​Opening the door to data centre change in Australia

​Opening the door to data centre change in Australia

With a growing appetite for innovation and digital transformation, Australia sits on the cusp of significant disruption in the data centre.

Adam Wilkinson (APC by Schneider Electric); Naveen Shettar (Thomas Duryea Logicalis); Cam Wayland (Channel Dynamics); Chris Weber (Hewlett Packard Enterprise); James Henderson (ARN); Andrew Gillard (Mycom); Hafizah Osman (ARN); Nathan Vandenberg (Dimension Data); Louis Tague (Veritas); Simon Xistouris (AC3); Matthew Kates (Zerto); Richard Mitton (BigAir Group) and Nick Stranks (Ethan Group)

Adam Wilkinson (APC by Schneider Electric); Naveen Shettar (Thomas Duryea Logicalis); Cam Wayland (Channel Dynamics); Chris Weber (Hewlett Packard Enterprise); James Henderson (ARN); Andrew Gillard (Mycom); Hafizah Osman (ARN); Nathan Vandenberg (Dimension Data); Louis Tague (Veritas); Simon Xistouris (AC3); Matthew Kates (Zerto); Richard Mitton (BigAir Group) and Nick Stranks (Ethan Group)

From a partner perspective, a changing market brings changing customer demands alongside, creating new criteria for vendors seeking to recruit new players within the channel.

“We work with vendors that align products and services so we’re consuming and providing those in the same way as the customer is,” AC3 CEO, Simon Xistouris, said.

“Quite often a customer asks for utility-based model as-a-service but as a partner, we’re not getting the same from the back-end. So we’re taking on the position of risk and harmonising it. Also vendors must come in at the right price to avoid competing with the channel because if they get it all right it works out well for everyone.

“But if not the partnership becomes very clunky and the person in the middle carries the risk.”

For Hewlett Packard Enterprise, Weber said the vendor continues to ensure it “works more closely with partners” to ensure both parties align revenue streams in the future.

“We’re evolving as our channel evolves and we’re making huge strides to ensure we are were our service providers need us to be, ensuring that we align those revenue streams to ensure profit for the channel,” he added.

For those transitioning to a service-based business, the importance of revenue models continues to heighten as partners align with vendors demonstrating considerable financial health within the market.

“I’m stuck with technologies that I’m consuming currently and I use the word consume and not buy because they have the right financial model,” Oriel CTO at BigAir Group, Richard Mitton, added.

“But as a technologist it saddens me because it’s not necessarily the greatest technology, but it’s the right commercial model that I need as a sales person to provide the right commercial outcome for my customer.”

Louis Tague (Veritas)
Louis Tague (Veritas)

When engaging with vendors, Mitton said the challenge lies in the combination of hardware and software products and the subsequent sale of offerings.

“In an ideal world the vender can separate selling the hardware at cost plus margin, then charge the value of the software on top,” he explained.

“Especially in this hyper-converged world because I can then add exponential value through my sales team by having the right technology aligned with the right commercial model.”

Yet for those challenger vendors in the market - breaking through the barriers to take on the traditional players - entering the Australian market requires research, knowledge and in-depth go-to-market strategies.

“A lot of vendors enter the market with messaging specific to the US or Europe, but how does it relate to local government in Australia,” Thomas Duryea Logicalis national practice manager, Naveen Shettar, said. “Especially within the data centre space, vendors must take the time and effort to enter the industry with relevance.

“The vendors that take technology and translate it into viable customer outcomes across all major market segments are the ones we find easier to partner with.

“It allows us to approach our customer base and get results and success because the vendor has brought something innovative to the table and allowed us to differentiate from the competition.”

When outlining the criteria of a successful vendor in the new age of the data centre, Ethan Group account director, Nick Stranks, asked one simple question - “How can we commercially justify investing our time in your?”

“Because ultimately everything costs money and my staff have to either sell or learn, there’s not a lot of in between,” he explained.

“But once you move past the technology piece will my customer even notice I have a new vendor onboard, and will they even care? Most of our customers don’t care what is in the stack they just care about outcomes which changes the conversation.

“If it’s a managed services product then customers are even less likely to be involved in the decision making process because we’re selling an outcome.”

For Wilkinson, the importance of the channel is built around “creating scale” for the vendor.

“We can’t capture the entire market and rely on our partners to provide coverage,” he explained. “But crucially there’s a maturity coming through the channel today that isn’t simply a reseller mentality, it’s a partner mentality which changes the game as we’re operating side by side to help the customer.

“It’s never been about the data centre as such, rather the technology that’s driving data centre change. We’re now seeing resellers move away from traditional reselling practices to creating partnerships with vendors which is causing the channel as a whole to mature.”

Matthew Kates (Zerto) and Andrew Gillard (Mycom)
Matthew Kates (Zerto) and Andrew Gillard (Mycom)

Partner prospects

Looking ahead, leading data centre technology suppliers are attempting to respond to and anticipate significant changes in demand brought about by cloud and hyper-scale data centre operators, among other factors.

According to analysts, these changes will unfold over the next several years, but all face growing pressure today to develop cost-effective and energy-efficient products, as many data centres of all kinds seek to drive down costs.

Until 2020, the market is widely expected to experience the highest rate of change in almost every area, becoming more software-driven with infrastructure management systems increasingly integrating with IT management systems.

“At Zerto, we’re a software company,” Kates added. “We protect workloads and we allow those workloads to live in different places, whether that be on-premise, in a managed service environment or in a public cloud.

“We’re essentially providing choice for the market, allowing businesses to whatever is right for the application. We see an opportunity for partners to provide outcomes that no other technology platform can, which is why we’re focused on helping our channel sell and deliver these superior outcomes to customers.”

Delving deeper within the data centre, the information stored within a facility is beginning to warrant its own strategy to ensure its economic benefits are fully maximised.

“Information is the most valuable asset for an organisation, next to their people,” Tague outlined. “That’s where we see the market heading and partners that are finding success are the ones talking to customers to help them understand the information assets they have, alongside how they can manage that data more effectively.”

By 2020, Gartner predicts that 10 per cent of organisations will have a highly profitable business unit specifically for productising and commercialising information assets.

“It's not necessarily about the infrastructure anymore,” Tague added. “It’s actually about that asset of information and the applications that support that information.”

Nathan Vandenberg (Dimension Data)
Nathan Vandenberg (Dimension Data)

Vendor intent increasing around managed services

In looking through the lens of a partner, strong vendor intent is coming from senior level personnel, those that recognise both the opportunities and challenges of transiting to managed services models.

“We’ve started some vendor relationships this year that are new to our business and they have been quite progressive in terms of understanding the need to move to this kind of model,” Dimension Data general manager of data centre business, Nathan Vandenberg, said.

“They have adapted a lot quicker and overall I believe there is good intent to get to there we need to be as a channel, and the force of the market will help drive this change.”

Yet for Vandenberg, conflict remains further down the chain with individual field reps, as opposed to the decision making executives at the top.

“We still see guys under pressure to hit 30 day sales cycles and they don’t always align with our vision,” he explained. “We might be taking a customer on a 1-3 year sales journey around a services type of engagement and at times that can be at odds with the vendor.

“There’s still a lot to play out and change will come but as integrators we’re asked to carry the burden of a lot of the risk in some equations.”

Categorising data centre vendor behaviour:

  • Revolutionary disruptors are typically new to the data centre market bringing disruptive technology or a new business model, often both, which often includes startups.
  • Protectors represent the status quo. These traditional data centre infrastructure providers are driven by the protection of installed base and preservation of profit margins.
  • Evolutionary disruptors complete the picture, bringing innovations and cost advantages from adjacent technology markets. For example, one vendor could be a protector in the server market, but an evolutionary disruptor in storage.

This roundtable was sponsored by APC by Schneider Electric, Hewlett Packard Enterprise, Veritas and Zerto. Photos by Maria Stefina.

This article originally appeared in the December issue of ARN magazine - to subscribe, please click here

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Tags dimension databigairveritasac3ZertoHewlett Packard EnterpriseThomas Duryea LogicalisOriel IT

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