This year’s model – Peter Olive, CEO, Vortex 6
As the UK emerges from a second lockdown, the road ahead does not look smooth. In fact, the experience of both the first and second lockdowns demonstrates the extent to which a gradual economic recovery will hinge on a viable resolution to COVID-19, a successful vaccine roll-out, continued government intervention and certainty over the future relationship between the UK and EU. Subject to these unknowns, we could see GDP growth in 2021 oscillate between 4% and 8.4%.
From a channel perspective, partners are facing several challenges. In July, Cisco announced that it was cutting 6,500 jobs, or 9% of its workforce, to focus its business and reduce operating expenses by $1 billion a year. Based on conversations Cisco has had with customers about their technology strategies, it is continuing to switch its business from traditional hardware – servers, routers and other enterprise products – to software. As part of this, it is merging its enterprise networking and data centre businesses and expanding its cloud solutions to include server products. Without doubt, this is impacting the channel.
Throw in the economic shock of the pandemic, and channel partners face the prospect of remodelling and restructuring their business against a backdrop of massive uncertainty. This can be a source both of great concern and major opportunities.
Refocusing the business
As we head into 2021, businesses will have several key focus areas:
*How do we maintain and grow revenue?
*Where can we make efficiency gains?
*How can we manage costs?
*How do we ensure that we invest in the right areas and deliver what our customers need?
*How can we automate more and reduce business risk?
*How can we remain flexible and agile to change quickly if we need to?
Some might also be considering how to do this with a reduced workforce, which will only be possible by automating and managing tasks digitally so that they can either do more with the same number of employees or do as much with fewer people. These are the dynamics that businesses will be grappling with going into 2021.
As businesses around the world accelerate their digital transformation plans and migration to the cloud, most channel partners will be looking at how they transform their business from selling hardware to selling software and annuity revenue to increase profitability and viability.
Moving to an annuity business
No one can become an annuity business overnight; it requires investment. But if channel companies don’t go down this route, they run the risk of being less relevant in the future. Shifts in the market will require different skills, experience and new ways of thinking, with new processes and methodologies – right down to how to incentivise employees.
The challenges of moving to this new model are not to be underestimated. Yet, if done right, the rewards can be significant, not just in revenue terms but also margins, profitability and consistency of income.
Work smarter to avoid bumps in the road
Johnny Carpenter, VP Sales EMEA, Iland
In 2021, organisations will start to build everything around a remote site infrastructure and working practices. Many were caught unawares by the current pandemic and they will be keen to ensure that they are in a position to implement a working from home plan as and when needed.
A lot of channel partners are going to have to move into a world in which they weren’t well positioned before. Traditionally, partners were trusted by the end customer, particularly as an MSP, as they would sell the customer servers and local software and would manage it. However, organisations now have a better understanding of their own capabilities and are questioning MSPs on how they can be more agile. Customers, including CEOs and Finance Directors, are using Zoom, Webex and other remote collaboration tools and that is driving conversations from the top down. Partners will need to work smarter and have a greater understanding of these new technologies and new ways of delivering value to their customer base.
In addition, many more partners are turning to subscription and OPEX services to avoid the heavy bumps in the road that CAPEX services have been hit with this year. The key is education – ensuring that sales and solutions teams not only position the new services customers are asking for but make sure they truly meet customer requirements. If I was to put in a nutshell how our most successful partners have managed to pivot it would be ‘Train your team, educate your customers and make your services compensation neutral for cloud and on premises’.
The future is green
Richard Tang, Founder and Chairman, Zen Internet
Peering through my crystal ball, my view is shrouded in green. Against the backdrop of the UK Government’s 10-point green plan and the United Nations Climate Change Conference in Glasgow, consumer awareness of green issues will hit an all-time high, with shoppers demanding that companies care for the planet as well as profit. In response, more businesses will intertwine their financial objectives with their sustainability objectives. No longer will they sit separately. Furthermore, companies will stop delegating sustainability to the marketing department; it will be front and centre at board level, influencing strategic decisions. Those up for the challenge will be keen to wear their glistening green credentials as a badge of honour. B-corp accreditation will double, and the private sector could have its greenest year on record.
Article to be continued tomorrow…..