Tech Distribution Changes in a Cloudy Industry

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Presentation at Distree XXL Conference in Monte Carlo, Feb 2011.
Contact me for further details,
poneill@forrester.com

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  • Source: Wipro Technologies (www.wipro.com)
  • Source: Ingram Micro: Seismic Managed Services (http://www.ingrammicro.com/ext/0,,23348_19722_23360,00.html).Source: Avnet (http://www.ats.avnet.com/services/index.asp).Source: Arrow Electronics: Arrow Fusion Cloud Services (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: Microsoft Clip Art
  • Source: Microsoft Clip Art
  • Tech Distribution Changes in a Cloudy Industry

    1. 1. Coming Upheaval in Technology Channels: How will New Revenue Streams be Shared<br />Peter O’Neill, Vice President & Principal Analyst<br />DistreeXXl, Monaco, February 10, 2011<br />
    2. 2. Agenda<br />
    3. 3. The business of IT is becoming empowered<br />Source: January 7, 2011 “BT 2020: IT’s Future In The Empowered Era” Forrester report.<br />
    4. 4. And three forces of change impact the business of IT <br />Source: January 7, 2011 “BT 2020: IT’s Future In The Empowered Era” Forrester report.<br />
    5. 5. Businesses expect to be more self-sufficient and empowered<br />Source: January 7, 2011 “BT 2020: IT’s Future In The Empowered Era” Forrester report.<br />
    6. 6. Agenda<br />
    7. 7. Recap: What is cloud computing?<br />Cloud computing is:<br />A standardized IT capability(services, software, or infrastructure)delivered via Internet technologiesin a pay-per-use, self-service way.<br />
    8. 8. What will move into the cloud – Long term duality<br />What will move into the cloud:<br /><ul><li>Standardized business logic
    9. 9. Horizontal business applications
    10. 10. Front-office applications
    11. 11. Simple, standardized infrastructure services (IaaS) like storage and compute power
    12. 12. Systems with fluctuating load</li></ul>What remains on premise for a long time:<br /><ul><li>Applications implementing customer’s intellectual property and competitive business logic will never go into SaaS, potentially onto IaaS and PaaS
    13. 13. Mission critical back-office applications
    14. 14. Many custom-built applications
    15. 15. The most mission critical back office processes
    16. 16. Applications with constant predictable load</li></ul>Level ofsharing<br />Public<br />Public transportation<br />Virtualprivate<br />Private<br />Private cars<br />Business value<br />
    17. 17. Agenda<br />
    18. 18. Channel resellers want to grow<br />Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey<br />
    19. 19. Channel resellers want to grow their business by adding new services<br /> Slightly, 34% in NA, 57% in EMEA<br />Significant, 49%, 16%<br />Double, 9%, 14%<br />1% in NA, 10% in EMEA<br />Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey<br />
    20. 20. Resellers product sales go down, services up<br />Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey<br />
    21. 21. Resellers are already providing managed services<br />Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey<br />
    22. 22. Resellers are planning for new managed services<br />Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey<br />
    23. 23. Those without managed services see these barriers<br />Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey<br />
    24. 24. So good resellers are changing their business models<br />Source: July 10, 2009,“The Changing Yin And Yang Of Tech Vendors And Channel Partners” Forrester report<br />
    25. 25. Forrester anticipates a “channel washout”<br />15%<br />MSPs/hosters can serve more customers<br /> + Increase in number of MSPs/hosters<br />+ No significant increase in number of customers<br /><br />Fewer channel partners<br />MSPs/hosters can serve more customers<br /> + Increase in number of MSPs/hosters<br />+ No significant increase in number of customers<br />MSPs/hosters can serve more customers<br /> + Increase in number of MSPs/hosters<br />MSPs/hosters can serve more customers<br />M&A<br />The best marketers<br />1.2m channel partners<br />
    26. 26. Agenda<br />
    27. 27. Distributors are changing their orientation<br />Historically, distributors provided added value for vendors<br />Inventory, financing, channel management<br />Sales & marketing<br />Often, a distributor specialized on just a few vendors (or just one)<br />In the future, distributors will be providing a service for resellers<br />Vendor aggregation<br />Sales enablement<br />Marketing platform<br />Hosting (physical or wholesale)<br />
    28. 28. Distributors will continue to help resellers<br />Problem<br />“Solutioneer” it<br /><ul><li>Financing
    29. 29. Vendor – loan/equity
    30. 30. 3rd party – Biz2Credit, On Deck Capital
    31. 31. Hook your reseller partners up with your MSP partners
    32. 32. Infrastructure investment is too high
    33. 33. Don’t understand the business model
    34. 34. Enablement/certification program</li></ul>Business model training<br />Marketing training<br />Channel enablement maturity curve<br />Sales training<br />Product training<br /><ul><li>Too difficult to find/staff the people with the requisite skills
    35. 35. Add a people finder to your online partner community
    36. 36. Embed a job search engine – CareerBuilder, Monster</li></li></ul><li>Good distributors will continue to adapt their business<br />
    37. 37. Examples of distributors providing MSP platforms<br />
    38. 38. Call to action<br />Distributors – Change or Die!<br />Tech industry is overrun with distributing entities.<br /><ul><li>Globalization, brand consolidation and cloud will prevail
    39. 39. To focus on physical product distribution, consolidate your portfolio and your vendors.
    40. 40. To expand your business and thrive in a cloudy market, turn your focus to the resellers’ needs.</li></li></ul><li>Call to action<br />Vendors – Understand The Changes!<br />Distributors will increase their influence over resellers.<br /><ul><li>Product vendors must include distribution partners as a new communications route to resellers.
    41. 41. Understand how to sustain your brand while outsourcing marketing, sales and business model training to distributors. </li></ul>Resellers – Pick Your Distributor Strategically!<br />Focus on your core competencies.<br /><ul><li>Leverage your distributor for supporting services across many business processes.</li></li></ul><li>Thank you<br />Peter O’Neill<br />+1 650. 581.3864  +49 69 959298 39<br />poneill@forrester.com<br />www.twitter.com/poneillforr<br />www.forrester.com<br />

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