Welcome!

IBM Cloud Authors: Liz McMillan, Elizabeth White, Yeshim Deniz, Pat Romanski, Stefan Bernbo

Blog Feed Post

Channel challenged in hybrid IT model

Process, Automation and Partnership

[London, 1 October 2013] The channel has to change; it has been guilty of keeping cloud away from smaller and mid-sized businesses. New routes to market are by-passing both IT departments and traditional channels, however just as channel selling methods need updating; it is likely that most salespeople won't survive the transfer to the new models.

These were some of the key messages delivered to the Managed Services and Hosting Summit by Tiffani Bova, Gartner Distinguished Analyst. As she told the large audience in London on Thursday 26th September, "The more uncomfortable you feel, the more successful I have been."

Not everything has to change rapidly, or completely. Steve Pearce of distributor Arrow ECS confirmed that there was still a huge traditional distribution business, but warned that the channel needed to invest ahead of change. "There is not a rush to managed services but change is happening." Even the cloud term itself is on the way out: "It's not about cloud; it's all about what the end-user needs and wants," he said.

The disruptive nature or the managed service model requires that the MSP embraces the use of technology in their own organisation to be able to deliver, manage and bill services correctly. Even as a successful managed services specialist itself, Tim Walker, MD, Taylor Made Computer Solutions, told the summit that its own managed services provision had been held back because they had failed to acknowledge the level of investment needed in technology and processes.

Tiffani Bova highlighted the new routes to market and channels competing with traditional IT sales. IT departments are losing control of IT buying, she said. "Those outside IT are now capturing more of the spending budget. Marketing, sales, supply chain, finance and HR functions are buying more IT, not just as a service, but also software and infrastructure. They prefer to buy as a service."

This is a major break from the traditional IT department role which had had a controlling function. Now, other departments will implement solutions, and the IT department has to secure it after the event. And channels, which have traditionally been selling technology to IT departments have been resisting change:

Vendors can't reach these smaller customers without channels. The traditional channel is saying it is not going to introduce this, but customers are most challenged, not by technology, but with management and operations, so this is the opportunity. "If you can work out how to help them with the management of managed services, you have an opportunity to capitalise on where the customer feels they have gaps," she said.

The change is being driven by a nexus of forces: "Social, mobile, cloud, information - those four are colliding in the organisation and are what is driving the managed services business."

New channels are emerging, including those "born in the cloud." These new channels are agile, effective and focussed on services, not with reselling. They don't get caught up in 'who bills the customer? And who owns the customer?' and they don't talk about MDF, deal registration schemes, rules of engagement, using vendor marketing tools. They say all they need is a stable environment they can build on, and a predictable market so they can manage it going forward.

An example of a business born in the cloud is Cloud Direct. Their Chief Business Officer, Eliza Rawlings, told the conference that Cloud services brokerage means aggregation, integration and customisation. Because the model relies on customer word of mouth, Cloud Direct has a policy of making customers "not just satisfied but advocates" to help reduce churn. Cloud brokering means very different P&L numbers, and demands extremely flexible billing systems because of changing special offers from suppliers, which means the company has to be master of all its processes.

And even established IT businesses cannot reply on reputation in this new market: Even IBM has to prove it can deliver compliances - that's the legal bit. "And SLAs with exclusions are ripped apart by client lawyers," warned Jerry Crossfield, IBM UK & Ireland MSP Leader. The mid-sized companies rely on channels for advice on technology, he agreed, so it was vital for them to offer managed services. "The mid-sized firms use local trusted business advisors so cloud could be even more right for them than enterprises," he suggested.

Throughout the whole of the event there were three key messages that kept surfacing from the different speakers, Process, Automation and Partnerships. The secret of success appears to be about focusing on your processes from sales lead generation and acquisition through to service delivery and billing. Without the right processes in place profitability and customer retention are impossible.

Automating those processes so that you get them right every time is also key and that means investment in technology. The final message that came through loud and clear is that without partnerships the MSP will struggle to keep up with customer demands.
Partnerships with vendors, service providers, distributors and Cloud Service Brokerages will not only enable the MSP to get to market more quickly with their service offerings but will remove much of the financial and technology risk of trying to do everything oneself.

Organised jointly by IT Europa and Angel Business Communications, the Managed Services and Hosting Summit is the UK's leading managed services and channel event. This year's event took place at the Lancaster London Hotel on 26 September 2013. Further details can be found at: http://www.mshsummit.com

About IT Europa
IT Europa is the leading provider of strategic business intelligence, news and analysis on the European IT marketplace and the primary channels that serve it. In addition to its news services the company markets a range of database reports and organises European conferences and events for the IT and Telecoms sectors. For further details visit: www.iteuropa.com

About Angel Business Communications
Angel Business Communications is an industry leading B2B publisher and conference and exhibition organiser. ABC has developed skills in various market sectors - including Semiconductor Manufacturing, IT - Storage Networking, Data Centres and MEMS manufacturing. With offices in both Watford and Coventry, it has the infrastructure to develop a leadership role in the markets it serves by providing a multi-faceted approach to the business of providing business with the information it needs. For further information visit: www.angelbc.com

For further information contact:
Alan Norman
Tel: +44 (0) 1895 454 604
Email: alan.norman@iteuropa.com

Carly Stephens
Tel: +44 (0) 1923 690 223
Carly.Stephens@angelbc.com

Source: RealWire

Read the original blog entry...

More Stories By RealWire News Distribution

RealWire is a global news release distribution service specialising in the online media. The RealWire approach focuses on delivering relevant content to the receivers of our client's news releases. As we know that it is only through delivering relevance, that influence can ever be achieved.

IoT & Smart Cities Stories
According to Forrester Research, every business will become either a digital predator or digital prey by 2020. To avoid demise, organizations must rapidly create new sources of value in their end-to-end customer experiences. True digital predators also must break down information and process silos and extend digital transformation initiatives to empower employees with the digital resources needed to win, serve, and retain customers.
Early Bird Registration Discount Expires on August 31, 2018 Conference Registration Link ▸ HERE. Pick from all 200 sessions in all 10 tracks, plus 22 Keynotes & General Sessions! Lunch is served two days. EXPIRES AUGUST 31, 2018. Ticket prices: ($1,295-Aug 31) ($1,495-Oct 31) ($1,995-Nov 12) ($2,500-Walk-in)
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
Machine learning has taken residence at our cities' cores and now we can finally have "smart cities." Cities are a collection of buildings made to provide the structure and safety necessary for people to function, create and survive. Buildings are a pool of ever-changing performance data from large automated systems such as heating and cooling to the people that live and work within them. Through machine learning, buildings can optimize performance, reduce costs, and improve occupant comfort by ...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
IoT is rapidly becoming mainstream as more and more investments are made into the platforms and technology. As this movement continues to expand and gain momentum it creates a massive wall of noise that can be difficult to sift through. Unfortunately, this inevitably makes IoT less approachable for people to get started with and can hamper efforts to integrate this key technology into your own portfolio. There are so many connected products already in place today with many hundreds more on the h...
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
Charles Araujo is an industry analyst, internationally recognized authority on the Digital Enterprise and author of The Quantum Age of IT: Why Everything You Know About IT is About to Change. As Principal Analyst with Intellyx, he writes, speaks and advises organizations on how to navigate through this time of disruption. He is also the founder of The Institute for Digital Transformation and a sought after keynote speaker. He has been a regular contributor to both InformationWeek and CIO Insight...
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...