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The changing face of the channel

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There are several hot trends affecting the channel at the moment, with business transformation at the fore, causing savvy channel players to look at specialisation and maturity.

“Cloud, mobility, social media and big data trends are affecting the entire ICT industry, and pretty much every other industry around the world, driving transformation in the way business is conducted,” says Simon Campbell-Young, CEO of Phoenix Distribution.

“The number of industry platforms is definitely booming, particularly where cloud-based services and other services platforms are concerned. We are seeing managed services, cloud and virtualisation become a starting point for how businesses of all types and of all sizes are adopting technology to change the way they sell to and provide for their clients.”

He says they are concentrating not only on how technology can boost their businesses, but what it can do for their customers too. “This transformation can be seen in a couple of emerging trends, which are seeing channel players lean towards specialisation strategies. It is also affecting areas such as managed services, customers and marketing, as well as training and up-skilling.”

According to Campbell-Young, the partner community is becoming more focused on specialisation or vertical expertise. “Those channel players who are focusing on growing vertically will enjoy far higher growth rates than those only focusing on horizontal specialisation.”

He says there are several types of specialisation, namely IT consulting, integrators of data, applications and systems, and solutions experts, who can tailor make and build solutions highly specific to their customers’ needs, or aimed at solving a highly specific problem.

Speaking of the cloud, he said more and more end-companies are making use of a mixture of cloud and on-premise solutions, meaning that their channel suppliers will have to become skilled at hybrid systems, in terms of integrating, evaluating and managing them. “Not only will they have to display technical competence in hybrid environments and architectures, they will have to do this within highly specific industries. Channel players who can do this well, will have a significant advantage over their competitors.”

Similarly, he says managed services providers (MSPs) will need to up their game and become more technologically savvy and sophisticated. “MSPs will also need to look to verticalisation and specialisation, or partner up with other MSPs who have the specialised skills that they are lacking. MSPs will need to address their limited resources and scalability, and we will see more and more a move from MSPs to integrated technology providers, as MSPs address where the business needs to go, and actively suggest and implement solutions that can meet these business objectives.”

There is no doubt that today’s customer is king more so than ever before. “Customers are potentially more disruptive to business than anything else. They call the shots. They dictate how, when and where they want their services delivered. It is the customer who influences who they will use as both provider and partner to get the job done. Technology providers are no longer in control of the buyer’s journey.”

This in turn is driving a far more competitive environment, and Campbell-Young says we can expect to see more competition from myriad sources in the future. “Channel players are competing with service providers, with vendors, with digital marketing – and they will have to become far more agile to respond to customer and market needs timelessly.”