Techaisle Blog

Every year or two (or three), a new trend sweeps the IT industry, and breathless coverage asserts that the new phenomenon has arrived fully-shaped to transform technology and/or IT’s role in business strategy. This is, of course, very rarely true. Most trends play out over a long time, and change in technology tends to be incremental rather than revolutionary. For example – it is certainly true that digitalization (and digital transformation) are important issues today, and that they will have a transformative effect on IT and business strategy. But Techaisle research demonstrates, they are a recent highlight in a series of business issues and technology themes that stretch back at least 15 years, from 2003 to 2019.

Key SMB and Midmarket digitalization themes, 2003-2020

As we enter the next decade, it seems that online capabilities and activities are entering a new era. There are still advances to be made in the ‘net’ realm: there is constant pressure to expand the speed of the Internet, enabling it to handle the voracious demands of unstructured content like video, and the rise of IoT and 5G portends a coming tsunami of data from billions of connected devices. However, the key focus of web-based business investment is now less about the ‘net’ and more about the ‘work’: the ways that an increasingly-connected world supports pursuit of previously-unattainable objectives. The most important IT-related development in 2020 will be this focus on connectedness – connected cloud, edge, applications, security, collaboration, workspaces and insights. Internet and the web are the navigation routes that we have been developing since the 1970s; the always-on, everywhere-connected Interwork© platform is the destination that we will be creating in 2020 and for years to come.

This eBook has been written to provide guidance to supply-side management responsible for digitalization strategies that affect sales and marketing of advanced IT solutions to SMBs and midmarket firms. The document is structured into six sections:

1. What’s past is prologue – The Path to Digitalization
2. Closing the gap between business priorities and IT challenges and the rise of digital
3. Business Issues over the years – paving the route to digital transformation
4. The rise of innovation – and digital – as a business focus
5. IT challenges over the years – paving the route to digital transformation
6. What’s future is epilogue: Connected Business

Download the free eBook here

For decades, channel partners have aspired to achieving ‘trusted advisor’ relationships with their customers. The concept is so ingrained that it is nearly impossible to separate the notion of ‘trusted advisor’ from the broader sense of being a partner.

But if the market is moving from value addition by the channel to value creation for the end-customer, isn’t it essential to move beyond ‘trusted partner’ status to becoming, in a meaningful sense, a partner of the customer, invested in the customer’s business success?

Techaisle’s WW channel partners study of 2445 channel partners and corresponding US channel partners study of 814 partners shows that 61% (66% in the US) are transforming their organizations to focus on delivering business outcomes to their end-customers, up from 42% three years ago. However, the figure is still below customer expectations which stands at 78%. There are several points of disconnect between the customer and the channel. One of the most important disconnects stems from the notion of trusted advisor relationship versus meaningful customer partnership. Only 51% of partners are building meaningful partnerships (55% in the US) and the balance 49% still believe in being trusted advisors. There is nothing wrong with it except that customers, especially SMB and midmarket firms are looking for a “super consultant” – a firm that can offer advice that is more complete than what is being obtained from most partners and which can move beyond strategy to deliver operational support that is tied to business outcomes.

These firms exhibit a clear preference for advisors who can move seamlessly from advice to architecture to procurement to deployment and finally to management. Nearly three quarters of SMB buyers would like their channel partners to be able to provide technology advice that is directly connected to business issues, and nearly two-thirds want a partner who is “invested in customer success.”

The nature of the sales relationship will be a critical determinant of channel success. 52% of channel partners globally and 58% in the US are still running their businesses on sales quota requirements rather than a book of business. When all channel partners call themselves “advisors” there is no differentiation left across partners. Channel partners need to focus on being a meaningful customer partner delivering customer success. And this falls into the realm of being a super consultant.

Digital transformation success requires that channel partners respond to a diverse set of challenges: the channel organization needs to be able to balance extensive consulting and executive customer management with product transactions, ongoing management services and tangible contribution to customer business success. Those that are able to align their capabilities with digital transformation requirements will be positioned for long-term success in IT’s highest-growth market. Techaisle’s digital transformation (DX) framework highlights six ways that channel partners can profitably connect with customers in their initial stages of the DX journey. At the beginning of the DX journey, channel partners should plan to deliver billable services in foundational technology areas:

1. Deployment of discrete foundation technologies needed to enable pursuit of DX business objectives: The requirement for these technologies should be clearly associated with capabilities needed within the DX roadmap; the systems themselves should be prioritized in accordance with the benefits that they deliver.
2. Provision of management/support for technology tied to the DX roadmap: In this step it is essential for channel partners to increase customer communication so that they understand the value associated with ongoing support and integration that maintains the currency of the DX platform by managing its discrete IT components.
3. Development and delivery of incremental feature/function objectives: Some of the technologies deployed within the DX framework may provide all needed functionality ‘out of the box,’ while others may benefit from ongoing enhancements. In these latter cases, both channel partners and their customers will benefit from the addition of features that provide incremental benefit to users/organizations that have absorbed current capability and who are ready for, and have need for, additional functionality.

Interwork technologies

Once the foundational level is in place and immediate benefits of the technology have been identified and communicated as ‘success stories’ within the customer organization, the channel partner should help the customer move on to the next DX level: establishment of connected ‘Interwork’ systems. Here, channel partner opportunities expand to include higher-value activities:

Recently concluded HPE Discover was different than most other analyst events in more ways than one. First, HPE announced that it has strategically dived into the cloud swim-lane with a confident commitment to offer “everything-as-a-service” by 2022. HPE has plans to offer entire portfolio through a range of subscription, pay-per-use and consumption driven offerings. It is a bold strategy and in direct contrast to its key competitors. Second, the phrase “doubling down” on SMB and midmarket segments was not only mentioned in the HPE Global Partner Summit on the mainstage, but also in the keynote address by Antonio Neri as well as by several senior leaders in their respective breakout sessions thereby targeting SMBs as a priority market segment.

Specifically, “everything as a service” or XaaS is a very astute strategy. As we near the end this decade, it is clear that the IT industry as a whole has been transformed by cloud - by the way it alters IT service delivery options, by the way it impacts the economics & resource requirements associated with that delivery, and by the applications and business opportunities that cloud unlocks for user organizations of all sizes and in all industries. We are increasingly immersed in a post-transactional market, where discrete sales of individual products or integrated systems are replaced by agreements to provide IT capacity and business functionality “as-a-Service.”

No segment of the IT market is immune to this trend. Sales of on-premise hardware and software are declining and will continue to decline; at the same time, leading web service providers, including Microsoft (Azure), Amazon Web Services, Facebook, Google and Alibaba, are building 40 percent – 50 percent of all x86 servers for internal use, and then providing access to these servers on a pay-as-you-go basis, and software developers are creating systems on these platforms to automate sales, marketing, finance, HR and other business functions.

Inexorably, the market is shifting from one defined by discrete purchase-and-deploy deals aligned with refresh cycles to one where businesses take a hybrid approach that blends a limited number of on-premise assets with a growing range of on-demand services. Although hybrid IT is inherently a more flexible and efficient way of providing IT services needed by businesses, it still requires effective planning to address important issues within business operations. There are many different types of hybrid IT solutions, but they all belong to one of three basic types: Solutions that respond to IT department needs, and are adopted by IT professionals; Solutions that address business management needs, where demand is driven by non-IT executives or staff members; Solutions that change both business processes and IT systems, and which require IT/business management collaboration for effective delivery. And these are the hybrid market segments that HPE plans to address.

But Antonio Neri’s ambition is far bolder and greater than simply pivoting to an XaaS business model. His promise is for a zero-friction future in a cloud-less world for all segments of the market. A strong foundation has been laid with HPE GreenLake, an outcome of its acquisition of Cloud Cruiser in 2017. At HPE Discover, HPE extended its GreenLake offerings for the midmarket to enable quick deployments of workloads with right sized and ready to go storage, compute and virtualization. For midmarket firms which do not own and manage their own data centers, HPE has partnered with Equinix and CyrusOne to offer co-location solutions. To help its channel partners that serve the midmarket segment, HPE has developed a new quoting tool that reduces quote time from 18 hours to 15 minutes. In addition, HPE also announced the availability of HPE GreenLake Chatbot - an artificial intelligence driven, automated chatbot that quickly answers partners' HPE GreenLake inquiries.