a question of the evolution of these models. So obviously, we need fast progress in the evolution of these models."
‘I worry for the souls of people working from home' - ALSO CEO Gustavo Möller-Hergt
The CEO of Europe's largest independent distributor expressed his concern for the toll working from is taking on workers across Europe in his interview with Brazier.
He said that many workers are under tremendous pressure and are afraid to lose their jobs.
"I believe this working from home is creating big pressure on human beings. I am concerned about how to maintain the spirit of these human beings when you're working with a company and at the same time not losing their soul, or their intellectuality, because they are swamped with Teams calls or with meetings.
"There are a lot of people feeling a lot of pressure and a lot of people who are afraid to lose their jobs. Let's not forget that some of these people working from home, are in a small flat, or work from the kitchen and they have their families. I believe it is extremely important that we take care of this."
‘I am running a company of more than €4bn in revenue and my visibility is a week or two' - Atea CEO Steinar Sønsteby
The Atea CEO touched on the responsibility he feels in guiding his 7,500-strong workforce through the pandemic and the daunting unpredictability the industry faces.
"The scariest thing right now is I am running a company of more than €4bn in revenue per year and my visibility is a week or two. That is the scary thing. But I know I have a lot of very good people across 90 cities who are much closer to the customers I can be. But the visibility is very low and that is scary," he said.
"It is something a lot of us are thinking about - trying to prepare for things we don't know are going to happen. We had a good Q2, but Q3 so far, and we are not very far from the end of it, has been just more of the same."
‘Corporate resellers are now suffering more than the SMB partners' - Tech Data EMEA boss Patrick Zammit
Brazier told delegates in his keynote that the larger corporate resellers have emerged as the clear winners for the pandemic while smaller SMB resellers struggled.
He said corporate resellers benefited from increased spending in the public sector to fulfil nationwide contracts.
But, according to Tech Data's EMEA boss Zammit, it will be the corporate resellers that will be hit hardest over the next few months, with SMB partners seeing a reverse of fortunes.
In his conversation with Brazier, Zammit argued that corporate resellers could be affected by a slowdown in government spending after an initial push to adapt to the pandemic earlier in the year.
"Now lately, particularly because of the low demand for infrastructure where corporate resellers play a key role, what we're seeing through distribution is that corporate resellers are now suffering more than the SMB, whereas the SMB is coming back," he said.
"We have seen that clearly in the UK for the last two months. So I would have agreed with you a few months ago, but lately it seems that corporate resellers, at least through distribution, are suffering more than the SMB partners."
He added: "Maybe the government spending which helped a lot in the beginning has slowed down, which means big corporations and end users are now very cautious with their spending."
‘You can't win new logos while working from home' - Cancom CEO Rudolph Hotter
Amid a wider industry debate on whether the IT industry should enforce at least a partial return to the office or embrace remote working, Cancom CEO Hotter opened up on the difficulty of winning new business without face-to-face meetings.
Speaking to Canalys COO Rita Chaher, Hotter also said that he wished he could meet with more vendors face-to-face.
"The new ways of communication, remote working, helped us stay in contact during the lockdown. But we all know, you can't win new logos working from home. Especially in the IT industry, the offices are closed and for me it is a balancing act but we have to be able to talk to partners and customers," he said.
"The traditional vendors are all in home offices and I would wish that we could get more personal contact on-prem. Health is key and a number-one priority but I think we should not forget the business."
‘All our customers are focusing on is the short term' - SCC boss James Rigby
The SCC boss opened up on the challenges affecting his business, and particularly highlighted how the pandemic has affected decision making and long term planning for his customers.
"My experience is people and businesses tend to flourish when they're in a stable environment. You can have the confidence and security to invest and expand and take bold steps. Of course that went very early in the crisis and is still absent today is that stable environment, and modelling a business of scale against this crisis has been a great challenge. We've had all manner of models running what might happen to the economy during the crisis, and nobody knew it would unfold so quickly," he said.
"In terms of planning, things have focused on the short term instead of the mid term. We've all focused on the short term - what happens in the next three to six months and how do we keep the wheels on the bus and help our clients."
‘Infrastructure projects will come back, there's no question' - Insight CEO Ken Lamneck
Insight's Lamneck said he was confident that the channel will rebound and enjoy a surge of business once the pandemic passes.
He drew on his experience leading a channel business through the financial crash of 2007/2008 and when the dot.com bubble burst in the early 2000s.
The CEO said he's expecting a surge in spending in on-prem infrastructure projects as soon as Q2 next year.
"You can't put off those expenditures. What we're seeing is companies want to become more digital, but they've also got to make sure their infrastructure is modernised so they've got to make that investment. We're seeing those projects are being delayed, but they will come back, there's no question."
"That's pretty exciting for me, history has taught us that's the case. I don't have a crystal ball of knowing when that happens but it's certainly what we're preparing for."
Lamneck's comments come as Canalys said the on-prem infrastructure market has been one of the biggest losers of the coronavirus pandemic so far.
Bechtle's Guschlbauer shared similar expectations to the Insight chief exec.
"Most of our customers are renovating their datacentres. They're coming from a legacy infrastructure and now they're thinking about how they can leverage multi-cloud architecture, so having some applications in private clouds and using some public cloud services," Guschlbauer said.
"They're not able to do that with their legacy infrastructure. There will be a wave for the next three or four years where customers will renovate their datacentres in order to use public cloud services in the future and bring this multi-cloud architecture in place. We see growth in this area."
'Coronavirus is inflating acquisition prices' - ALSO CEO Gustavo Moller-Hergt
Thie distribution boss said that the COVID-19 pandemic has caused valuations in the channel to sky rocket, leading to high price tags for M&A.
He said acquisitions could take longer in this current environment as a result.
"Corona increased the expectations of purchasing prices. I don't know if these expectations can be paid by different players in the market…"
"I believe that because there are these expectations of price which are there today because of corona, then maybe acquisitions will take a little bit longer to make possible."
Hotter from Cancom also said that market valuations have hit an all-time high, which has in turn bumped up the price tags on potential acquisition targets.
"We are constantly scanning the market and we are ready to acquire targets based on a reasonable price performance ratio. Yes we will do acquisitions but valuations have to be right," he said.
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Find out who won and follow all the action live via our CRN Women in Channel liveblog
We highlight the most controversial statements, honest opinions and bold predictions from this years' Canalys Channels Forum event