Getting to the bottom of an industry built on buzzwords is a difficult task for partners, with market hype continually skewing customer appetite.
Magic quadrants might score highly for vendors — contributing to a deluge of pointless press releases and baseless reports — but for the channel, cutting through the noise requires a deep understanding of what makes the modern-day customer tick.
Because the industry can evangelise about Airbnb and Uber until the end of time — advocating the value of disruption, innovation and bla bla bla — but until money is laid on the table, such claims are rendered redundant.
Through EDGE Research, a clearer picture is emerging however, as customers and partners reveal key technology investment priorities for both today, and tomorrow.
Broadly speaking, findings show that partners are aligned to customers in terms of building relevant capabilities around specific technologies, yet a few startling differences remain.
When examining the investment priorities of customers across Australia and New Zealand (A/NZ), EDGE Research unveiled cloud migration as the leading priority for end-users in 2017.
Perhaps unsurprisingly, moving to the skies is followed by the need to ensure robust protection measures are in place, highlighting the importance of security within the context of cloud.
Dropping down the list of present customer priorities, end-user computing, customer experience and data centre migration/expansion ranked third, fourth and fifth respectively, followed by big data and analytics.
Overall, partner responses signalled a channel in-tune with customer priorities, with a realisation that cloud and security offer key money-making opportunities within the current technology landscape.
Common ground and shared goals aside however, local organisations ranked managed services as a low priority in the immediate term, despite partners citing this as a leading focus for the next 12 months. On paper, the result appears startling, although a plausible explanation can be found.
“This was an interesting one as we received a lot of feedback from this during EDGE 2017,” Tech Research Asia executive consultant Mark Iles observed. “It is arguably a question of nomenclature, where partners see ‘managed services’ customers see 'whatever solution it is I want delivered as-a-service’.
“In many cases, this isn’t the traditional managed services (desktop, print etc) but could be custom applications or application outsourcing etc.
“This represents a mind shift around focussing on the customer needs and then finding ways to deliver it profitably ‘as-a-service’.”
With the move to managed services and recurring revenue dominating the channel agenda during the past 12-24 months, it’s clear customers are demanding as- a-service offerings from providers, yet confusion remains as to specific naming rights.
After all, do customers call partners and ask to buy a managed service?
Collectively, the findings show predictable areas of alignment around which technologies rank highest in terms of spending in 2017, but for partners, value can be found by moving up the technology stack.
“It’s the difference between where the customers’ strategic focus is compared to where partners are focussed,” Iles explained. “Customers are focused on digital transformation, customer experience and leveraging data and analytics to drive better business results, whereas partners are prioritising managed services, security and cloud.
“These are merely the enablers not the real focus. If you want to be relevant in the medium-long term you need to know what customers plan to do on top of these new platforms and better still, be suggesting ideas for them.”
Shifting the dial forward to the future technologies on the radar of trans-Tasman organisations, both customers and partners cite automation as the leading priority in the years ahead.
This shouldn’t be surprising as managing growth and taking cost out at the same time is now widely recognised as a key requirement for digital business.
Yet challenges continue to remain for IT infrastructure and operations leaders, creating a need for deeper levels of automation across organisations.
Overall, end-users and partners are matched in terms of prioritising digital transformation, artificial intelligence, machine learning and augmented and virtual reality.
But crucially, customers are acting, leaving partners behind.
“Again, we see a similar pattern and it’s understandable of course,” Iles said. “No partner can afford to invest in every technology and with the move to annuity revenues, cash flow is squeezed for many partners.
“Now is a pivotal time for partners — customers are moving rapidly and unfortunately that means partners need to move into these new solutions now.
“For many this means a delicate balancing act of cash flow vs. investment and we see many partners taking the opportunity to reinvest all available funds back into the business to stake a claim and forego dividend and profit sharing for the time being.”
With the onus on partners to pivot focus and capitalise on emerging technologies, EDGE Research uncovered an alarmingly disconnection, in the form of the Internet of Things (IoT).
Ranked bottom of a lengthy list of future priorities by customers, the razzmatazz associated with IoT appears to be waning as local organisations sidestep the hype in favour of other emerging technologies.
Such findings stand to create concern for the channel, with partners ranking IoT as the third most important technology of the future, differing widely from the view of customers across the country.
From a global perspective, partners appear well-placed, as IoT spend continues to rise as businesses build out viable go-to- market strategies, with services set to be a big revenue driver during the next 12 months.