ARN Editor James Henderson sat down with long-serving Synnex Australia and New Zealand CEO Kee Ong at the distributor’s headquarters in Melbourne, examining the key channel plays for 2016.
“You might think you’re the best Cloud provider in the world but if you can’t even pay your bills, who cares?”
Leaning forward, maintaining eye contact, Kee Ong - Chief Executive Officer of Synnex Australia and New Zealand - appeared relaxed in the face of great industry change.
As the channel takes to the skies in seemingly spectacular fashion, dining out on the earth shattering success of its Cloud-focused partners, it’s all too easy to be swept up in the craze.
Should the Australian market ever consider a slogan, perhaps the words of an English singer songwriter might suffice - “Stop looking down at the grounds, pick it out of the Clouds.”
But in truth, and to battle against the strong industry headwinds, the Cloud conversation is still embryonic.
“Yes Cloud is in the picture,” said Ong, fresh from launching the Synnex Cloud Automation platform in Australia. “It’s not new and resellers have been talking about it for some time now but it’s still very much in its initial stage.
“Of course it’ll be a big play for us this year. We’re going to invest our energy and resources into enabling our resellers to prepare for another big wave of transformations, and that includes Cloud.”
Having spent ten years on the job, surpassing not one, but two billion in revenue during a decade of growth across the country, Ong is well-placed to judge how best to ride the incoming tidal wave of Cloud change.
Unsurprisingly, and befitting of the channel veteran’s methodical approach, it’ll be strategically negotiated.
Ong’s sharpened focus follows the official launch of the Synnex Cloud Automation platform in Australia, solidifying the distributor’s Cloud play across the country.
Heralding a new era for reseller enablement and go to market strategies, Ong said partners can provision and manage Cloud businesses on the platform, as well as ordering Cloud IaaS and SaaS services on demand.
Coupled with the ability to upsell and cross sell - as well as attach hardware with Cloud bundles under one platform - the newly launched platform occupies a strong debut vendor portfolio, including IBM Softlayer, Rackspace, Cirius, Nomadesk, BitTitan, Fenestrae and Egnyte, with “many others in the pipeline”.
“With the new Synnex Cloud Automation platform, we are offering an upsell opportunity for our partners to bundle Cloud solutions with their existing hardware and software sale,” Ong added.
“Channel partners can establish a great recurring business model. This platform also offers significant value to cloud resellers to transact, provision and manage their Cloud business under one fully integrated portal.”
“But there’s still a lot more we can do here in Australia,” cautioned Ong, when examining the current Cloud state of play. “We export our experience and knowledge to other Synnex subsidiaries across the world and in terms of Asia-Pacific, we’re certainly the frontrunners in Australia and New Zealand.
“We’re in that leading pool of markets pushing ahead with Cloud and the industry is changing business models to reflect that.”
For an industry that seldom wants to discuss anything other than an all-out Cloud assault, Ong stands tall as an advocate for caution and compromise. Yes the Cloud train is chugging into town at an unrelenting pace, but perhaps resellers shouldn’t just jump on the first carriage available?
Born-in-the-Cloud players will argue - and correctly - that Cloud computing will become the bulk of new IT spend this year, with nearly half of large enterprises widely expected to have initiated Cloud deployments within the next 24 months.
Gartner called it three years ago to be precise, billing 2016 as a “defining year for Cloud” - backed up by fellow analyst firm IDC that continues to see “healthy double-digit growth” in Cloud IT deployments.
As organisations begin to depend on a blend of as-a-service offerings, alongside traditional infrastructure, to transform in the new digital world, Ong said Synnex’s core focus in the short-term centres on channel enablement.
“We’re going to spend a lot of time working closer with our resellers,” he says. “It’s not just about selling products, it involves process changes at the back-end and selling services, it’s a different game.
“We understand the change and the degree of difference. Cloud isn’t a conversation you can have blinkered.”
Behind the vile of media sensationalism and marketing rhetoric lies a term - Cloud - that is straightforward in delivery but often complex in interpretation.
“The channel as a whole is still trying to understand what the changes mean,” he acknowledged, “and how to implement these changes from a business model perspective.
“Now you’re talking about selling a service instead of a product which is new concept for some resellers. No longer can you sit there and say this server is five times faster so buy this, we’ve moved on from just speeds and feeds.”
Instead, Ong speaks of service-level agreements and a conversation now peppered with technical terminology, built on the need to provide extra layers of solutions that can be wrapped around an offering.
“And of course the systems are different,” he hastily added. “Resellers are now billing monthly or quarterly instead of just processing a one-off transaction and this will impact partners and change how they engage with the end customer.
“The number of transactions will be ten times as many as before but how will the reseller cope with this? It will involve a lot of work in the back-end.”
The Cloud business is not like selling hardware, Ong warned, which represents that age-old easy one-off payment.
“With Cloud and the services that come with it and the layers that can be added, it means one transaction suddenly becomes 12 or 24 and with that naturally brings opportunities and challenges,” he adds.
For Ong, it raises crucial questions; how are resellers going to get paid? With cash up front or over 12 installments? And who’s going to pay the bills?
“Business models are changing and this will accelerate within the next twelve months as resellers work out how to sustain business operations and maintain cash flows,” he adds.
“We’ll be actively enabling our channel to understand what this means for their business, the impacts it will have and why it’s irresponsible to just blindly move into the Cloud. We’re advocating a strategic approach.”
Throughout Australia, resellers with strong experience in the managed services space, as well as the born-in-the-Cloud providers, are helping change the dynamics of the market, providing learning opportunities along the way.
As business models evolve and new ones emerge the landscape changes, with Ong advising partners to pay attention and crucially, “know what you’re going to do”.
In processing over 6,500 orders per day nationally, with 40 percent of shipments coming through the distributor’s Sydney warehouse - a $45 million facility that opened in August 2014 - Ong said that amongst all the Cloud talk, the company’s hardware business is “still going strong.”