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Channel opportunities in a time of change

Customer transition could be a positive for the channel says Philippe Fossé, vice president of EMEA Channels, EMC

We live in an era of change every bit as important as the transition from illumination to the printing press or from the horse-drawn carriage to the motor car. The new technologies of social, cloud, big data and mobile are transforming every industry completely so that the working practices of today will in the near future be unrecognizable; quaint, even.

But this is a transition that is still in motion. Businesses are most certainly embedding new native cloud technologies and applications but they are not yet at a stage where they can sweep away their legacy systems. The move to the next era of computing is therefore an evolution, one that is progressing at a pace dictated by businesses and their desire to mitigate the potential risk that novelty, by its very nature, brings with it.

For the channel this transition is very good news indeed. We already know that the next era of computing will create huge opportunities for channel businesses, but it is only now becoming clear that the period of transition we currently find ourselves in, is in itself a powerful source of growth for channel organizations.

The opportunity lies in the fact that legacy applications still, to a large extent, need care and maintenance. This requires organizations to attempt a delicate balancing act: to reduce the cost of their existing applications and infrastructures so they can free up funds to invest in new generation systems that are capable of driving significant competitive advantage. All of this must, of course, be achieved while running both old and new workloads efficiently and effectively.

It is precisely here that channel organizations can target growth, but only if they get their business model correct. In this case, we contend that channel businesses can best achieve growth if they specialize - either in legacy, mainframe solutions or in the next-generation of computing technologies and applications (i.e. cloud, big data, mobile, etc.).

In the case of the latter, channel businesses that were created after the advent of the new era of computing, and which based their entire businesses around these technologies, will be best placed to consult on them and put in place transformational systems for customer organizations. They are the natural specialists for the new era of computing technologies.

Similarly, the traditional reseller that has thrived for decades in the mainframe world of computing that is (still - but only just) the norm today, are well-placed to continue to use their unique expertise to keep the lights on while businesses still need to use this legacy technology. As we have mentioned, there is a 29 per cent annual growth rate for such application workloads - representing a very real opportunity for these resellers.

This is not to say that this class of reseller should limit themselves however. They should not, for example, continue to simply sell boxes. Instead they must acknowledge the changes that are afoot by evolving their sales approach to one centered on selling solutions. By doing so they will build a relationship with their customers where they are seen as consultants and service providers rather than simply kit providers.

This change in how they are perceived by their customers will allow them, when the time is right, to evolve into specialists for the new era of cloud-based solutions. They will take the journey to the cloud with their customers, building trust and deeper relationships all the while.

For a third type of reseller, this current period of transition will not be as profitable. This is the channel business that chooses to become a 'jack of all trades'; to deliver a mix of both legacy and new technologies. This type of company will struggle for two reasons. Firstly they will need to invest more widely to ensure they have the skills within their organization to service both eras of computing technologies. This will be a cost that specialist resellers will not need to tolerate. Secondly, they will face competition not only from other resellers, but from within their own business.

For example, if a customer comes to them with a specific workload requirement, how do they service it? Do they suggest the legacy solution or the cloud solution? Who decides? If it's the customer, then this is hardly a consultancy. If it's the reseller, then how do they decide under which circumstances they promote a given solution? Any such reseller will find that they are pulled constantly in two directions and they will neither satisfy their customers nor achieve their sales objectives.

In the longer term we will expect to see the channel completely change as the new era of computing reaches tipping point and phases out legacy systems entirely. At that stage resellers will become service providers, and cloud brokers, tailoring cloud services across hybrid infrastructures to meet their customers' needs.

Until that time however, there is money to be made out of this period of transition. To make it, channel players need to specialize, stick to their specialism and concentrate on becoming indispensable consultants to their customers.

This was last published in September 2015

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