2013: The year Cloud took over

The hits, the misses, the surprises and the big trends that emerged

Our experts agree: Cloud was the key facet that defined channel business in 2013. While much of the talk at the beginning of the year was more about Cloud’s potential, if anything the application of the technology exceeded expectations.

That is just one of the key points that emerged as we asked channel thought-leaders for their view of the year – the hits, the misses, the surprises and the big trends that emerged. And they had plenty to say. But Cloud clearly covered 2013.

“It proved to be an even stronger trend than we predicted. In 2012 it was all about and talking about it and powerpoint demonstrations. 2013 was the year we actually started doing it. And it took off,” Channel Dynamics director, Moheb Moses, said.

Pushpull Marketing founder, Laurie Sellers, noted the Cloud has entered the mainstream consciousness. “It’s not just some obscure terminology anymore. It is more likely that the average person on the street knows what it’s about,” he said.

Dunkenny Consulting managing director, David Henderson, said this rapid change caught a lot of channel operators off guard. “It has definitely had an impact on the channel – some have been very slow to adapt. The telco companies, in particular, have taken hold here, and they are definitely the big winners this year.”

Distribution Central executive chairman, Scott Frew, said the transition has been tough for some of the traditional box-shifting resellers, who need to move to service models.

“We’re seeing the smart resellers moving into ‘service provider mode’, while the others have hit the skids a bit. Those that haven’t made the transition are struggling. We don’t expect that to change over the next year. Our Cloud products are selling very well,” he said.

Geographical barriers

Dimension Data CEO, Steve Nola, said it had broken down geographical barriers, and his company is seeing a lot of local and international customer demand for the company’s products.

“Cloud is set to take the biggest percentage of spending on new technology within the next few years. Where we are seeing some slower adoption rates in the enterprise are in the more complex cloud applications, such as unified communications, where there are a lot of integration elements, external services and dependencies at play,” he said.

Shoretel’s ANZ managing director, Jamie Romanin, is more sceptical. “There has been a lot of press given to Cloud-based communication services this year, but the reality is more like a bunch of teenagers gossiping about sex. Everybody is talking about it. Everybody thinks everyone else is doing it. Everybody thinks they want to do it, but they’re not really sure how to do it, or if it’s going to be as good as it’s cracked up to be.

“The reality is that until customers are emotionally ready to give it a go, and in a committed and caring partnership with their vendor that they trust, it’s not something that they want to do… just yet. What they do want right now is a way to dip their toe in the water.  They want the flexibility of a UCaaS model, without the restriction around it needing to be completely Cloud-based. How to consume, financially, seems to be more of interest than that of architecture.”

IBM director Business Partner Organisation, Phil Cameron, said Cloud is actually about more than Cloud itself, its about a mix of several technologies at once, which makes the task difficult for some resellers.

“Few organisations have the expertise to actually find the right mix of infrastructure, service and software to resolve the real-world challenges of the digital economy – Big Data, BYOD and application deployment.  There is now a greater need for IT partners to provide technology consulting services to their customers,” he said.

The BYOD question

BYOD, in particular, draws a lot of focus here, with Sellers adding it seems to be piggybacking off Cloud adoption. “Mobility has definitely gained a lot of its traction because of the Cloud. It effectively means that users are organising their own ‘virtual server’ where ever they are – you can now take the office with you,” he said.

However, Distribution Central’s Frew thinks BYOD is mostly a fad. “Issues around BYOD have been a bit of a beat up. Most businesses with highly sensitive information issue their own phones. If you don’t use that phone, you don’t get access. So it’s not a big deal,” he said. While ARN’s guest experts were unified in their belief that Cloud has defined 2013, the list of big flops for the year is long and varied.

Overall, the economy remains a sticking point, with most of the pundits agreeing that market conditions overall remain sluggish. The political mess surrounding the election also produced business uncertainty during the lead in.

Henderson said the post-election ‘bounce’ had been a disappointment, with many in the channel not seeing the boost predicted. However, Frew disagreed. “It’s caused a boom for us, the Liberals getting in. We’ve seen a good quarter so far. It’s added that level of business certainty that we weren’t seeing earlier in the year.”

The industry has also seen a lot of consolidation and acquisition, a trend Henderson thinks will continue into 2014. “A good example was NTT coming in and buying local business. This is only the beginning and this trend will continue into 2014.

“We will see more and more smaller partners merging, and more activity from international partners. This movement will change the industry’s distribution model,” he said.

Driven as much by Cloud, Nola said it also drove a massive change in channel budgets – a focus more on opex than capex.

“IT budgets are no longer the sole domain of the IT department – other operational units in the business are starting to be allocated an IT spend as well. It was expected, because in the last few years we have seen an increasing move from enterprise buyers to either hosted infrastructure or Cloud-based services, and away from on-premise systems.”

The big hardware flop for the year was the Microsoft Surface tablet, which Microsoft also refused to sell through the channel. “The Surface launch ignored all of the company’s strengths, and it looked like Microsoft had decided that the only way to be successful was to be Apple,” Moses said.

Nola said BlackBerry’s new BB10 range of devices was also a key flop, and another example of a former industry leader stumbling.

Managed Print Solutions was tipped to take off in 2013, but Moses said it went nowhere. “And I don’t know if it will either next year either,”he added.

The other disappointment for the year was Big Data.

“It grew as expected, but only because we didn’t expect it to grow much at all. It’s all still too focused on the tech, rather than the application and skills being used. Most companies haven’t even started analysing their existing data, and are already looking at future big data. They are running before they can walk,” Moses said.

2013: BIGGEST SURPRISES

David Henderson, Dunkenny Consulting
Michael Dell taking his company private: “The ramifications for the market will be very positive. Expect Dell to place a greater focus on the channel. It has also made some good acqusitions in the last 3-4 years and now has a solid portfolio.”

Laurie Sellers, PushPull Marketing
Oracle’s continued inertia surrounding its Sun Microsystems purchase. “We expected when Oracle took over Sun – which was a big deal for us – that Oracle would get their act together. We’d thought we’d see their tech become more like an appliance, that is, they would optimise the software and merge it with the hardware – but that hasn’t really happened. It’s almost like Sun got wiped off the face of the earth. Oracle has lost so much momentum now, its hard to see how they’ll fight back.”

Steve Nola, Dimension Data
Mixed messages surrounding the NBN: “The new Federal Government’s rethink on the NBN. It looks like the Communications Minister Malcolm Turnbull hasn’t completed discounted the idea of FTTP. I guess we will have to wait for the findings from the government’s strategic review before we have a clear view of the direction the NBN will ultimately take.”

Moheb Moses, Channel Dynamics
The rise of 3D printing: “It progressed far further than many had expected. 3D printing went from nowhere, or sci-fi, to something that definitely has legs. It will be the most disruptive technology we’ll ever see over the next 2-3 years.”

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Tags Channel DynamicsDunkenny Consulting3d printingIBMdistribution centralbig datacloud computingNBNOracleShoretelBlackberryBYODPushpull MarketingmobilityMicrosoftSurfacedimension data

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