IT channel 2020: Collaborate or die
Everybody’s talking about ecosystems. One of the most widely covered statistics from the Accenture ‘Cornerstone of Future Growth’ report is that ecosystems are the primary reason why 76% of business leaders believe that current business models will become unrecognisable over the next five years.
It’s the same statistic that leads one of the most important conversations in the Forrester analysis of the trends set to influence the channel in 2020 by principal analyst Jay McBain – the shift towards trifurcated channel models (influencer, transactional and retention channels) and the move towards channel professionals becoming ecosystem professionals.
The channel is in a state of evolutionary flux as traditional sales and distribution models continue to change or stagnate, dependent on industry or capability. Collaboration across multiple partners has become critical to ensure that vendors, system integrations and service providers are capable of building these ecosystems and delivering the right solutions.
The channel has to show a level of maturity that allows for a more collaborative approach that provides services across multiple platforms.Sven Blom, Teraco
“The technology sector is so vast and ever-changing that it’s almost impossible for one solution or one provider to cater for all eventualities that a client may need,” says Alex de Bruyn, CEO of DoshEx. “It becomes limiting if providers try to invest in such a wide range of skills and technologies. Collaborating and focusing on each provider’s niche will result in better quality solutions within that core niche.”
One provider servicing all is no longer a viable business model. There’s little chance that the service and solutions provided will deliver the scope and scalability that the enterprises needs. As Sven Blom, head of sales at Teraco, points out, the Jack of all trades approach is no longer working.
“Customers want a host of services and it’s impossible for service providers to develop their own comprehensive solutions,” he says. “You can’t be the best at every single thing. Collaboration is best of breed and suits clients and their choices, and the ability to collaborate is exponential. The market has become incredibly complex. To meet demand, the channel has to show a level of maturity that allows for a more collaborative approach that provides services across multiple platforms.”
Cloud, changing business needs and perspectives, economic upheaval and shifting perspectives around technology are some of the fundamental drivers of this changing marketplace.
The channel is no longer the sole route to technology and implementation – organisations are doing it for themselves and, often, changing their own business models to become technology service providers in their own right, such as the car engine manufacturer creating its own sensor-led technology solutions, the forklift manufacturer reshaping its offering based on the Internet of things.
The channel has to learn how to collaborate to create the ecosystems and holistic solutions that meet buyer needs, not traditional industry behaviours. It’s less about sticking to the turnkey approach and more about partnerships that can fill the new gaps and plug the new holes that pop up amid disruption and digitalisation.
A lot of traditional resellers don’t have the technical skills that are needed today, and they have to collaborate to sustain themselves over the long termTamzin Gray, Epson SA
In the Forrester analysis, McBain points out that the transactional channel is not so much being replaced as being supplemented by the non-transacting channel. The tiered partnership schemes are becoming increasingly gilded by the influencer channel made up of affinity partners, referral agents and alliances. In 2019, Microsoft announced the arrival of 7 500 new partners, of which 80% were non-transacting – this fact alone highlights how different the market has become and how critical collaboration is to individual business success.
“In this day and age, it’s no longer just a case of traditional hardware vendors and resellers, there’s definitely more of a solution requirement out there,” says Tamzin Gray, senior sales manager, Epson South Africa. “A lot of traditional resellers don’t have the technical skills that are needed today, and they have to collaborate to sustain themselves over the long term.”
Skills are another of the key drivers of this change. As Ryan Jamieson, solutions and innovation officer at Altron Karabina, points out, one of the biggest challenges in South Africa is the lack of access to skills.
“We are breaking out from our geographic boundaries to start engaging with other individuals and companies that don’t necessarily sit within our region, but have the skills we need to solve specific problems,” he adds. “The reality is that the diversity of requirements and customers has meant that we have to collaborate. Yet, in South Africa, there are still traditional attitudes and behaviours that are limiting this potential and this growth.”
Clinging to the customer
The South African ‘see and speak in person’ attitude is a major obstacle on the pathway to collaboration. It’s so entrenched that it minimises the ability to pull in diverse skills and companies and the channel’s ability to truly meet shifting client needs. There has to be a mental move towards the collaborative, global model that allows for the channel and the customer to explore solutions and teams that span continents and countries, using technology to engage and manage projects and implementations.
“It’s been a liberating experience to engage with people in India, the UK or anywhere else in the world, collaborating via multiple tools and platforms. It’s such a positive trend,” says Jamieson. “In South Africa, we want to see the person, drive to them. This has to change.”
The South African ‘see and speak in person’ attitude is a major obstacle on the pathway to collaboration.
Another hurdle is the inability to share. Companies, faced with a complex economic and political environment, are inclined to cling to customers, trying to fill all the round gaps with square solutions so they don’t lose market share. They want to build empires and divisions and services rather than remaining focused on their specialisation and expanding their business through partnerships.
“People have to get over the need to do everything for themselves,” says Andrew Cruise, MD, Routed. “There is a growing realisation that resellers and partners can’t do it all themselves anymore and have to adopt a more collaborative approach in order to benefit from the different streams of work. I think this is changing now, though, as end-user demand is forcing people’s hands.”
It’s a viewpoint shared by De Bruyn: “South African businesses tend to be very proprietary over their solutions and, with our tough economic conditions, everyone seems to fight for control of the client. As we start to collaborate more effectively, I think we’ll develop better economic conditions for the industry to benefit everyone involved.”
That said, South Africa is not just a tired old boomer clinging desperately to the legacy systems of the past. The country has unique conditions and environments that offer the channel immense opportunity to grow, both locally and abroad.
In more technologically advanced countries, users are not as forgiving as they are locally, which makes it difficult for the industry to evolve alongside the user and adds pressure from the outset. In South Africa, a more adaptive user base and environment allows for more constructive feedback and testing, and is an opportunity for the market.
“This is becoming more recognised globally and if providers had to collaborate more effectively, it would open up more global opportunities for the combined solutions,” says De Bruyn.
South Africa may have upheaval and skills shortages and some legacy attitudes to overcome, but, equally, it has a reputation for picking up its skirts and just getting the job done.
As the channel moves into a market that more closely resembles the quicksand of Indiana Jones, it’s an opportunity to use niche providers, influencers, strategies and digital tools that allow for collaborative answers to the customer’s biggest questions.
* This article was first published in the Q1 2020 issue of The Margin magazine.