By Kathy Gibson – Artificial intelligence (AI) is the flavour of the day: if you are talking about IT today, AI has to come into the conversation at some point.
By now, anyone not living under a rock knows just about everything there is to know about AI and has most likely used at least one of the generative AI (GenAI) offerings – whether to craft an email, summarise a report, write a love letter (as one IT executive demonstrated in a GenAI session) or develop new code.
End user enterprises around the world are also busy developing their own AI strategies and figuring out how to incorporate the technology into their businesses, whether to improve productivity, personalise customer service or enhance competitiveness.
It’s clear that the IT industry is standing on the cusp of massive new opportunities relating to AI. We’ve already seen the market capitalisations of companies associated with the AI revolution rocket – for instance, Nvidia briefly became the most valuable company in the world.
This year alone, GenAI is expected to generate $2,6-billion in infrastructure spend, a further $1,6-billion in models and platforms, $1,4-billion in apps and a massive $2,5-billion in services.
So what are the AI opportunities for the channel, how can IT industry players seize them, and how is distribution pivoting to guide and enable partners?
Tim Humphreys-Davies, CEO of distributor Pinnacle, says that AI applications are starting to pick up in South Africa.
“We see it taking off in certain pockets,” he says. “We are just starting our journey so, to be honest , it is hard to assess the whole market. But we are seeing the questions starting to come from CIOs.”
Industry players are in agreement that the role of the reseller partner will change – and likely to become more strategic.
“If they align with the correct vendor and partner I think the resellers can offer advice and customised solutions ,” Humphreys-Davies says. “However, a lot of these solutions are untested, so my advice would be to partner with a vendor such as Nvidia and use the ‘best case’ examples that have been put into place in other countries .
“If the resellers can skill up quickly, they could position themselves as being first to market.”
As the market shifts, it’s not just resellers that have to pivot their businesses, but distributors too.
“Typically, a distributor would provide supply chain and product,” Humphreys-Davies explains. “However, in the AI world I think we have to provide more than that.”
Pinnacle recently became the first South African distributor to open a dedicated AI business unit that will be offering the total solution from hardware to a software platform, advice , scoping and implementation.
Humphreys-Davies says the division is currently offering a range of hardware solutions from Dell , Supermicro, Huawei , Nutanix and Nvidia.
As the sole South African distributor for Nvidia, it offers the GPU manufacturer’s hardware-agnostic software platform from Nvidia, as well as the vendor’s AI-specific vertical solutions.
The next phase of the AI business unit’s evolution will include scoping, project management, implementation and training for resellers to enable them to use these services and effectively sell on to their customers.
“We have put a team in place and should be up and running by September,” Humphreys-Davies says.
Photography by Jeremy Glyn for Tarsus in March and April 2017
Anton Herbst, group strategy consultant at Alviva Holdings, believes AI is one of the most profound changes we have seen in our industry – and it has to place the customer firmly front and centre.
“Any conversation about AI has got to be about the use case,” he says. “The role of the reseller becomes one of discovery rather than selling.”
At the end of the day, the channel is in business to make money, so it’s important to cut through to hype and figure out how to monetise this opportunity, Herbst says.
The first step for any partner is to first use the technology in their own business, he says. “If we consume it in our own businesses, we can learn about it.”
The next step is to build a digital business that offers AI as part of its service.
“AI works on the same model as the cloud; it is about selling a service. This is where resellers could be challenged if they are still on a transformation journey from transactional sales to service. Because AI is a step further on this journey. If you are a laggard in the as-a-service space, you will be a laggard in AI.”
It’s important to understand the different approaches in each model, Herbst says: “In a transactional world, you are selling something to someone. In the services and AI world, you need to identify the problems to be solved, then build or put together the pieces required to solve the problem.”
There’s no shortage of use cases demonstrating the success of the model, he adds, and the reseller has a role in various different areas.
“The obvious role is as the provider of services,” says Herbst. “But they can also be involved in AI governance. Someone needs to advise customers on data governance, usage governance and platform governance. You’ll find that the vendor has their own governance guidelines, and the customer has theirs – the reseller could be the glue that connects the two.”
While all AI services are currently being sold on a consumptive basis, Herbst believes this will soon switch payment for value, and again the reseller has a role to play in designing systems that deliver value.
“Partners also need to decide what they are good at; they cannot be all things to all people. AI is already a hugely complex environment and fragmentation will make it more complex. Most people don’t have all the skills they need in-house, so partners will need to specialise.”
A good starting point, he says, is data management, helping customers to tag and index their data so AI implementations can add value.
Security is going to be a major concern when it comes to AI, so partners should get up to speed on security services as well.
While the reseller partner role is shifting, so is the distributor’s, Herbst says.
“We have to realise that no partner has all the capability needed to build out a complete model for customers. So the distributor could act as a bridge between the new technologies, understand the fragmentation, bring them all together and decide what to solve for. This will give the partners time to build their own abilities.
“We all have a role: the vendor, distributor and reseller partner – and we have a chance to build something remarkable.”
South Africa and Africa are particularly well placed to take advantage of an AI boom, Herbst says. While skills are a global issue, and we are losing talent to international markets, our young population is a definite advantage.
“This is a serious economic advantage, and we need to exploit it.”
Dimitri Tserpes, chief technology officer at Mustek, is quick to point out that, while GenAI is a new buzzword, AI itself and automation have been around for some time – and there are many successful use cases for these technologies.
There are some indications that GenAI is right at the top of the hype cycle now, so we can probably expect a lessening of the excitement around it soon.
All industry verticals are identifying use cases, and studies expect AI to have major impact on the economy at large. Today, customers and resellers are largely still investigating the potential of AI rather than investing in it, but partners should be preparing their businesses for an uptake in AI projects.
Apart from the obvious role for the reseller in updating PC fleets to AI PCs that include neural processing units (NPUs) and run the latest operating systems, like Windows 11, we can also expect to see an increase on on-premise servers as some enterprises opt to run their AI services in-house.
Along with servers, there are opportunities in storage and networking, all of which need to be optimised for AI workloads whether in the cloud or on-premise.
Tserpes thinks partners will become trusted advisers for their customers and he agrees with Herbst that customers will invest in AI based on the value they derive from it.
“Governance is going to be important when it comes to AI,” he says. “Many corporates need to know where their data is at all times, so there will be rules and processes around what data can be processed in the cloud and what must be on-premise.”
He also cites cybersecurity as a big opportunity for partners, with particular attention to new attack vectors enabled by AI, as well as AI-based security solutions.
“At the end of the day, customers need to trust their systems, and this means they need to trust their partners. This is possibly the most important thing.”
Automation could be the most effective application for AI in the medium-term, Tserpes adds. “There is an opportunity to use AI to take away busy work within organisations, using AI to automate repetitive or dull jobs.”
AI has the capacity to further democratise IT, Tserpes says, and reseller partners have a particularly important role to play in delivering services to SME customers.
“The SME customer needs exactly the same level of customer service as the enterprise; and they have the same need to stay relevant. The channel has a role to play in helping them develop AI solutions that are secure, compliant and add value.”
Distributors are key to helping resellers stay relevant, and helping them to scale.
That resellers must position themselves as trusted advisers and solution providers is a common thread running through any discussion on AI and the channel opportunity.
Ryan Martyn, founder and sales & marketing director of Syntech.
Ryan Martyn co-founder and sales & marketing director at Syntech, explains that, from a hardware perspective, most AI processing occurs through server-based and cloud-based infrastructure.
This allows enterprise customers to leverage AI and protect data by creating closed AI environments. Meanwhile, AI is increasingly being integrated out-of-the-box on personal computing devices, with Microsoft leading the charge.
“We believe the benefits of AI will predominantly come from process optimisation rather than hardware innovation,” Martyn says.
“Resellers that embrace AI will be able to streamline and automate processes, giving them a competitive edge. Businesses that fail to adopt AI risk being overtaken by more agile entities capable of dynamic operation and market adaptation.”
He believes that, since AI itself does not have specific intentions, its power lies in how individuals and organisations utilise it.
“Resellers who effectively integrate AI into their operations will achieve superior results. This presents a significant opportunity for building value-added services that incorporate AI for better and more meaningful engagement.”
There are also opportunities in the hardware space, too. “AI is resource-intensive, particularly in terms of GPU usage, power, and cooling requirements. If cryptocurrency mining significantly impacted GPU allocation, AI demands will be exponentially greater.
“We anticipate that Nvidia will prioritise the AI market, potentially allowing more space for other brands to enter the traditional gaming market.”
Craig Nowitz, CEO of Syntech, says a number of hardware products are already increasing their competitiveness with the addition of AI.
“For instance, the integration of AI into WINX hardware is a game-changer, significantly enhancing the consumer experience by delivering smarter, more adaptive functionalities,” he says. “Two notable examples from the WINX product range are the WINX VIBE More Adaptive ANC Earpods and the WINX CALL Pro AI Noise Cancelling Headset. Both products will arrive in the market over the next few months.
“By leveraging AI, WINX products deliver exceptional performance and convenience, setting a new standard in consumer technology.”