Supporting customers with the right products and services to match should be top of mind for the channel this year. Many industry experts are also touting 2013 as the year Cloud services reach a point of maturity in the market, and this also plays into the importance of security.
But before delving into offering the newest technology on the market, Distribution Central executive chairman, Scott Frew, said resellers should properly monitor and manage their customer technology installation base to help maintain customer relations.
“Everyone is trying to sell new kit, but they are not actually mining the install base of equipment already in their customer’s environment,” Frew said. “They are missing vast opportunities and they need to invest in tools to manage that.
“They need to make sure customers are getting the right service and the opportunities, and defend against their competitors coming in and getting the business from them.”
Services based on Cloud computing, field maintenance and providing a wide array of customer support were also key areas where resellers can attract more margins.
“They need to invest in products and services where they can attract margin and leverage off their core business,” Newport Capital founder and managing director, Lou Richard, said. Companies need to consider hiring quality people that are oriented towards profit and margin rather than just volume, Richard said.
He reiterated a saying: ‘Volume is vanity, profit is sanity’.
“Focusing just on increasing volume is not a good thing to do because it puts working capital strains on the company, so you must improve or maintain margins as you grow revenue, and there are a whole variety of ways to do that,” Richard said. “Motivate your staff to produce margins and profits.”
Cloud coming on strong
Anittel managing director, Peter Kazacos, said the level of noise customers are making in the Cloud space indicates it is a valid option that businesses need to consider this year.
“The market momentum is there, most of the suppliers are coming up with Cloud offerings, and the fact that major players such as Microsoft and Amazon are in the market suggest that businesses should be there,” Kazacos said.
Kazacos advised companies to be mindful of how they play and participate in the Cloud space, whether to team up with a Cloud provider and resell the Cloud offering or actually invest in their own Cloud offering.
“Resellers should pick the most lucrative option for their company depending on its size They should evaluate what their customers are wanting and what business they are in before getting on the Cloud,” Kazacos said.
Resellers need to consider how they’re adopting technology changes in the market to their own business and have the right skilled staff to support it.
“With the economic uncertainty customers are looking for business models that are more elastic and cost models that can adapt to their current business conditions without having to outlay significant amounts of money upfront,” Trend Micro A/NZ head of strategic products, Adam Biviano, said. “They would rather pay for IT services on a demand basis and resellers need to learn to adapt their business to this.”
NextGen Distribution managing director, John Walters, said the Cloud and hosted environment has matured and businesses will begin transforming towards Cloud-based offerings.
“Cloud is becoming an option because the services and technology have improved,” Walters said. “The proliferation of those pushing it out into the market is increasing and businesses are becoming more confident in the Cloud offering. Resellers and systems integrators that are transitioning to the Cloud strategy are doing well.”
Strength in relationships
This year will also witness a change in the role of the channel when it comes to vendor relationships.
“The vendor choice is no longer driven by sales organisations, it will be driven by the service provider,” Westcon Group Australia managing director, David Henderson, said. “One of the most intriguing things we’re going to witness this year is the role of service providers. How they embrace the marketplace and the channel.”
The strength of the relationship between partners and their vendors will also become more important, VMware A/NZ director of channels, John Donovan, said.
“Partners are looking at vendors to put skin in the game and that’s characterised by a change in the sales approach and going from a ‘sell -to’, to transforming that to a ‘sell -with’ joint investment strategy,” Donovan said.
“They’re looking at us around the planning cycle, not just to deliver training and education, but investments around skills transfer, competencies, enablement, demand generation and how to jointly manage sales opportunities and what sort of investment we’re going to make in helping to manage the customer as well. Our approach around investing in resources to help partners, actually build services practises around the technology, is becoming more critical.”
Lenovo A/NZ product business manager, Lindsay Tobin, said it was important for resellers to partner with vendors offering innovation.
“It’s always important to listen to your customers and understand what they want and be prepared to offer innovative solutions. It’s not necessarily about the cheapest product in the market, it’s about what’s going to suit them,” Tobin said.
Every aspect of security needs to be considered beyond simply securing your network at the perimeter, WhiteGold strategic advisor, Leigh Howard, said.
Tech trends such as the Cloud, mobility, BYOD and Big Data analytics are extending the reach of the enterprise well beyond corporate firewalls, which means security must become even more risk and scenario-based.
Businesses that have not got into the security space yet, should align themselves with a partner that is already in that space, and not necessarily with a big security company that is broad-based, he said.
“If they don’t already have any security expertise inside their business - it would be quite expensive to invest in certification and come up to speed - then they need to partner,” Howard said.
Taking notice of new vendors making a play for the Australian market is another factor resellers should take into consideration when it comes to offering a point of difference and taking advantage of new opportunities in the market.
“Resellers that aren’t investigating what’s coming down the track and sticking to the big players, may be missing out on opportunities,” Nextgen’s Walters said. “There are plenty of smaller start up companies that are building their technology for the Cloud and Big Data environments and starting to get traction very quickly. These challenger brands are going to shake up the market a bit.”
Innovation and productivity
Ovum public sector research director, Kevin Noonan, said instead of looking at cost cutting, staff reductions and making people work harder, the focus is now on finding innovative ways of doing business, but with short return on investments (ROIs).
“We’re at the point now where some organisations are still looking for savings and have worked out that you can’t just keep on asking people to tighten their belts so they have started looking at ways to increase productivity instead,” he said.
Noonan suggested to build on productivity, businesses should review their value propositions and think about short-term ROIs, start realigning their products around particular outcomes, as well as tweak their marketing style to suit who they are marketing to.
Channel Dynamics co-founder and director, Cam Wayland, offered key five tips to consider now:
- 1. Start thinking about time as a resource, as businesses could be putting it elsewhere that gives them better ROI.
- 2. Businesses need to decide on the things that they do not intend to do, it is easy to get dragged and committed to other things.
- 3. Businesses need to evaluate their portfolio of customers, clients and prospects with the ones that would provide them with the best potential. Large clients are not always the most valuable.
- 4. Do a skills alignment check to update themselves with the relevant skills, certifications, technical resources, sales resources, etc. so they can secure clients they are after.
- 5. Approach key vendors with an updated marketing plan that fits with a new financial year budget.