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Canalys Channels Forum: Impact of geopolitical forces underscored

Canalys Channels Forum: Impact of geopolitical forces underscored

Business models and program structures face the biggest changes

2014 has been a tumultuous year for the APAC region, according to analyst company, Canalys. The slowing Chinese economy, a coup in Thailand, protests disrupting Hong Kong and tensions between South East Asian countries have contributed to an unsettled business environment.

However, a decisive election victory in India has released a new wave of investment, Indonesia has renewed optimism with new leadership and the remarkably resilient Thai economy has rebounded far quicker than expected, the company said in statement.

‘Economic and political changes have only been part of the story though. Concerns about privacy and intellectual property rights have spurred legislation and government buying preferences to favour in-country-based suppliers,’ said Steve Brazier, president and CEO of Canalys.

"In larger countries, such as China, many global vendors have responded by separating their Chinese operations from the rest of their Asian teams to increase their ability to localise," he said. "We expect this to ripple through the two-tier distribution model as regional distributors assess how best to serve the needs of an increasingly divergent region."

Canalyst senior analyst, Alex Smith, said despite these challenges, the IT channel remains optimistic, with some 40 per cent of APAC partners expecting to grow in excess of 10 per cent this quarter.

"The spectrum of technologies and services available for them to sell and deliver has never been wider, and partners increasingly play an important role as advisors to their customers, to help navigate the range of choices. But with this comes the complexity of managing different revenue models. For many partners, moving from a predictable rebate model to a recurring revenue one will require major internal process change," he said.

While the journey to the Cloud represents an enormous opportunity, the question remains as to whether those investing in Cloud are approaching it in the most sustainable manner.

"CXOs who are responsible for governance, security and compliance will need to ensure their Cloud solutions are under their control at all times. Partners need to think differently about the Cloud models they offer for longer-term Cloud success," said Nick Earle, senior vice president, worldwide Cloud and managed services sales, Cisco.

EMC senior vice-president global systems engineering, Chad Sakac stressed companies must enable enterprise customers to redefine IT for the software-enabled world

‘We are placing big bets to innovate and drive disruptive technologies, such as flash, software-defined storage and datacentres, to ultimately build new apps and new data fabrics on well-run hybrid Clouds," he said.

"At HP, our mission is to build the foundation for the New Style of IT. The next generation of applications, web services and user experiences is only as rich, impactful and world-changing as the infrastructure platforms that powers it,’ said Bill Veghte, executive vice-president and general manager, enterprise group, HP.

"In the New Style of IT, the role of partners will be even more important to help customers optimise for today and build for tomorrow. We are committed to working closely with our partners to deliver innovations that will allow them to create impactful business outcomes for our shared customers."

Microsoft vice-president worldwide, Thomas Hansen, said the company's partners and channel ecosystem had always played a vital role.

"As we transform as a company, our partners are transforming with us, recognising the opportunity that living in a mobile-first and Cloud-first world presents. Our partners are working with customers of all sizes – whether on-premises, in the Cloud or in hybrid scenarios – to help them realise the full power of technology," he said.

Canalys Channel Forum APAC is being held in Shanghai.

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