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New channel pressures to emerge in 2014

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 29 Jan 2014

This year will put new pressures on the way in which IT solutions and services are brought to market.

This is according to JJ Milner, MD and chief cloud architect at Global Micro Solutions, who notes that business will see more vendors going direct, and channel lines will no longer be clear-cut.

"The channel and vendors will need to become accustomed to this new trend as they start to step into each other's territories and experience a new type of competition," he says.

He adds that one strategy for dealing with this will be differentiation- channel partners will need to become more than just a billing conduit and will be under pressure to come up with a strategy for adding value.

Scale is going to matter more than ever before, states Milner, as costs rise and the South African rand continues to weaken.

"Smaller 'lifestyle' businesses rely on face time and are not in the position to market themselves as well as larger businesses are. They also can't charge a lot for their skills, which will pose a problem in a highly competitive market. These lifestyle businesses are going to become more like lifestyle traps if they can't find a niche."

Milner also points out that, because of exchange rate fluctuations, South Africans might begin to employ local services for cost predictability as opposed to dollar-based transactions. This may well lead to more hybrid deployments, where customers will select overseas products only when their benefits trump data gravity and price points offered by local vendors. The two will need to work together.

"There will also be an emergence of an African start-up ecosystem for cloud services. There is already an entrenched start-up culture in South Africa, but this will spread to the rest of Africa, and we'll start to see the rise of the 'boutique' provider."

He emphasises that this will necessitate a shift in mind-set.

"In Silicon Valley, failure is a badge of honour. It means you have tried and you have learnt valuable lessons. Here, if a start-up fails, you can't show your face. A start-up culture will offer small businesses the chance to fail fast - and learn the iterative lessons to get them back on their feet and trying again," explains Milner.

He also predicts that the surveillance hype will fizzle out.

"Although many headlines were grabbed by Edward Snowden's revelations and many companies preached the value of IT security and data protection, people will simply start to forget this in 2014. I believe that data gravity - that is to say, the practical implications of managing and accessing large amounts of data - will drive the need for high-speed, secure, localised access - which will, ultimately, matter more than the Protection of Personal Information Bill and the National Security Agency for local adopters of cloud."

All in all, Milner says 2014 looks set to be a year that will see global trends gaining a foothold in Africa, with SA as the stepping stone.

"While global financial volatility will have an impact on the way we do business, this also has a chance to drive local development and innovation, so it may turn out to be a good thing," he concludes.

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