Jan/Feb 19 - ChannelVision Magazine

One bit of purely good news, attitudes toward the impact of cloud computing have transformed from nearly a decade ago, including during the last two years. The opportunity presented by cloud is cited as the number one reason by respondents to feel posi- tive about the IT channel’s future, shows the survey. More than half (56 percent) of respondents placed it on top of the list compared with the 39 percent that felt this way in 2016. Less than a third see cloud computing and the shift away from on-premises as a factor leading to pessimism, though that is statistically flat from the CompTIA survey in 2016. “Cloud has always been a lightning rod for the channel; one part loving it, one part hating it, and nearly no part able to ignore it,” said CompTIA re- searchers. “As time has gone on, however, the reality that cloud is now the fundamental enabling infra- structure for IT has sunk in, and the channel has had to decide how they were going to use it.” Beyond the cloud, nearly across the board, IT channel partners ranked factors that bolster good feelings about the channel’s future significantly higher in 2018 than they did only two years prior. Re- spondents expressed increased excitement about a broader use of technology by all types of customers, growing customer demand for business and consult- ing services, and businesses continued need to put their faith in a “trusted advisor.” Even the increased complexity of today’s IT solutions and services is seen as a positive for nearly half of respondents, compared to just more than a third who felt the same way in 2016. Vertical Approach Relating in many ways to the use of emerging technology, increasing complexity, the shift to cloud and the broader use of technology in general, vertical specialization is becoming increasingly popular among IT channel partners, show CompTIA’s figures. Virtually all channel respondents in the survey reported at least some vertical industry work within their business, with three-quarters describing that work as important. Of that 75 percent, four in 10 deemed their vertical business as very important. “Focusing on an industry allows channel firms to move beyond horizontal solutions to become more granular in what they do; in effect, attaining know-it-all status in a niche market such as healthcare, retail, manufacturing and beyond,” explain CompTIA researchers. Vertical Industries Channel Firms Focus on Today Professional services (accounting, legal, etc.) 41% Manufacturing 29% Retail/wholesale 24% Healthcare/medical 23% Financial/Banking/Insurance 21% Media/Publishing/Entertainment 16% Hospitality/Hotels/Restaurants 14% Education 12% Government (federal, state, local, military) 11% AMTUC (Agriculture, Mining, Transportation, Utilities, Construction) 11% Non-profits/Associations 9% Source: CompTIA The drivers toward virtualization are varied, including competitive differentiation (named by 42 percent of respondents) and vendor push (22 percent), but more than anything, channel partners say the trend is customer driven (64 percent). That’s because, quite simply, verticalization means tech providers are speaking the customer’s language. Likewise, 54 percent of channel partners cited vertical specialization as a competitive differentiator. “Most basic infrastructure engagements – devices, networking, security and other hardware – are repeatable; it’s the same sales and implementation process whether you are dealing with a small doctor’s office, a car dealership or a manufacturing plant,” explained CompTIA researchers. “But it’s understanding the software, all of those specific- use applications that pertain to the industry in question, that will earn you true vertical street cred.” Applications-specific vertical expertise, in particular, fits well in today’s cloud-based software world, said CompTIA. Many cloud-based ISVs offer discrete applications tied to specific industries, and these are often small firms lacking largescale sales infrastructure but wanting to grow. “As a result, many are beginning to experiment with indirect channel partners to grow their footprint and penetrate various customers segments,” said the CompTIA study. CompTIA is quick to note, however, that at least some respondents that report to doing vertical work may only be selling horizontal infrastructure solutions to a cluster of customers in the same industry. “That is not the same as becoming an expert in the applications and business processes that an individual vertical such as retail requires,” said the IT association. In other words, take this findings, as with most self-reporting, with a grain of salt. Source: Global Market Insights Percentage of IT Source: 451 Research 250-999 employees 1-249 employees 1,000-9,999 employees 10,000+ employees Company-owned or leased data center 50.0 100.0 150.0 200.0 Body Electronics Infotainment Powertrain Chassis & Safety 2017 2024 Across functions, respondents report that the most significan benefit com from adopting AI i manufacturing and in risk Source: McKiney & Co Manufacturing Risk Supply-chain management Product and/or service development Siralegy and corporate finance Service operation Marketing and sales Human resources Value to date from AI adoption, by business function % respondents Moderate value Significant value 80 23 57 80 29 51 76 29 47 76 31 45 74 35 39 74 35 39 69 34 35 69 36 33 Factors Leading to Optimism about Channel’s Future Source: CompTIA Cloud computing is opening up new opportunities Cloud computing is opening up new opportunities Emerging technologies are broadening opportunities Complexity of today’s IT solutions and services Customer demand for business consulting services Customers still want a ‘trusted advisor’ Customers want internal IT staff working on strategic projects Demand for vertical industry expertise Vendor direct sales insufficient to meet demand 56% 2018 2016 52% 48% 47% 43% 39% 39% 30% 16% 26% 29% 33% 32% N/A 35% N/A 37% 39% channel management 38 Channel Vision | January - February, 2019