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Tech Distribution Changes In A Cloudy Industry Telecon 012611 oneill

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Agenda: …

Agenda:

Upheaval comes to tech industry distribution.
Visionary distributors will ride the wave.
Tech channel marketers beware!

Published in: Technology, Business
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  • Source: Wipro Technologies (www.wipro.com)
  • Source: Ingram Micro ( http://www.ingrammicro.com/ext/0,,23348_19722_23360,00.html ). Source: Avnet ( http://www.ats.avnet.com/services/index.asp ). Source: Arrow Electronics ( http://ecs.arrow.com/services/cloud.html ). Source: MSPmentor ( http://www.mspmentor.net/2008/06/05/tech-data-vs-ingram-micro-on-managed-services/ ).
  • Source: Marketing Advocate, Inc.
  • Source: Microsoft Clip Art
  • Source: Microsoft Clip Art
  • Transcript

    • 1. Teleconference Tech Distribution Changes In A Cloudy Industry
      • Peter O’Neill, Vice President, Principal Analyst
      January 26, 2011. Call in at 10:55 a.m. Eastern time
    • 2. Agenda Diverse forces align to change the business of IT. Cloud computing will change this industry. Channel partners' plans and problems with “cloud.” What about the distributor’s point of view? Call to action
    • 3. The business of IT is becoming empowered Source: January 7, 2011, “BT 2020: IT’s Future In The Empowered Era” Forrester report
    • 4. And three forces of change impact the business of IT Source: January 7, 2011, “BT 2020: IT’s Future In The Empowered Era” Forrester report
    • 5. Self-service challenges the value proposition of IT Source: January 7, 2011, “BT 2020: IT’s Future In The Empowered Era” Forrester report
    • 6. Businesses expect to be more self-sufficient and empowered Source: January 7, 2011, “BT 2020: IT’s Future In The Empowered Era” Forrester report
    • 7. The business environment will be much more complex Source: January 7, 2011, “BT 2020: IT’s Future In The Empowered Era” Forrester report
    • 8. Agenda Diverse forces align to change the business of IT. Cloud computing will change this industry. Channel resellers' plans and problems with “cloud.” What about the distributor’s point of view? Call to action
    • 9. Recap: What is cloud computing? Cloud computing is: A standardized IT capability (services, software, or infrastructure) delivered via Internet technologies in a pay-per-use, self-service way.
    • 10. What will move into the cloud — long-term duality Private Virtual private Public Public transportation Level of sharing Private cars
      • What will move into the cloud:
      • Standardized business logic
      • Horizontal business applications
      • Front-office applications
      • Simple, standardized infrastructure services (IaaS) like storage and compute power
      • Systems with fluctuating load
      • What remains on-premise for a long time:
      • Applications implementing a customer’s intellectual property and competitive business logic will never go into SaaS, potentially onto IaaS and PaaS.
      • Mission-critical back-office applications
      • Many custom-built applications
      • The most mission-critical back-office processes
      • Applications with constant predictable load
      Business value
    • 11. Agenda Diverse forces align to change the business of IT Cloud computing will change this industry. Channel resellers' plans and problems with “cloud.” What about the distributor’s point of view? Call to action
    • 12. Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
    • 13. Channel resellers want to grow Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
    • 14. Channel resellers want to grow their business by adding new services 1% in NA, 10% in EMEA Slightly, 34% in NA, 57% in EMEA Significant, 49%, 16% Double, 9%, 14% Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
    • 15. Resellers’ product sales go down, services up Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
    • 16. Resellers are already providing managed services Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
    • 17. Resellers are planning for new managed services Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
    • 18. Those without managed services see these barriers Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey
    • 19. In summary, resellers are impacted by cloud Vendor Customer Vendor Channel partner Customer Channel partner
      • Resellers’
      • bread and butter
      • is waning:
      • Architectural design
      • Implementation
      Cloud
    • 20. So, good resellers are changing their business models Source: July 10, 2009, “The Changing Yin And Yang Of Tech Vendors And Channel Partners” Forrester report
    • 21. Forrester anticipates a “channel washout” MSPs/hosters can serve more customers + Increase in number of MSPs/hosters + No significant increase in number of customers  Fewer channel partners 1.2M channel partners MSPs/hosters can serve more customers + Increase in number of MSPs/hosters + No significant increase in number of customers MSPs/hosters can serve more customers + Increase in number of MSPs/hosters MSPs/hosters can serve more customers M&A The best marketers 15%
    • 22. Agenda Diverse forces align to change the business of IT. Cloud computing will change this industry. Channel resellers' plans and problems with “cloud.” What about the distributor’s point of view? Call to action
    • 23. Channel resources through the IT buyer lens Source: November 24, 2009, “What B2B Tech Customers Expect From Your Channel Partners” Forrester report
    • 24. Distributors are also impacted by cloud Break up bulk (inventory management) Credit risk VAR training The traditional value pillars of distributors
    • 25. Distributors will change their orientation
      • Historically, distributors provided added value for vendors.
        • Inventory, financing, channel management
        • Sales and marketing
        • Often, a distributor specialized on just a few vendors (or just one).
      • In the future, distributors will be providing a service for resellers.
        • Vendor aggregation
        • Sales enablement
        • Marketing platform
        • Hosting (physical or wholesale)
    • 26. Good distributors will continue to adapt their business
    • 27. Examples of distributors providing MSP platforms Ingram Micro (In Production) “ Seismic is an exclusive Ingram Micro managed services portfolio that helps MSPs quickly and easily leverage and deploy a broad array of managed services, enabling them to manage technical labor resources more efficiently, build and sustain recurring service revenue streams, improve service levels and customer satisfaction, and increase profitability.” Avnet (Planning) “ Growing your business doesn’t mean you have to increase your overhead. At Avnet, we continually invest in high-value services and resources that enhance our partners’ offerings while reducing their cost of business. Throughout your sales cycle, Avnet delivers the comprehensive support you need to achieve your specific business goals.” Arrow Fusion cloud services (In production in US) By aggregating and integrating multiple cloud and managed services offerings, we streamline the selection, engagement, and management process for VARs, allowing you to focus on your core business and client relationships. Tech Data (Reselling only) Some VARs may feel threatened by distributors that enter the hosting market, so Tech Data doesn’t host MSP platforms, but the VARChoice initiative includes a growing range of MSP platform options that VARs can purchase.
    • 28. Distributors will continue to help resellers Problem
      • Financing
        • Vendor – loan/equity
        • Third party – Biz2Credit, On Deck Capital
      • Hook your reseller partners up with your MSP partners.
      “ Solutioneer” it
      • Infrastructure investment is too high.
      • Don’t understand the business model
      • It’s too difficult to find/staff the people with the requisite skills.
      • Add a people finder to your online partner community.
        • Embed a job search engine — CareerBuilder, Monster
      • Enablement/certification program
      Product training Sales training Marketing training Business model training Channel enablement maturity curve
    • 29. Resellers also need help in marketing Size Mktg. staff Marketing 80% $1 million to $15 million Zero to one FTE Maybe one email campaign per quarter, some collateral 15% $15 million to $100 million One to three FTE 1/2 email/phone campaigns per quarter, more collateral 1% $100 million-plus Two to seven or more FTE One email/phone campaign per month, comprehensive collateral
    • 30. Either distributors or vendors can provide this help through partner marketing
      • Content syndication
      • List management
      • Email marketing
      • Search marketing
      • Video marketing
      • Partner community management
      • Lead management
    • 31. Agenda Diverse forces align to change the business of IT. Cloud computing will change this industry. Channel resellers' plans and problems with “cloud.” What about the distributor’s point of view? Call to action
    • 32. Distributors — change or die!
        • The tech industry is overrun with distributing entities.
          • Globalization, brand consolidation, and cloud will prevail.
          • To focus on physical product distribution, consolidate your portfolio and your vendors.
          • To expand your business and thrive in a cloudy market, turn your focus to the resellers’ needs.
      Call to action
    • 33. Vendors — understand the changes!
        • Distributors will increase their influence over resellers.
          • Product vendors must include distribution partners as a new communications route to resellers.
          • Understand how to sustain your brand while outsourcing marketing, sales, and business model training to distributors.
      Call to action Resellers — pick your distributor strategically!
        • Focus on your core competencies.
          • Leverage your distributor for supporting services across many business processes.
    • 34. Thank you
      • Peter O’Neill
        • +1 650.581.3864
        • +49 69 959298 39
        • [email_address]
        • www.twitter.com/poneillforr
        • www.forrester.com

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