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Alexandre Mesguich

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Alexandre Mesguich runs the Enterprise Research division at Context, covering channel management services for the Storage, Servers, Networking, Security Hardware and Software industries.
By | Alexandre Mesguich 4th November 2014 11:12

The channel is changing – but if you're prepared, there's no need to fear

Better analytics needed in the survival stakes. No, REALLY

What keeps channel professionals awake at night? From resellers to distributors to vendors, they are all concerned about when “traditional IT” will finally shuffle off this mortal coil.

The channel is a delicate ecosystem of various vested interests — alliances, partnerships and deals – where each individual player is trying to increase their profits and add that elusive “value”.

But as the environment itself becomes more and more complex, and the picture becomes more blurred, this is when effective supply chain analytics really come into their own.

A brave new world

There’s no doubt that traditional forms of IT are already changing. Take storage and networking, for example. End user organisations are used to paying huge sums for hardware-based proprietary kit. But while the demand is still there – fuelled by exponential growth in data and those various oft-quoted trends of big data, social, mobile and cloud – CIOs are no longer keen to spend so recklessly on monolithic hardware.

The likes of EMC, Cisco and others know that their traditional sources of revenue are drying up as disruptive players such as HP point to a new way of doing things: a software-defined way. In this context, hardware becomes commoditised as the competitive differentiator shifts to the management software layer sitting on top. Suddenly, it’s not all about proprietary hardware any more, it’s about more efficient converged systems and standards-based, software-controlled hardware.

If you live and breathe the channel, this might seem like a rather terrifying prospect.

Asking the hard questions

Traditional storage in its current form is doomed, so how do you make those margins? You try and find ways to partner and package hardware with software and services to create something that resonates with IT buyers.

But how do you even know the right questions to ask? The whole environment is becoming more complex. No longer can you buy a box and add that percentage margin on top.

You need to know if you’re working with the right distributors, resellers and vendors. Are they producing innovative products? Are they offering well-thought-out and innovative packages of services to wrap around those products?

This is when the right analytics tools can play an important part. They should help you get smarter about analysing your performance, and understanding your competition – how they approach the market etc. With this kind of insight you should be able to determine if you’re heading in the right direction, and how long it might take to get there.

They need to be based on the right kind of data of course, and relevant metrics. Then, with big data-based analytics, you can take those decisions with confidence to transform your business and make it future ready for the next 5-10 years.

Internet of Things

Another case in point: the Internet of Things. This has been heavily pushed by Cisco for obvious reasons as the firm owns the pipes down which data to these billions of smart devices will flow. There are so many elements to the IoT: the device itself, the network, storage, big data analytics, management tools, software and services built on top of that data generated. The breadth and complexity of the potential supply chain here is mind boggling when you compare it to, say, the x86 server market of five years ago.

How will traditional channel players cope with the myriad of new partners? Niche resellers will specialise in the sale of smart washing machines that tell you when you’re running out of powder, or smart fridges that order milk from your local supermarket when they see you’re out.

There will be some old familiar faces (IBM), but a whole plethora of new potential partners to get to know if you’re playing in this space. It’s a brave new world but it’s by no means here yet, and its long-term future is by no means assured. Remember those who predicted the death of the desktop a few years ago?

So whether it’s adapting your channel business to cope with a more complex, uncertain IT industry, or finding ways to capitalise on residual demand for traditional technologies, it starts and ends with analytics. ®

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