Change, they say, is the only constant – and this is certainly true for the ICT reseller channel in South Africa.
It’s been almost a perfect storm of change for resellers, with new technologies and market consolidation both taking a toll on local players. But the change has brought new opportunities too.
Guy Whitcroft, interim CEO of Westcon-Comstor, points out that the new trend towards digital transformation is a double whammy for resellers, who need to transform their own businesses while gearing up to help their customers to transform theirs.
He believes that the fourth industrial revolution will change the world in ways we can’t comprehend, blurring the lines between physical, digital and natural – and it’s happening very quickly.
“We are seeing huge areas of change,” Whitcrosft says. These include the Internet of Things (IoT), robotics, 3D printing, quantum computing, materials science and more.
“Look at the services we just take for granted: buying things, watching movies, booking a restaurant table finding a hotel room, backing up our data, even taking a course online. All of this is assimilated into our word today.”
Whitcroft points out that the level of change in the IT industry is almost unbelievable. “People around the world are moving from an outright purchase model to a pay-per-use economy,” he adds. “And it’s not just IT that is being affected. Across the board, people just aren’t buying stuff, but are renting as they need it.” In the IT industry, this is most prevalent in the software infrastructure space, he says, with software usage migrating quickly to monthly payments per seat.
“Some of the software companies are battling with this, because their income streams are diminished and spread out. And this changing market is not easy for end users or resellers either.
On the hardware front, the traditional desktop environment is changing very quickly, Whitcroft explains. PC sales have declined rapidly, originally in favour of tablets, but now those are dropping as well.
“Users don’t have to replace their hardware as often as they used to, and people are sweating their assets for a lot longer than they used to.”
The trends to software-defined everything (or SDx) is also having an impact on vendors, distributor and resellers as they adapt to an environment where servers, storage and networking are more about the software that manages them than the hardware.
“I think we are experiencing a period of quite marked change,” Whitcroft says.
On the technology front, new trends and services are driving new ways of doing business – both for resellers and this customers.
Communications, cloud and security
“What is becoming clear is that the reseller channel needs to play in the communications space in a broad sense. This includes networking, but cloud is also huge. It’s still an underserved area, particularly for SMEs, probably because it’s not well understood.
“But there are compelling reasons for SMEs to move their business into the cloud. If they use cloud-based hardware and software as a service (SaaS), they never have to worry about running out of capacity or doing backup or disaster recovery – it is all part of the package.
“And security is built in, so there’s a lot to be said for cloud.”
There are financial implications to cloud as well, as it forms part of the opex (operating expenditure) budget rather than capex (capital expenditure)
Security is another big play in the market right now. “Scarcely a week goes by without another big breach,” Whitcroft says. “There is also lots of talk about international inter-government hacking going on, which will have a spill-over effect into business.” New security issues around cloud computing and the Internet of Things (IoT) will also serve to fuel the security debate, he says.
Resellers might feel a little overwhelmed when they consider all the change happening around them, and consider the possibility that technologies like cloud computing could have the effect of squeezing them out of the equation.
It’s times like these that the distributor should be a trusted ally, helping them to negotiate the tricky waters of new technology, guiding their businesses to where they are successfully able to meet their own client needs.
“From a Westcon perspective, we are probably the only distributor that operates in all the new technology spaces,” Whitcroft says. “We are experts in cloud, security and communications, with the products and services that can help our resellers to thrive.
“Our focus is very much to ensure that we are not competing with our customers. Rather, we are using an aggregation of skills and services to make their lives easier.
“You could almost say we are in the aspirin business in that we take their headaches away.”
It’s all about the service
For resellers, transitioning to the digital economy is about more than being able to offer a new menu of products. Whitcroft believes that the issues of customer service and customer experience are becoming more important.
“So resellers increasingly are having to differentiate themselves by the experience they provide for their customers. They need to be able to help customers to understand the new moves, and how cloud can help to transform their business processes.”
In fact, resellers have to go beyond providing technology to fit their customers’ business needs – they need to start helping customers to understand the best way to manage their businesses.
“It is increasingly becoming a business enabler, and it integral to the business,” Whitcroft says. “The days are past when IT was off to the side. These days, organisations have to view IT as a part of the business that is as important as any other part of the business.
“But they key is that it has to be part of the business that operates across all fields.”
As customers prepare for an embrace the new digital world, resellers are in a great position to add a lot of value.
“Some end users are ahead of the game, but a lot of them aren’t,” Whitcroft explains. “A lot of customers are concerned about whether they are doing the right thing about cloud and ensuring that they are secure.
“If resellers ignore digitalisation, it will become a threat; but if they embrace it, it becomes an opportunity. In the digital world, there is a wider customers base, with many more interactions. But if try to retreat into the server room, and lock the door, then it’s a threat and the business will suffer.
“Resellers need to help customers understand that – and help them through it.”
Westcon-Comstor set up to partner
Westcon-Comstor is set up to make this as easy as possible for its partners. “We add a lot of value that goes beyond the technology perspective,” Whitcroft explains.
“We are expanding our range of services to cover all the areas our resellers need to, so we can help our customers help their customers.”
This means investing in the new skills and resources that resellers need, and helping them to get there as well.
“The whole area of cloud is really important here,” Whitcroft says. “In the SDx environment, resellers need to be on top of this technology, understanding their customers’ needs and helping them to understand where SDx fits in. “So we focus on having really good skills in those areas.” Hardware skills are still relevant, but more often than not, hardware is the add-on to the real solution, Whitcroft points out.
“Overall, we are moving into a multi-device, always-on environment.”