2012…the year that BYOD and big data moved onto centre stage, virtualisation and IaaS (and all the other cloud/datacentre-based ‘XaaS’ acronyms) firmly established themselves as mainstream, the UFB rollout began to build momentum and, as usual, distributors and vendors rearranged their relationships to tap into new and existing opportunities. But business as usual sees both good and bad. UFB infrastructure provider Huawei came under a cloud of suspicion due to their ties with the Chinese government, Maclean Computing abruptly filed for liquidation in July and Renaissance, a major player for years, dropped out of the scene. Yet in spite of a sluggish economy, both internationally and domestically, the IT industry not only held its own but recorded significant growth...according to October’s Technology Investment Network’s TIN100 report, “companies in the ICT sector grew their revenue by 9 percent, as opposed to manufacturing which grew at a near flat .1 percent.”
“The IT services companies are the growth story this year,” said Greg Shanahan, publisher of the report. “They had revenue growth of 11 percent year over year, which is about $95 million in revenue. The largest part of that growth was selling into the Australian market, so increasingly the IT services sector is becoming Australasian.” Indeed, with hardware sales no longer the profit generator, value-added resellers, systems integrators and developers are becoming an increasingly large percentage of the industry.
IDC concurs. The year-on-year growth of the IT services market grew by 4.4 percent in the first six months of 2012, they say. It was the biggest growth patch for the country since the first half of 2008. According to the company's IT Services Tracker, the local IT services market grew to $1.7 billion. Outsourcing remained the largest segment in terms of revenues across IT services, growing by 5.1 percent with hosted services and outsourced datacentre services going strong.
Cloud brokers and datacentre growth
As professional services expanded and on-premises hardware profit margins, for the most part, remained static, the ‘cloud’ and datacentre market heated up. Indeed, Microsoft’s Chris Ichter predicted in January that resellers would be looking to position themselves as cloud aggregators. “The value of the reseller,” he said, “is understanding the cloud business and maintaining the skills to build infrastructure to link them together.” This prediction is becoming reality.
Gartner predicted that global “cloud computing would grow by 19% becoming a US$109 billion industry.” Here in New Zealand, we saw Revera becoming data management and storage provider CommVault’s first 'petabyte class' customer in New Zealand, managing 1PB of data on CommVault’s Simpana platform. Under its current licence agreement, Revera can manage up to 2PB of CommVault data. They, and other datacentre providers, will need all of that capacity and more as government agencies tap into the cloud. Revera, and more than 20 partners, established the ‘Stack Alliance’ earlier in the year to offer ‘ICT stack choice and flexibility to public sector buyers of government infrastructure as a service’. Yet a MYOB survey, released in September, suggested that only 14 percent of 1000 companies surveyed in New Zealand are using the cloud to conduct business. Clearly, there is plenty of scope for growth.
One area where resellers can add value to cloud-based initiatives is with licensing. Doug Tutus of distributor Newlease said that “license optimisation is a value-add to our customers.” They ran a series of workshops with the hope of adding 100 more resellers to their base of 150 current partners. They are looking at hosted desktops as a huge growth area. Citrix, one of Newlease’s agencies, reported that one Australia partner, ITEasy, has seen 400 percent growth in its desktop as a service provision in the last six months.
Vendors are especially interested in facilitating licensing with Microsoft playing a prominent role. “Windows Server 2012 is the world's first genuine Cloud OS, which has been built from the cloud up to provide one consistent platform across private, hosted and public cloud environments,” said Microsoft’s Bradley Borrows, at this year’s TechEd. In addition, application delivery networking vendor F5 launched a IaaS cloud licensing programme and security vendor WatchGuard, distributed by Exeed, launched a security suite for virtualised environments that is optimised to work with VMware partners.
Spreading the word
With all of this potential, vendors and distributors are eager to increase their engagements with resellers and, regardless whether their solutions are virtual or real, on site or in the cloud, the preferred strategy is the partner programme. An impressive number of vendors announced their new initiatives on the pages of Reseller News in 2012. Juniper’s renamed ‘Partner Advantage’ programme focuses on new training, certifications and rebates while Jabra’s ‘PartnerNet’ provides online training for their more than 300 partners through their ‘Ecademy’ as well as a revamped lead generation process. Fuji Xerox announced a new training initiative, Streamline, built around two-day sessions, to help confront commoditisation creep by highlighting areas where resellers can add value to print solutions. In addition, Fuji Xerox has tapped into social media for further engagements via a blog and LinkedIn.
Trend Micro has updated their Affinity Partner Programme to focus specifically on the cloud by offering incentives to new customer acquisition and greater rebates for busiess growth as well as access to more market development funding. Brocade launched a deal registration initiative to help resellers tap into the growing campus LAN market and sweetened the deal with additional discounts and enhanced training options. Cisco, looking to rebound from a challenging year in 2011, upgraded their Partner Plus programme with more training, including a Master Cloud Builder Partner competency and EASE (Enabling Architecture Sales Excellence) specialist for sales people.
And power protection vendor Eaton launched their PowerAdvantage Rewards programme mid-year to incentivise sales. This programme, based on four levels of participation so that resellers of all sizes can benefit, has been designed to ‘drive mutual success through dedication to partnership and customer service.’ That statement sums up the advantages and benefits of partner programmes for all concerned.
Distributors and vendors are always repositioning themselves to take advantage of market dynamics and opportunities. As a result, the solution mix from distributors changes on a regular basis. Express Data has been particularly busy. ED signed with managed services solutions vendor Delta Technology to allow resellers to white label Delta’s solutions, finalised an agreement to distribute and support enterprise mobility vendor Good Technology’s solutions and inked a deal with enterprise communications vendor Aastra to distribute its range of IP phone models specifically for Microsoft Lync 2010 software. Plus they added the ShoreTel unified communications portfolio to help resellers tap into the burgeoning voice/data convergence market.
Allied Telesis and Sektor signed a distribution deal to extend the company's reach into new vertical markets, including POS and CCTV. On the other hand, workflow solution provider Intermec announced that it was ending their three-year relationship with Sektor. Soft Solutions was also active with their diversified stable of vendors. They added Kroll Ontrack's data recovery and information management services to the local market and closed a deal to distribute newcomer Xengati’s solutions to give resellers further options to provide onsite and hosted managed services and accelerating deployment of VDI environments.
Ingram Micro, appointed a Value Added Distributor for Microsoft early in the year (along with Express Data), signed on more than a dozen Apple accessory vendors since the end of 2011, bringing its Apple-centric third-party portfolio to over 50. Plus they signed on Silver Peak Systems for their datacentre class wide area network (WAN) optimisation products as well as network management solutions provider Arbor Networks to offer enterprise customers the vendor’s Pravail Availability Protection System (APS).
Laser Corporation appointed Synnex to distribute its entire product portfolio in New Zealand, in addition to Ingram Micro which was already distributing the vendor's products here.
Westcon, which changed it’s name from Datastor this year, strengthened its relationship with infrastructure and IT architecture solution vendor F5 Networks to offer programmes for traditional partners, managed service providers (MSPs) and global cloud providers. Distie Observatory Crest signed an agreement with HP to distribute the vendor's Enteprise Security Products in Australia and New Zealand and filled out its BYOD portfolio here with BlueCat Networks products and WLAN solutions provider Aerohive. Distribution Central and NetApp signed a partnership agreement that will see the distributor delivering NetApp's storage and data management solutions to the New Zealand channel. Unified communications hardware vendor Jabra has appointed Distribution Central as its third distributor in New Zealand as it turns up the heat on the contact centre side of the business.
With the maturing of the ITC market, many organisations are looking to work smarter to reduce costs and boost productivity without compromising security. As a result, we saw a lot of emphasis on mobile management (to address BYOD), business intelligence, spatial analysis and other enterprise applications. Jade Software’s Wynyard Group hit the big time with a ‘Visionary’ placement in Gartner’s prestigious Magic Quadrant for their risk management solutions. On top of that, they inked a deal with NZ Police for their digital forensics technology. And Jade itself has signed up with Gen-i’s ReadyCloud Server infrastructure-as-a-service environment to host their Joob mobile banking solution. Plus Wynyard has been named a top vendor in the seventh annual RiskTech100 rankings compiled by Chartis Research, a global risk technology markets research and analysis company.
What goes up….
But it wasn’t all sweetness and light in 2012. Maclean Computing off-loaded their smaller customers to Belton IT early in the year. But by July they were in liquidation. Suppliers, vendors, partners, some staff and other unsecured creditors were owed $953,000. Around 20, mostly unsecured, creditors were unlikely to recover any money. But in the six months since Belton IT acquired Maclean’s procurement customers, they gained a 75 percent increase in its managed service business.
And long-time distributor Renaissance, after persistent losses, sold their distribution business to Exeed, firmly placing them in the top tier of NZ distributors. Exeed has been doing quite well with security vendor Watchguard and new vendors Fusion-io, Belkin and Ruckus.
And for the Huawei issue? They dismissed a U.S. House of Representatives report questioning the company's ties to the Chinese government, with a Huawei official suggesting the report was politically motivated.
The only prediction that we can make with confidence is that, regardless of the state of play, the pages of Reseller News (and the emailed Channebeat) is where you’ll read about it first. We expect to see more mobile device management tools, more datacentres and cloud-based XaaS solutions, more staff moving around and many more enterprise sales. Hopefully there will be no redundancies or liquidations, no negative headlines and only positive results. UFB will have a huge impact, presumably, and more data means more storage opportunities and more opportunities for data management initiatives. It should be an exciting year.