CHANNELBIZ LAUNCH  THURSDAY, 15 MARCH, 2012                             1
Who am I?Why ChannelBiz?There’s still money in the channelBut the channel has changedThere are big challenges for the chan...
EVOLUTION OF THE UK CHANNEL ECOSYSTEM     - A NETMEDIAEUROPE RESEARCH STUDY -                                           3
1.   OVERVIEW2.   END-USERS SURVEY : ANALYSIS AND     STATISTICS3.   CHANNEL SURVEY : ANALYSIS AND     STATISTICS4.   CONC...
WHY THIS RESEARCH?1/ Find out how the market trends impact on the channel ecosystem  How vendors shortlisting is influenc...
OVERVIEWPopulations surveyed: two distribution levels     End-users     2nd tier channel players Coverage               ...
SAMPLE STRUCTURE                              (CHANNEL)     Job function              Company size                   Main ...
SAMPLE STRUCTURE                                                    (END-USERS)                   Job function            ...
1.   OVERVIEW2.   END-USERS SURVEY : ANALYSIS AND     STATISTICS3.   CHANNEL SURVEY : ANALYSIS AND     STATISTICS4.   CONC...
VENDORS SELECTION SOURCES                    How do you gather information to create your shortlist of vendors for        ...
IT PROCUREMENT THROUGH SOCIAL MEDIA                   What social media do you currently use for IT procurement ?        I...
IT PROCUREMENT THROUGH SOCIAL MEDIADo you think you will increasingly use social mediafor IT procurement within the next 3...
THE IT PRODUCTS PROCUREMENT CHANNEL                                How do you usually acquire your IT products?           ...
SAAS ADOPTION RATES Do you currently use SaaS solutions?                             Who did you solicit first to enquire ...
1.   OVERVIEW2.   END-USERS SURVEY : ANALYSIS AND     STATISTICS3.   CHANNEL SURVEY : ANALYSIS AND     STATISTICS4.   CONC...
MID-TERM BUSINESS CHALLENGES                What are the key challenges for your business within the next 3 years?        ...
PERCEPTION OF THE CLOUD COMPUTINGHow do you perceive cloud computing with regards your business?                        A ...
TOP CLOUD OPPORTUNITIES                                      Why do you perceive the cloud as an opportunity?             ...
… AND TOP CLOUD THREATS                                        Why do you see the cloud as a threat?                      ...
WHAT TO EXPECT FROM VENDORS AND DISTRIBUTORS WITH REGARDS THE CLOUD                     What do you expect from vendors an...
CHANNEL PLAYERS IN THE CLOUD       In your opinion, what channel players are more suitable for selling cloud services?    ...
1.   SUMMARY2.   CHANNEL SURVEY : ANALYSIS AND     STATISTICS3.   END-USERS SURVEY : ANALYSIS AND     STATISTICS4.   CONCL...
END-USERS KEY INSIGHTSTwo out of three ITDMs plan to increasingly use social media for IT procurement within thenext 3 yea...
CHANNEL KEY INSIGHTSThe main challenge for the channel players is related to competitiveness (72%) throughnurturing new sk...
MID-TERM CHALLENGES FOR THE CHANNEL          GLOBAL CHALLENGES                                    SPECIFIC CHALLENGESSucce...
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The Evolution of the UK Channel ecosystem

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This presentation is a summary of the research that analyses how the channel has evolved over the last years in the UK. The results of the research have been presented at the official launch of the new website Channelbiz.co.uk in London on 15 March 2012. The complete research is avalable here: http://www.slideshare.net/NetMediaEuropeUK/the-evolution-of-the-uk-channel

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The Evolution of the UK Channel ecosystem

  1. 1. CHANNELBIZ LAUNCH THURSDAY, 15 MARCH, 2012 1
  2. 2. Who am I?Why ChannelBiz?There’s still money in the channelBut the channel has changedThere are big challenges for the channelThe vendors are moving everything to the cloud Editor in chief -Vendors need to pump more money into the channel ChannelBiz.co.ukBut companies have to get smaller, because small is beautifulSmart technology means more points, and points mean prizesDistribution, and lorries are far from deadVendors need distributors more than everEtailers are not smart enoughChannel Biz UK will focus on smart money, and smart startsOur research shows that there are both opportunities and threatsThierry Hamelin will now present our qualitative and quantitative results 2
  3. 3. EVOLUTION OF THE UK CHANNEL ECOSYSTEM - A NETMEDIAEUROPE RESEARCH STUDY - 3
  4. 4. 1. OVERVIEW2. END-USERS SURVEY : ANALYSIS AND STATISTICS3. CHANNEL SURVEY : ANALYSIS AND STATISTICS4. CONCLUSION 4
  5. 5. WHY THIS RESEARCH?1/ Find out how the market trends impact on the channel ecosystem  How vendors shortlisting is influenced by social media ?  Are new channel competitors (MSPs, hosters) dangerous for legacy players?  What are the incoming evolutions of IT procurement (direct vs. indirect, E-Markets)?  How does the increasing adoption of cloud computing impact on the channel?2/ Identify the stakes for the channel  What are the key challenges regarding the economic perspective and the rise of Cloud computing?  What does the channel think about cloud computing?  What does the channel expect from vendors and distributors to support the move to a cloud service provider model? 5
  6. 6. OVERVIEWPopulations surveyed: two distribution levels  End-users  2nd tier channel players Coverage Channel 2nd tier End-users Country UK UK Number of interviews 80 100 Contacts CEO, MD, GM, Business DM CIO, CTO, IT DM VARs, Pure resellers, Company profiles Managed service providers, All sectors System integrators, Hosters… Company size All All 6
  7. 7. SAMPLE STRUCTURE (CHANNEL) Job function Company size Main business model Other IT & (Etailers, Operations Retailers, Manager etc.) System 9% 9% >=50 integrator empl. 4% 9% Consultant 5% Pure reseller 32% Business CEO, MD, ManagedDM (Sales, GM serviceMarketing) 53% provider < 50 38% 19% empl. 91% VAR 32% 7
  8. 8. SAMPLE STRUCTURE (END-USERS) Job function Company size Business area IT Consultant CEO, MD, 7% GM 7%IT Business >=500 empl. < 50 IndustryDevelopper 22% 20% empl. 9% 91% IT Manager 43% IT Business 100-499 DM empl. Public sector Services 12% 12% 16% >=50 66% IT Director, 50-99 empl. CIO, CTO empl. 9% 22% 12% 8
  9. 9. 1. OVERVIEW2. END-USERS SURVEY : ANALYSIS AND STATISTICS3. CHANNEL SURVEY : ANALYSIS AND STATISTICS4. CONCLUSION 9
  10. 10. VENDORS SELECTION SOURCES How do you gather information to create your shortlist of vendors for IT product and solution purchases? Vendors’ websites 59% Events, seminars, shows 48% Feedback from peers 43% IT media 42% Direct networking with vendors 42% Direct networking with resellers 34% Reseller web sites / e-mailing 33% Consultancies 19% Social media 14% Other 7%The two main sources for shortlisting are vendors’ websites and the participation to events, seminars or shows.Feedback from peers and IT media are also widely used.Social media is not perceived as a direct source for building the vendors shortlist, at least not consciously. 10
  11. 11. IT PROCUREMENT THROUGH SOCIAL MEDIA What social media do you currently use for IT procurement ? IT blogs, boards and forums 47% IT community websites 46% LinkedIn 34% Webcasts 31% Twitter 19% Google+ 18% 82% of ITDMs use social media IT Social platforms 12% as a source of information for IT YouTube 12% technologies. Document sharing 10% Facebook 9% Other 3%If Social media is not perceived as a direct influencer when it comes to create a shortlist of vendors, it indirectly guidesdecision making.IT blogs or forums, as well as community websites are widely used as information sources.LinkedIn is well positioned with regards the use of social media tools, opposite to Facebook (which is only used by oneout of ten ITDMs). 11
  12. 12. IT PROCUREMENT THROUGH SOCIAL MEDIADo you think you will increasingly use social mediafor IT procurement within the next 3 years? Dont know 9% No Social media will be intensively used on a 21% mid-term basis. Among non social media users, half of ITDMs plan to use it within the next 3 years. Yes 71% 12
  13. 13. THE IT PRODUCTS PROCUREMENT CHANNEL How do you usually acquire your IT products? Reseller 68% 63% Directly from the vendor 54% 51% E-markets 35% 43% Retailer 27% 26% 7% Currently Hosting provider 11% In 3 years Other 6% 5%Resellers and direct channel will remain the main sources of IT products purchase.Nonetheless, alternative channels such as E-markets and hosting providers gain additional points. Online shoppingbecomes more popular among ITDMs, due to the raise of consumerisation. 13
  14. 14. SAAS ADOPTION RATES Do you currently use SaaS solutions? Who did you solicit first to enquire about SaaS solutions? No, but Other plan to use 8% it Peers 13% 8% Yes Hosting 39% provider Vendor 8% 38% Services company No 12% 48% Reseller, VAR 12% Consulting 15%Four out of ten organisations have already adopted SaaS . On a short-term basis, 50% will use it.The vendor is an integral part of the SaaS ecosystem as its marketing and branding are still direct influencers of thepurchase process. 14
  15. 15. 1. OVERVIEW2. END-USERS SURVEY : ANALYSIS AND STATISTICS3. CHANNEL SURVEY : ANALYSIS AND STATISTICS4. CONCLUSION 15
  16. 16. MID-TERM BUSINESS CHALLENGES What are the key challenges for your business within the next 3 years? Stay competitive 72% Develop new skills to enter new markets 42% Control costs 40% Increase sales force 32% Develop niche expertise 25% Develop E-commerce to better reach customers 23% Find new partner vendors 21% Finance development / investments 19% Switch from product to service led culture 12% Increase marketing budget 11% Provide consulting services 9% Switch to a recurring revenue service oriented model 7% Obtain more certifications 5% Provide training and certification degrees to customers 2% Other 5%Staying competitive and developing new skills are the main mid-term challenges for the channel players.Controlling costs comes just behind, as it rhymes with business efficiency.Switching to a Cloud related recurring revenue model seems to be underestimated (only 7% consider it as a challenge). 16
  17. 17. PERCEPTION OF THE CLOUD COMPUTINGHow do you perceive cloud computing with regards your business? A threat 9% Both an opportunity Cloud computing is perceived in a positive and a threat manner. 11% A quarter of the channel is not currently impacted by the cloud. Most of them are An VARs and resellers. opportunity No impact 56% 25% 17
  18. 18. TOP CLOUD OPPORTUNITIES Why do you perceive the cloud as an opportunity? Source of recurring revenue 47% Source of additional revenue 34% Develops new channel partnerships 26% Lower setup costs 18% Only few resellers provide appropriate cloud services (yourself included) 16%Allows selling more expensive software than in a traditional licensing model 13% Higher margins 8% Geographical proximity to customers is no longer an advantage 5% Other 11% The main cloud opportunities are profit oriented. On the other hand, the cloud doesn’t mean higher margins. This is one of the channel “cons” regarding cloud solutions. New partnerships arise from the necessity to reselling cloud solutions within the channel in order to benefit from the specialists’ expertise. 18
  19. 19. … AND TOP CLOUD THREATS Why do you see the cloud as a threat? High infrastructure investment costs 45% New competitors arise such as managed service providers and application hosting providers 36% Metered billing difficult to set up for bundled cloud services 27% Vendors bypass the channel to sell unsophisticated solutions 18% Other 9%By enabling end-users to offload infrastructure and maintenance, the cloud passes it on to the channel ecosystem.At the same time, application hosting providers and MSPs are well placed because they have already adopted arecurring revenue oriented model and the cloud seems a natural evolution of their skills. 19
  20. 20. WHAT TO EXPECT FROM VENDORS AND DISTRIBUTORS WITH REGARDS THE CLOUD What do you expect from vendors and distributors to provide you for your business transition to a cloud service provider model? Training 61% 66% New accreditation/ partner programs 57% 61% Access to infrastructure 34% 34% From distributors Other 5% 11% From vendorsExpectations are rather similar from vendors and distributors.They are logically based on training but also new accreditation and partner programmes in order to better meet tocustomers’ needs.Access to infrastructure in order to propose their own cloud solutions (Iaas, PaaS and services) comes after. 20
  21. 21. CHANNEL PLAYERS IN THE CLOUD In your opinion, what channel players are more suitable for selling cloud services? Hosters / managed service providers 59% System integrators 35% Telecom carriers 33% Converged voice and comms solution 30% providers E-markets 28% Other 4%The most suitable partners for selling cloud services are the hosters and managed service providers. Their core businessis based on outsourcing and cloud technologies.They are followed by the system integrators for their competencies in building specific cloud applications and for theircloud infrastructure.As for E-markets, Amazon is a good example of cloud adoption. 21
  22. 22. 1. SUMMARY2. CHANNEL SURVEY : ANALYSIS AND STATISTICS3. END-USERS SURVEY : ANALYSIS AND STATISTICS4. CONCLUSION 22
  23. 23. END-USERS KEY INSIGHTSTwo out of three ITDMs plan to increasingly use social media for IT procurement within thenext 3 years  An opportunity for vendors to promote their solutions but don’t forget that social media is not limited to LinkedIn, Twitter or Google+ ! Almost 50% of ITDMs use IT blogs, forums and IT community web sitesE-commerce players will continue to rise on a mid-term basis. 43% of organisations willmake use of them (a gain of 8 points within the next 3 years)  How far can Amazon or Ebay go? Will they be able to provide to small software vendors the infrastructure to host and sell their software “as a service” ?Vendors are still an integral part of the SaaS ecosystem, as 38% of ITDMs solicit them firstto enquire about SaaS solutions 23
  24. 24. CHANNEL KEY INSIGHTSThe main challenge for the channel players is related to competitiveness (72%) throughnurturing new skills and entering new markets (42%)  Nonetheless they tend to underestimate the challenge of a cloud related recurring revenue model for their business (only 7% feel concerned about it).The cloud is mainly perceived as a business opportunity in terms of recurring and additionalrevenue source.  However, it is not synonym to higher margins - (only 8% relate it to higher margins)Channel players tend to always promote training and new partner programmes fromvendors and distributors to support their move to a cloud service provider business model. => Access to infrastructure (allowing the channel to customize cloud offerings instead of only reselling SaaS) is not a priority, but it could rapidly become a stronger expectation. 24
  25. 25. MID-TERM CHALLENGES FOR THE CHANNEL GLOBAL CHALLENGES SPECIFIC CHALLENGESSucceed in building relevant influencer For Manufacturersstrategies in correlation with the increased > Rationalization of IT spending via virtualizationrole of social media within IT procurement > Reorientation of the offer due to increasing demand from the untraditional channel (SaaS / IaaS providers) and decreasing demand from customersMove from traditional billing to a “pay as you For software vendorsgo” financial model (related to cloud Invest into a reliable and secure infrastructure (oncomputing) premise or in partnership) to provide their software “as a service”Acquire deeper expertise by creating a brand For Distributorsnew market strategy involving business Find new sources of revenue to counteract the rise ofdecision makers and not only ITDMs (due to dematerialization and the nebulous nature of businessthe rise of cloud computing based on services) For VARs and Resellers Many of them still lack cloud related skills. They have to hire cloud specialists and invest in certification. For Pure Resellers They are in real danger because of shrinking margins and lack of value added business 25
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