The following predictions from Havier Haddad, Channel and Alliances Director , Turkey, Emerging Africa & Middle East, EMC are highlighting the big trends, changes and issues affecting the EMEA technology channel in 2014 and covering what Haddad believes will happen in the industry over the next year.
Prediction 1: The channel basics will become even more important
2014 promises to be another exciting year for the channel where success still comes down to getting the basics right. To do this, channel businesses must ensure that their vendor relationships are based on the core pillars of simplicity, predictability and profitability. As in 2013, resellers will look to vendors that have a stable business model, are easy to work with and that can provide them with blockbuster products, solutions and services.
Prediction 2: Cloud Computing and new players in the channel will drive transformation
Like last year, 2014 will continue to see changes in the roles and responsibilities of channel businesses: service integrators will become resellers; resellers will become service providers; and end users will in many cases become service providers for their own stakeholders in addition to becoming service providers for other companies as well.
This change will accelerate further due to the entrance of significant players to the storage channel, such as Google and Amazon who are proving disruptive to the channel by offering businesses scalable pure-play public cloud services that promise to meet end-user demand for IT services which can deliver more for less money. Many resellers and vendors will need to change their business models in order to remain viable in the face of this competition.
It is not yet possible to say just how fast channel transformation will take place in 2014 due to one key variable: how much of total IT workloads will stay on premises versus off premises structuring the consumption model and what the channel must sell. This variable will create a great deal of uncertainty in the year ahead. We know we are already seeing more IT workloads moving off premises and delivered as a service, but we simply do not know how quickly this transformation will occur. Some resellers may stay with a more traditional model and limit themselves to selling on premises, private cloud infrastructures. Some resellers will mix on-premises infrastructure on-premises sales with some ‘as a service’, off-premises propositions. Others will migrate completely to become service providers.
Prediction 3: Distributors will continue to flourish
This year we saw distributors increase their share of the EMC EMEA channel business by more than 10%, to just below 60%. Several factors will continue to drive this hyper growth over the next 12 months. 2014 will see them build on this success and continue to flourish in the new cloud environment. Distributors are able to take a variety of services from different vendors and bundle these onto an outsourced IT infrastructure and market the services as white-label cloud services portfolios. Resellers then just need to pick the services they wish to sell.
Prediction 4: As channel businesses transform, market consolidation will increase
With cloud computing and new market entrants completely changing the market, resellers will need to acquire companies that have the skill sets they are lacking. Resellers that are looking to extend beyond the infrastructure model will, for example, look to buy cloud service provision companies. Conversely a service provider might see the need to acquire some reseller capabilities. This is not simple consolidation, they are strategic acquisitions made with the aim of transforming the reseller’s business model. When it comes to the distributor segment, size will still be what matters most and this will fuel consolidation. This is especially true during the period of sustained economic uncertainty we are experiencing as businesses chase growth.
Prediction 5: Cloud Computing goes to the next level while Big Data makes its mark
In 2014 we will see more systems become virtualised than ever before as Software Defined Storage gains traction. Businesses will look to virtualise their entire IT infrastructures including everything from servers and storage to network and applications. This increase in the scope of virtualisation is so important because it enables big data management and with big data management will come a range of new analytical services.
Over the course of the next year these advances will enable resellers to take concrete big data business models to their customers. For example, resellers will be able to go to retailers and explain the business value of customer geo-location data, showing how it can be used to enhance the customer experience in-store and encourage them to make the most of relevant offers and promotions. Or, resellers can show car insurers how to use unstructured data to build up much more accurate risk profiles. In short, next year we will see Big Data analytics move from being a concept to a business value proposition for end users and this will bring with it opportunity for resellers.