For many years, ‘services’ has been touted as the best shield to compensate resellers for eroding hardware and software margins in the IT world. Managed services are considered to be almost de rigueur for most progressive resellers and cloud-based services are looming on the horizon. We asked a number of resellers and distributors for their views on the opportunities presented by services in 2013.
James Finglas, managing director, MJ Flood Technology
Cloud is sticking out hugely at the moment and more specifically a move towards mobility and how it is harnessed within a business. We’re seeing huge strides here.
We’re doing lot of work with O2 around that. Adoption of Office 365 is significantly up and there are a huge amount of services attached to it. We adopted cloud services very early and got ourselves into a very good position for supporting those services.
There’s been a huge expansion. Companies are comfortable to put mail into the cloud and move it into Opex. There’s been a lot of talk around Lync, but has there been a major adoption yet. Line of business applications are still remaining onsite or in the private cloud.
There’s a lot more adoption with mail and CRM. There are big roll outs taking place that are attracting large amount of services to plan, design and implement them. After that, it becomes like a traditional managed services arrangement.
Early on, the reseller community saw cloud very much as a threat, but it still needs a trusted adviser to provide local support and a managed service that customers will want. There’s a good a mix of services with cloud-based services as there would be in traditional managed services.
We’re seeing very large growth with a lot of it coming from our partnership with Telefonica/O2. We’re providing the sales expertise, consultancy expertise and support expertise. There’s a lot of opportunity in it, we’re growing services into them literally on a month by month basis.
And on the back of the Irish deal we’ve won the UK for Telefonica, so we’re embarking on a massive opportunity.
Karen O’Connor, general manager service delivery, Datapac
Managed print services continues to be an area of rapid growth. Customers adopting the managed print model are seeking solutions to maximise the potential return from print expenditure through the use of smart print technologies such as follow me print, pull print and secure printing options. These facilities enable customers to have better control over their print environment and monitor costs more closely.
Our relationships with hardware and solution providers in the print area, extensive knowledge of both print and non-print technologies and investment in a dedicated print research and development facility is enabling us to maximise on this opportunity.
We are also seeing increased growth in demand for managed security services, particularly in the Irish SME market. This is being driven by a number of factors including the lack of adequate skills or resources within organisations to deal with the increasingly complex data security landscape. Our team is continuously up-skilling and training to ensure they have the highest levels of accreditations and are up to date on all the latest technologies and IT security threats to meet this demand.
Traditionally, disaster recovery services have been cost prohibitive for SMEs due to the requirement for SAN to SAN replication and the associated complexity and expense. We expect to see significant growth in demand for disaster recovery solutions from the SME market facilitated by the availability of host based replication engines as an alternative to SAN to SAN replications. Host-based replication engines are cost effective solutions that allow on-site and cloud-based disaster recovery, eliminating some of the complexity and making disaster recovery services more accessible to the SME market.
Emerging trends inside and outside the workplace are also influencing the type of managed services in demand. We have launched upgraded offerings that allow Irish organisations to take advantage of new technology patterns such as bring your own device (BYOD). Through proactive and effective managed services, the barriers to BYOD adoption are overcome as concerns over loss of control are removed.
Our investment in a dedicated team to develop our managed service solutions in line with next generation technology developments and new and emerging organisational challenges ensures we are always in a position to meet the evolving needs of our customers in the managed services arena.
Michael Conway, director, Renaissance
Growth in the IT sector in Ireland is typically being driven by the demand to deliver new services and replace a lot of ageing technologies and solutions which have been deployed but have not had the investment needed to keep them current and relevant.
The challenges for channel partners in 2013 are to find suitable solutions to deliver to meet customer requirements and demands while ensuring they can do this in a profitable and sustainable manner and preserve their position within the IT channel. They have to find technologies they can deliver profitably and on which they can deliver suitable and profitable managed services.
New technologies often offer significant performance and cost savings and this is truer than ever in the security space. We are seeing the delivery of security technology solutions that are replacing many current costs and delivering significantly enhanced security and performance.
Renaissance has worked with channel partners to deliver technologies that meet their requirements and those of their customers. The UTM (unified threat management) sector is one of the best examples of this. Virtually every organisation has one or more of a firewall, e-mail filtering/anti-spam, Web filtering, a router, intrusion prevention, load balancing and VPN.
It is fascinating to look at the proliferation of ‘boxes’ and ‘stuff’ which a typical Irish SMB has. Most of this ‘stuff’ was purchased over time and without a plan, it has rarely been touched or updated since installations, firewalls are often very old and web filtering is poor.
Worse still, the resources to manage this stuff is not really there and the skills for the firewall are long gone – often with the password!
The costs for all of these solutions when added up is significant, which means customers are paying a lot and getting a lot less than they think and an awful lot less than they need.
UTM technology has enabled our partners to deliver solutions to customers and provide managed security services alongside them that offer cost reductions and significant security improvements while generating services revenues for partners.
This is the key area of development we have seen within the Renaissance reseller base.
Jim Leyden, managing director, Bizquip
By 2020, digital information will have grown by a factor of 30. This is precipitating a move from managed print services (MPS) to managed document services (MDS) which is definitely the big new development creating opportunities for providers like Bizquip in 2013. Managed document services are about ensuring employees get access to the right information, at the right time, in the right form.
The proliferation of information and data from numerous sources, internal and external, is forcing relevant managers to have to filter, make it relevant, file and store, embrace the cloud and consider outsourcing. It goes without saying that security plays a major part in this as businesses need to ensure their documents are stored in robust infrastructure and subject to best disaster recovery practices.
Many in the channel are not well prepared for the move to MDS. Bizquip has worked very closely with Ricoh in training our team and building the critical methodology to become a local leader. In fact, we are currently recruiting a managed document consultant to help with developing this business.
We have become experts in the MDS methodology, which ensures we deliver sustainable business improvement across customer organisations. Our five-step model is executed using our proven project management and service management methodologies, resulting in long-term sustainable advantages.
John Conlon, enterprise solutions sales manager, Sharptext
There are three service offerings from Cisco that are likely to bring good rewards for resellers. The first two are Meraki, a networking infrastructure as a service, and sipsynergy, Cisco’s managed unified communications as a service offering. The third is UCi2i, business class conferencing services for video.
There is a huge amount of interest in the services. There’s a lot of buzz. They offer decent margins and recurring revenue, they’re easy to use and don’t require a large amount of certification. And there’s a high level of margin right through the lifecycle of the products. While a number of traditional cloud offerings have resulted in a race to the bottom, these are actual business services that are required.
The services are nice and simple and straightforward for resellers and there are good linkages between the three. Cisco is helping to drive these sorts of services much lower down into the company size stack and open them up to a much broader level of partners. They are simple to introduce to customers and resellers don’t need to skill up. Partners can also white label the services and sell them as their own.
We’re running a formal launch event for the services on 11 June. There will be a lot of interest in these services from the biggest partners to the smallest. There are no great barriers to sale, it’s not like there’s a vast amount of certification required. And it’s still backed by a huge brand like Cisco. This is real, it’s here and it’s now, so let’s start selling.
Paul Kelly, country manager, Computerlinks
The managed services market is growing rapidly. A recent study from Insight Research pegged growth at double-digit rates over the next four years. Though on-premise solutions are still popular, they may not be the best option for all customers, so offering a choice will highlight the benefits of moving to a service-based model. Offering managed services is great for resellers as they often come with a higher profit margin and provide regular revenue streams.
Cloud infrastructure services present a great opportunity for channel partners as they offer customers the flexibility to add or reduce computing power when they need it and can also form part of a leaner IT strategy. Accreditations are becoming increasingly recognised in this area, so resellers should be looking at working with service providers that have received certification for using best practices to develop opportunities.
Another key area for channel partners is the security market where they have the opportunity to provide managed services and professional services. Because the current security landscape is difficult to keep up with, businesses can benefit from handing over security responsibilities to experts that keep up to date with the latest threats.
Finally, resellers are ideally placed to provide consulting, implementation and training services to organisations that are harnessing the potential of the mobile enterprise. From Wi-Fi and network installations to developing enterprise applications for use on smartphones, the channel can provide best practice, advice and support as businesses take their applications to users wherever they work and on whatever device they choose to use.
Andrew Miller, head of sales and marketing, Unity Technology Solutions
The channel is in a transitional phase, no different to what customers are. No company is fully cloud and no company is fully on-premise. It’s a dual world and we have to support on-premise and deliver into the cloud.
The challenge for the customer and service provider is how much, at what time and what the right level of speed is to make sure business as usual continues. For example, Office 365 is a good strong market opportunity. We have 25,000 seats. But creation [of accounts] isn’t the hard part, getting the user information from the current environment and putting it into the cloud, that’s where the skills lie.
Microsoft and all vendors make the cloud sound fantastically easy. That’s not the reality. You need to be able to do lots of other clever things to make the transition easy for the user.
Value added resellers provide the secret sauce to take vendor dreams and make them reality. It’s about being able to attach a vendor solution with another and bring an overall market offering/solution to the customer that is potentially vendor agnostic and having the experience and technical ability to deliver the solution.
Also, can you reskill your workforce to deliver the future technologies? How do you provide the customer’s vision of the future? You can’t just sack the workforce and start all over again. You need to ask what you need to do in training and support. It’s impossible to have the right technical people at every point in time.
We have just under 130 staff and over 90 are technical (in support and delivery) to support the breadth of services we provide and the supporting function required to support it. It’s no surprise we have so many given the broad nature of what customers look for and the complexity of each of those. We’re no different to any organisation, you either choose to niche or be broad and have the scale to allow you to deliver.
Justin Owens, managing director, Commtech
We don’t do a lot of services as a company but we tend to help to enable other people. We organise certifications/training that allow resellers to deliver their own services. We also farm our skills out to help partners do a joint install to help get them up to speed. We teach them how to fish.
There are a lot of changes happening that are being driven by the cloud. A lot of our customers are traditional resellers selling kit and providing services around that. A lot of them are focused on product sales and a lot of their largest vendors are focused on products still. But it’s changing.
We’re starting to see Systems Integrators becoming resellers of cloud services and resellers acting as service providers for cloud services. There’s a big change in channel. All resellers have to adapt, as less kit is sold, they need to get more service focused and look at different ways to accommodate the consumption based model to mitigate their loss from product sales.
A lot of smaller resellers aren’t in a position to provide services themselves so they need to partner with larger service providers. I think you will see telcos become a lot more prevalent and important and become much much stronger in that space. They don’t have mid-market relationships in the IT side, so you will see a lot of resellers partner up with them to deliver cloud services.
We’re seeing the evolution of the reseller business model. It’s not a choice, it’s about survival. The penetration of public clouds and private clouds is only increasing and over the next five years it will have replaced most traditional on-premise
A lot of traditional smaller SMB customers will go to the cloud for sure. A lot of traditional services will disappear, so it’s important resellers partner with vendors or providers that have a long term strategy in the cloud arena.
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