With the move to cloud-based services continuing to gather pace across all businesses, David Nicol, Director of Workspace Product Sales, Citrix ANZ, explains how the channel can adapt and specialise in this new era of IT consumption.
With the rise of cloud-based services in New Zealand, and across the globe, there has been much speculation about what this means for the channel’s profit margins.
After all, businesses are spending less on large on-premises deployments in favour of smaller consumption based license agreements.
In this new world of IT consumption, how can channel partners ensure they are offering services which are enabling them to grow revenues, rather than see profits dwindle as habits change?
While it’s true that customers are no longer making large one-off investments, they are looking for partners to bring together, tailor and manage IT solutions, and this needs to be a key growth area for the channel in today’s market.
Cloud migrations are not exclusive to wanting to reduce costs. In many cases it’s because businesses, especially SMBs, are looking for a fully-managed IT service allowing them to focus on core business priorities growing the bottom line.
Under traditional models, the process of deploying and managing IT was much more complex. Users would have to purchase licensing, server hardware, storage and consulting services, as well as develop skills for managing projects internally.
Although partners played a crucial role in supplying and integrating these components - the buck stopped at the deployment stage - leaving the sector with an inconsistent stream of revenue.
Cloud models, however, have the potential to deliver a more reliable and stronger revenue flow, as updates are regularly made and licenses renewed.
Partners who focus on delivering complete managed services with a ‘pay-as-you-go’ model are also able to gain further exposure to their client’s on-going business, generating value-adding opportunities delivering long-term profit.
An example of this is providing a Workspace-as-a-Service (WaaS) platform, whereby organisations subscribe to virtual and mobile applications, which deliver seamless and secure access to corporate data on any device and location, on a month-to-month basis.
This provides resellers with a larger share of the customer’s spend, and increases the margin opportunity by developing specialist skills that a company may not have previously held.
In the context of WaaS, if a customer’s underlying initiative is to have a mobile workspace partners must consider what value they’re adding beyond reselling cloud based solutions.
This is because in today’s environment the channel’s technology solution is only a portion of what companies expect from them.
Simultaneously, the channel has seen the commoditisation of the supply and resell of hardware and software, meaning it needs to look for more innovative ways to stay competitive.
Specialising in a specific technology category, such as virtualisation or security, is one way to achieve this, and is one of the drivers behind the launch of Citrix’s Specialist partner program earlier this year.
Becoming industry-recognised specialists allows partners to better differentiate their capabilities and offerings to ensure customers are confident of optimising their investment in subscribed technologies.
For example, by developing a deep understanding of trends and emerging technologies, the channel is empowered to deliver effective solutions enabling customers to achieve their range of business objectives.
This leads to increased trust and recognition among customers and the wider industry, allowing partners to grow their customer base. It also upskills in specific areas, ensuring customers receive the absolute best service.
The way businesses consume IT has changed, and channel partners that fail to adapt to this new world will see revenues fall. Yet, for those willing to make changes there’s significant opportunities to not only maintain profit, but achieve growth.
Channel partners shouldn’t fear this new world, it should be embraced.
We’re looking forward to seeing channel players become even more specialist than they already are, which is great for them and their customers.
By David Nicol - Director of Workspace Product Sales, Citrix A/NZ