Key investments driving the channel recovery
Sherifa Hady, EMEA Channel Sales Director at Aruba, a Hewlett Packard Enterprise company writes about how the channel needs to show a great urgency to decide on the role they can play with accelerating digital transformation to enable customer expectations that look completely different to what they did two years back
As customers across EMEA continue to grapple with today’s ever-evolving pandemic landscape and their investments shift to support new infrastructure needs for a digital-first world, business recovery in the channel is proving a varied and staggered journey. For some channel businesses, activity has slowed right down, while for others it has had to accelerate in order to keep pace with the need to consolidate, restructure or expand existing assets for services such as retail and education. Yet in spite of the varied impact on their businesses, the desire for growth within the channel remains strong.
For Aruba, keeping close to our partner networks in new, virtual ways has been critical to better understanding what they need to enable this growth, but so too has communicating our own vision of what lies ahead in this time of incredible transformation. What technologies can we expect to come to the fore and how will this drive the decisions businesses make about their IT infrastructure?
Aruba recently surveyed 2,400 IT decision makers (ITDMs) in over 20 countries to find out how they have adapted to new IT and business demands in the wake of COVID-19, what investment decisions they are making as a result, and what consumption models are now being considered – all against the backdrop of navigating the new data era. A number of the key findings will have significant relevance to channel partners as they look to evolve their ongoing services and return to growth, so I’ve outlined three of the most useful below:
FINDING ONE: Subscription services are skyrocketing
ITDM’s who have reported the most significant impact from the pandemic are not just the most likely to be investing more in new technologies, they are also more minded to pursue models of consumption that give them greater financial control.
When asked what IT consumption models they were most likely to explore in light of COVID-19, just 8% of respondents said they planned to continue with capex investments only. By contrast, 55% said they would explore a SaaS model for either hardware or software. The study also found that the average proportion of IT services consumed via subscription will accelerate by 41% in the next two years, from 29% of the total today to 41% in 2022.
While we all knew the potential for digital transformation to explode, the acceleration has been much faster than any of us could have imagined. And it has brought with it an even greater urgency for those of us in the channel to decide on the role we can play to enable customer expectations that look completely different to what they did two years back. As the pandemic forces organisations to evolve their business models to be more agile, adaptable and fit for purpose, as a Service is here to stay. It’s therefore critical that partners develop a robust as a Service model while keeping their options open for more traditional ways of doing business.
FINDING TWO: Cloud-based networking is on the rise
When asked about where they were looking to spend their money, 83% of respondents globally said that they were likely to increase their investments in cloud-based networking over the next year, underscoring the importance of cloud for remote management at scale.
The increase in cloud-based networking comes with its own set of challenges, however, as companies battle to respond to the needs of a distributed workforce as well as how to seamlessly enable social distancing and contactless interfaces, all while maintaining a secure perimeter.
To tap into this increased investment, partners must decide on a clear cloud-based strategy to make sure that they have the right tools and management software available to help customers through this transition. The need to offer on-premise, off-premise and hybrid solutions to scale for a wide range of customer requirements will also mean that they have to select vendors that offer a certain level of flexibility and choice when it comes to hardware, software and licencing.
FINDING THREE: Organizations are gearing up for a future at the Edge
Driven by the relentless growth in data from connected devices, in the coming years the generation, transmission, processing and storage of data at the Edge will become pervasive – and organizations are already recognising this. In fact, our findings showed that 82% of IT leaders identified implementing integrated systems to handle data at the Edge as an urgent requirement.
And encouragingly, 72% of global IT leaders are actively using Edge technologies to deliver new outcomes, while another 16% are planning to do so in the next year.
Though still largely regarded as a nascent trend, those already using the technology have identified the greatest benefits as improving operational efficiencies and costs (53%), greater agility and increased security (44%) and the ability to create new products, services and revenue streams (40%).
But to realise these benefits there are a number of pressing issues to deal with. For example, 92% of IT decision makers felt their organization is missing the skills needed to unlock the power of data, citing Machine Learning and Artificial Intelligence as areas of particular worry. As well as contending with these skills gaps organizations also have concerns around security vulnerabilities when connecting IoT devices at the Edge, with 33% highlighting this as a top barrier to implementation.
To prepare for what lies ahead, partners need to have a deep understanding of customer needs in order to provide them with the solutions to effectively deploy and access networks remotely, seamlessly and securely. Data is shifting from the data centre to the Edge, and customers are looking for insights and solutions on emerging trends. There is a need to lead, to step in and provide these insights and take on a role to share learnings and offer key skills that may be missing.
Returning to growth
With no end in sight to today’s turbulent times, channel organisations should be advising their clients on products and services that support lower cost models, set them up for anticipated future technologies and support them to enable things like seamless remote work. As we embrace a new reality where IT infrastructure is critical for recovery and resilience, our channel partners face a delicate balancing act: to put in place the new infrastructure and tools needed to support clients in the new normal at a time where investments are under intense scrutiny. But those who manage to do so will reap the rewards.