From The Editor | April 23, 2010

What Is The State Of The IT Market?

By Gennifer Biggs, security, storage, and managed services editor

Tiffani Bova, VP, research, indirect channel programs and sales strategies at Gartner, kicked off the last day of the Ingram Micro VTN event with her insight into where the IT markets are headed. Trends covered by Bova included:

  • Alternative delivery models and managed services, the competition and vendor pool is changing
  • Vertically focused services providers are building experience alongside technology
  • Expanding vendor ‘solutions' is intensifying competition to gain a larger footprint in IT infrastructure
  • ISVs are seeing increased value as software integration becomes more critical
  • Channel business models are shifting, decisions are coming about future sales and delivery models
  • Consolidation is driving expanded expertise and coverage

So, what does that mean to you? This year you'll have to deal with cloud but with continued slow adoption rates. Gartner expects most end users to adopt a hybrid model, a combo of on-premise and off-premise, for at least the next 10 years. Plus, it forecasts only about 25% of end users, SMB through enterprise, will move to cloud by 2013, so most will remain with you, wanting the same service and technology offerings as they use today.

In terms of IT spend, Bova says overall IT spending in 2010 has been revised up based on hardware sector strength, and forecasts for Q1 include pockets of opportunity around IT management services and integration. "Integration is key, especially around cloud services," says Bova. "And, IT management is becoming more and more critical for end users as they try to further streamline their environment. Virtualization is at the tip of that iceberg in terms of opportunity with less then 25% of environments virtualized." In addition, SMB IT spending is forecast to remain strong.

One of the most interesting pieces of advice that Bova shared was about the pitch VARs need to use in 2010. While CIOs are always looking for greater productivity and cost efficiencies, the high interest in saving money has slipped slightly. "Last year, it was all about saving your customers money, everything was very price-oriented. Now, the conversation is about growth and innovation," says Bova. "So, if you're marketing on the idea of ‘let me save you money,' you want to think more about ‘how can I help you innovate so you can grow your market share.'"

When Bova addressed managed services, she forecast tremendous opportunity, with as much as 32% revenue growth expected between now and 2013. So, don't stop focusing on ways you can move your customers from break/fix to managed services, there is still much money to be made there.

Bova's channel recommendations for 2010:

  • Move away from focusing on cost-cutting
  • Invest in greater specialization and competencies
  • Increase predictable revenue streams into your business
  • Conduct due diligence on ‘cloud' and create an action plan for how you will interact with that solution
  • Rationalize unprofitable business and clients. If you are adopting managed services as a business model or dive into the cloud, and your clients are disinterested, then you need to make a plan to find clients better aligned with your business plan.
  • Hire sales and technical talents with business background

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