- September 26, 2017
- Posted by: Theresa Caragol
- Category: Strategy and Trends
Over the last 40 years, multiple technology channels have developed in parallel based on differing technologies, unique billing methods and a variety of service delivery models. In the process, each of the channels developed and maintained their own channel cultures. The Audio-Visual channel, for example, and the Information Technology channel may have common vendors but deliver their services through very different sales and service models.
Today’s technology landscape is changing faster than ever. Data is all-digital, transport is all IP, and billing is based on consumption models. The convergence of these environmental factors has created the opportunity and need to consolidate and provide channel solutions that are culture agnostic.
Minimizing operating expenses, improving the customers’ experience, and increasing revenue growth are the top priorities of today’s business owners. These owners are smarter about possibilities made available through technology to run their businesses better and to transform the business model. To do more with less. When it comes to technology support, these owners want “one throat to choke.”
To survive the rapidly changing pace of business technology consumers, the technology providers must understand and operate in concert with the five major forces affecting these parallel channels. By leveraging the Five Forces, solution providers will serve their clients better and, in turn, prepare their own businesses for the decades ahead.
The Five Forces are:
1) Power has shifted to the end user. Incremental investments in business technologies will be justified with new capabilities, not better infrastructure. Yes, infrastructure is important, but in most situations, it is good enough. Instead, client conversations will center around business transformation and business enhancements. Today’s end users require successful outcomes, not goal-less activity. Reliability and uptime are assumed. As the collective voice of the end customer, the channel has a unique opportunity to make vendors aware of the needed shift in product and services components built for solution provider integration.
2) Convergence – finally! IT, AV, AIDC, copier, physical security and telephony will converge around integrated solutions. This convergence will give rise to five enterprise platforms: information systems, customer experience, data analytics, IoT and ecosystems. Channels will consolidate and partner in a Prime/Subcontractor model to create comprehensive, innovative solutions. Successful vendors will both recognize and embrace this force to create converged offerings themselves.
3) “Vertizontal” Solutions. Technologies, since the introduction of the IBM PC, have been structured in the horizontal, driven by sake of scale and cost effectiveness. Intel made microprocessors, Microsoft made operating systems, WD and Seagate made storage, and Cisco made networks. With the growing importance of the business need, Cloud-based vertical solutions are in demand. Cloud is the manifestation of the vertizontal approach. Vertizontal solutions combine the best of horizontal scale and vertical specificity. As a result, solution provider business models will become more specialized in competencies such as security, advanced networks, or industry applications.
4) Help Wanted. Shortages of high tech experienced labor will drive new forms of tech delivery and higher productivity. Solution providers will need to become the virtual CIO for the SMB and will join their clients’ leadership at the table. Solution providers will become smarter and adopt technologies such as AI to enhance their operational efficiency.
5) Mutual Trust. Partners will build critical dependencies with each other to deliver solutions to clients. Mutual trust must permeate through all relationships – client, vendors, and partner. Only those partners that build mutual trust will advance to the next generation of business solutions.
Technology channels have flourished for forty years coping with migrations from standalone PC’s to workgroups, to vast networks. Change has been largely confined to technical elements: smaller, faster, cheaper. The next wave of change will be a shift in a different dimension, the dimension of digital business transformation. Whether a solutions provider or a vendor, understanding the Five Forces will help you adjust your offerings and your value proposition accordingly. The resulting new channel will be client focused, with common purpose amongst solution providers and their respective clients, a purpose supported by mutual trust. Only those vendors and solution providers who recognize and support the Five Forces will enjoy the most fruitful success.
Interested in learning more? Download the infographic here.