Q&A | May 29, 2014

From ASCII Columbus: Channel Trends — And Anti-Trends — To Watch

By Jim Roddy, president, Business Solutions magazine

VAR MSP Channel Trends

Gary Bixler provided many interesting insights during his “2014 Industry Outlook and Trends to Watch” presentation May 29 at the ASCII Success Summit in Columbus, OH. And something tells me the trends he outlined will carry over into 2015 as well.

Bixler, the founder and principal consultant at Bixler Enterprises and a CompTIA partner, segmented his talk into three sections: Channel Trends, Technology Trends, and Technology Anti-Trends (what is pushing against the trends).

4 Channel Trends

1. When it comes to your channel business, it can be OK to stay in two lanes. “At one time we thought VARs would completely make the shift from traditional break/fix to recurring revenue and managed services,” Bixler said. “The reality is that there will be a hybrid approach between the two, and that’s OK. Most companies are in a moderate degree of transformation.” Bixler shared a CompTIA chart that showed 59 percent of channel executives expect a moderate degree of transformation from break/fix to the as-a-Service business model, and 64 percent anticipate growth in managed services in their business.

2. Time to rebrand the Trusted Advisor? “In the next 5 years, the workforce will move from Baby Boomers and Gen Xers to Gen Y in huge numbers,” Bixler said. “Their expectations of technology are different from what you’re used to. The way you’ve served as the trusted advisor for your clients is about to be turned on its head, and you’d better be ready.” A sub-point to this trend is that many IT firms are seeing a shift of purchase authority to line-of-business executives, such as the VP of sales and HR director. “Who you talk to and the door you knock on is changing,” Bixler said. “As solution providers, the discussion we have with clients is changing. It’s more about business benefits and not technology. You need to change your marketing materials.”

3. Back to basics — reinvesting in technical expertise. “You need to develop software expertise in your company,” Bixler implored the near 100 channel executives. “The margins in the future will be in software and services. It’s hard to find people who know how to write software. You need to meet this challenge because that’s where your margins will be.” The anti-trend is that not every channel firm needs to be selling leading edge products/solutions. “There’s still money to be made in some old-school technologies, but I wouldn’t make that your main business,” Bixler said.

4. Channel dynamics – friend or foe? The line is blurring between what constitutes a partner and competitor these days, Bixler said. “Don’t have your head in the sand when it comes to partnerships. You need to protect yourself, but you need to explore partnering opportunities.”

4 Tech Trends and …

1. Cloud wars intensify. Keep an eye on the actions by public cloud providers Amazon, Windows Azure, and Google and private cloud enablers OpenStack, Eucalyptus, and CloudStack. “There is a lot of ground still to be covered with open standards,” Bixler said.

2. Diverse devices flood the market. “This trend is more than about smartphones and tablets. It’s about wearable computing devices (e.g., Google Glass), smart displays and smart boards, and mobile-to-mobile devices that communicate with each other — the Internet of Things. Those are huge exploding opportunities.”

3. Big Data has a little sibling. Packaging and visualizing data for decision making will be the next step of adoption.

4. Software’s appetite is not satisfied. Gartner predicts 6.8 percent growth for software, compared with overall IT growth at 3.1 percent. “Growth is being sparked by software and services. If your business isn’t in software, I highly recommend you look at software,” Bixler said.

… 4 Tech Anti-Trends

1. On-premise systems are still in play. “We are seeing some public-cloud users that moved into private cloud. They had security concerns or regulations that couldn’t be met in the public cloud. They like the scalability and ease of use, but feel they need to be behind that firewall. We’re seeing nearly a quarter of businesses doing that. That’s an opportunity for you (MSPs).”

2. PC is still big business. Laptops are still what companies are issuing to employees. “They may also give them tablets, but laptops are still king,” Bixler said.

3. Many firms are building data foundations. CompTIA research finds 80 percent percent of firms have a moderate or high degree of data silos.

4. Hardware is still required. Lenovo purchases provide insight into the future of hardware.

Bixler also listed the top five key concerns keeping tech executives awake at night, many I’m sure you can relate to:

  1. price-sensitive customers hesitant to spend
  2. government (e.g., regulation, tax policy, inaction, etc.)
  3. labor costs/availability of skilled workers
  4. competition from new firms entering space/disruption from new technologies or business models
  5. margin pressure

The ASCII Success Summit – Columbus is being held May 28-29 at the Renaissance Hotel in downtown Columbus, OH. It is one of eight solution provider-focused conferences ASCII is hosting in 2014. For more information on ASCII, go to www.BSMinfo.com/go/InsideASCII

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