Can the Kiwi channel ride the second cloud wave?

Can the Kiwi channel ride the second cloud wave?

Heavyweight partners come together to debate the future of cloud in New Zealand

“Whether it be a DevOps or development focus, there’s real value in offering another dimension to the customer in the cloud. We can quickly get disrupted, in fact, it’s very easy. Therefore, we must remain relevant.”

Echoing Nees’ comments, Veeam director of cloud and service providers APJ Asanga Wanigatunga advised that for partners playing in the cloud market, a unique value proposition must be created.

“We all have to disrupt ourselves internally otherwise we will be disrupted,” Wanigatunga added. “We’re seeing value in being able to right size the model for customers, and that’s the channel play in New Zealand today.

“There’s an opportunity for the channel to be an integral part of that. Our top performing partners have a value proposition in this multi-cloud world. Partners must address specific use cases because customers will go elsewhere otherwise.”

New world, new competition?

As New Zealand settles on a hybrid cloud approach, established players housed within the market are now being challenged by the emergence of a new breed of partner, with a shadow channel forming across the country.

Outlined at EDGE 2017 - Reseller News’ annual destination channel conference - a broad and diverse group of companies from all backgrounds are surfacing on Kiwi shores, engaging, influencing, recommending and even reselling technology to customers.

Specifically, five new competitive partner threats have emerged, taking the form of SaaS ecosystem consultants, independent software vendors (ISVs), industry-based professional services firms, born-in-the-cloud providers and start-ups.

“A whole new suite of partners are emerging across the channel,” Emerging Technology Partners director Derek Leitch observed. “There’s a real danger that our lunch could be cut if we don’t react and stay relevant.

“And that’s the motivation behind our rebrand and reinvention as a business, away from the ViFX brand.”

During the past 12 months, Leitch has witnessed a “generational shift” in the global market, with its effects subsequently trickling down into the Kiwi channel.

“We live in a cloud era and we’re seeing start-ups and specialist cloud providers aggressively enter the market,” he added. “We’re seeing this playing out today and it’s forcing partners to rethink and readjust strategies.”

As new technologies flood the market, new customers are gaining purchasing powers, procuring solutions in new ways through new types of partners.

It’s a recalibration of the channel, instigated by end-users from the bottom up, racing back up the supply chain to shake the industry to its core.

“We’re seeing change come from both ends, whether it be start-ups or large consultancy firms,” Wotten added. “Take Accenture as an example, they are playing at the top end of the market and writing digital strategies, now they are executing on that strategy.

Grant Olliff (OSS) and Darryl Grauman (Westcon-Comstor)
Grant Olliff (OSS) and Darryl Grauman (Westcon-Comstor)

“As a result, they’re moving down into the channel and are attacking our market share, taking customer by customer.

“Every time we enter into a customer engagement, we are being attacked by start-ups, consultancy firms and born-in-the-cloud players and as a tier-1 provider, we must ask how we reinvent ourselves to remain relevant.”

Perhaps one could argue that the market has forever been in a state of flux, yet in 2017, there’s never been so many balls up in the air.

Never has the channel had to contend with so many moving parts simultaneously, as cloud redefines the role of buyers, providers, distributors and manufacturers of technology.

Change does not translate to carnage for traditional resellers however, with the channel cliff edge still a safe distance away.

“Today there’s over 20 different suppliers serving a customer and nobody is taking responsibility,” Open Systems Specialists general manager of digital services Grant Olliff added. “But 20 years ago, the system integrator took responsibility.

“We’re seeing development teams moving to cloud, building a solution and spending a lot of money, and then the next room the same, the same thing is happening.”

Because despite the rise of new players in the market, the channel still has a crucial role to play, ensuring that maturity is injected back into the system.

“We’re in the wave of insourcing and customers knowing what they are doing again,” Enterprise IT CEO Stuart Speers added. “The things we undid years ago around multiple disparate systems that don’t talk to each other, are coming back again.

“Whatever they are, those seven or eight applications still need to talk to each other.”

According to Speers, partners that see a gap in the market and capitalise through the creation of a new offering, remain challenged to keep pace with titans of the industry such as AWS.

“You skill up but when you go to the customer, you find that AWS has released a new free tool that does most of what you’ve done,” he said. “Vendors don’t communicate this with key partners which is part of this secret squirrel approach, but it remains a challenge for the channel.

“Start-ups are flooding the market and standing up new technologies and shiny new solutions, but operationally, they are lacking which is a huge pain point for partners in the cloud.”

Change ahead for vendors

Back up the supply chain, vendors are also on the hunt for new partners and capabilities, as cloud adds extra layers of technological complexity to customer deals.

Shane Harris (Sandfield Associates) and Asanga Wanigatunga (Veeam)
Shane Harris (Sandfield Associates) and Asanga Wanigatunga (Veeam)

“Businesses are continually changing and cloud brings a risk for traditional technologies,” Thomson added. “A customer might have had data onsite and then moved it to the cloud, but that doesn’t mean they have the same protection as before.

“As a result, we’re looking for partners capable of operating in those circles and articulating the value of deploying an effective disaster recovery solution as-a-service.”

Likewise, Wanigatunga acknowledged that the Veeam ecosystem is also continually evolving, reflecting a hybrid market now dominated by data.

“We’re seeing the profile of our partners change,” Wanigatunga observed. “Data is the new currency and we’re finding our channel is different because of this.

“We used to predominantly sell to infrastructure partners but we’re now working with partners capable of solving different business problems for customers.”

Specific to Hewlett Packard Enterprise, Edwards said the tech giant is actively chasing ISVs and new technology providers across New Zealand, as the vendor shifts towards specialised market offerings.

“We’re no longer an organisation that is all things to all people,” he said. “Through our M&A activity we’re very much becoming more specialised and focused in terms of how we go to market.”

Yet despite clear industry acknowledgment that customers, partners and technologies are changing, the channel remains grounded by archaic vendor programs that seldom reflect market realities.

“Vendors have a traditional way of rewarding and encouraging partners in the channel,” Edwards explained. “But start-ups and these new types of partners have a completely different view of the world - do they even want to be rewarded?

“We have a whole group of new organisations that want to work with us as a vendor but they equally want to retain their independence and be agnostic in terms of recommending technology. Therefore, they don’t want any type of rewards structure.”

Such a stance creates challenges around ensuring partners are adequately trained and enabled on specific vendor technologies, with traditional methods of enablement struggling to resonate among new partners.

“But this is crucial for start-ups,” Speers added. “The sales people are usually the owners and they usually get into a mess when they hire extra sales staff.

“That is when they realise how important vendor programs are in terms of motivating internal staff.”

According to Wotten, vendor programs reflect the current state of the Kiwi market on a “case by case basis”, with different technologies and engagements meriting different types of reward structures.

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Tags storagecraftveeamHewlett Packard EnterpriseWestcon-Comstor



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