Are managed services important in that equation?
SM: I don't have actual figures, but managed services is going gangbusters. That's falling into a number of things - basics such as managed backup and security, as well as partners looking at the archival offering and providing that on a hosted basis. There is no doubt that the channel is seeing significant opportunity to value-add and to a large degree, selectively outsource components of a customer's business. We saw the outsourcing boom in the 1980s and 1990s where organisations outsourced entire infrastructure to an EDS or CSC. That began to unravel in the last decade, and now we're seeing selective sourcing - for example, I don't need to devote my resources to backup, I will give it to my trusted partner.
But surely SMBs are still looking for somebody to manage the lot?
SM: That's exactly what's occurring - a managed services provider is typically delivering a handful of services, rather than just providing a managed backup service. Our four biggest areas are backup, security, endpoint and asset management, and archiving. There's also interest in synchronising data between offices and customers. SMBs want one throat to choke - and one partner to manage these things for them.
One of the key things we're doing to help our channel is re-engineering our licensing model for services providers so they don't have to buy the asset. All they have to do is pay a quarterly in arrears fee for whatever product they use.
CS: In the SMB space, customers just want the service levels and they will pay a price for that. A lot of our channel is either using our products or our managed services as a product to manage their customers.
What are some of the challenges for a vendor such as Symantec in the changing security and storage markets?
CS: I don't see many challenges per se; it's genuinely opportunity. We are a very big company and very successful. We have lots of competitors, and they will continue to try and chip away at us. Then there are new companies such as VMware emerging, that have great technology, but we have a lot of solutions in that space, as well as complementary solutions. It's a big area and they're not the only player in that market. The biggest challenge is how we leverage the significance of the opportunity that sits in front of us.
The challenges I see are more around potential economic pressure from the sub-prime market. I think the local market is feeling a little pressure already, but whether it affects the buying appetite of the major corporates is still a question. Generally, you will feel that at the retail end first and we have seen some of that consumer side wane with 12 interest rate rises.
The channel will provide us with success and growth. It's going to come down to our ability to execute.