The year ahead for the channel

What are the trends and opportunities that will define 2019 for South Africa's channel?  

What are the trends and opportunities that will define 2019 for South Africa's channel


 Times are tough, but transformation is in the air. There’s a real opportunity for channel businesses that can adapt, starting with the overarching theme for the entire digital industry. Many think 2019 will potentially be a tumultuous year due to the upcoming elections. But things have been topsy-turvy longer for the channel, for one specific reason: services. The mantra to customers has been about changing towards more service-centric business models. Those words now challenge the channel, says XContent’s CEO, Danie de Lange. “Customers want tangible value. No more big bang approaches; they want a piece-by-piece approach. This means getting more out of what they have and also getting better feedback for their own thought processes.”

Business-becoming-IT has taken root. IT is shifting from slow-moving, grandiose projects to quick, grassroots delivery, the kind of pace businesses like. Now that IT is much closer to a business pace, they expect channel delivery to fit the purpose. Selling licences is being replaced by devising the shortest route between two business points.

“There’s definitely a new level of maturity: businesses see IT being freed up and this is driving maturity in the customer space. IT people used to reduce tech conversations to the technical level. Business people have no appetite for that,” adds De Lange.

The cloud expands

 The latter measure through service metrics: POCs, consumption-based pricing, clear reporting and reliable feedback on ideas is what the market now expects. The channel that can provide will excel in 2019.

It seems 2018 was a great year for the local cloud channel. According to Axiz’ CDO Andrew Moodley, the company experienced exponential growth in cloud revenue.

This is related to practical awareness at higher levels of companies grasping the business reasons for using cloudbased technologies. Cloud software and infrastructure services have been winning customers, nudging companies to more mature ideas such as platforms.

The challenge for the channel is how to adjust to these new demands. Moodley says some sections are faring better than others: “ISPs and ISVs have been better able to adjust to the new services, probably because they're already familiar with subscription- and service-based approaches. Resellers are having a much harder time finding their place among these new offerings, and systems integrators are somewhere in between.”

Since business customers value flexible responses to specific challenges, many suppliers are teaming up with other companies to create suitable answers. For example, a reseller could still move a consignment of tablets to an enterprise, but usually in tandem with a new mobility solution installed by a service provider. In 2019, these kinds of partner responses will lead market sales.

Networking’s new look

Modern services require connectivity, putting networks back in focus. In response or perhaps as a serendipitous coincidence, networking products have become more service-based. It’s less likely for a business to own its networking systems, instead using Networking-as-a-Service (NwaaS).

“Legacy networking is still a fact in the market, but the service side is a fact as well,” says Oliver Potgieter, Cloudbox’s CTO. “Cloudmanaged networking is more affordable, so companies go for that if they can. But many are also waiting for equipment end-of-life, at which point NwaaS is very appealing.”

Fibre is also boosting networking’s profile. Businesses used to fret over slow internet; now, they want internal networks that match fibre’s muscle. NwaaS doesn’t require major upfront investment, deployment is accelerated and there's much love for the improved reporting that new network services offer.

“Reporting is very attractive to the business side. It makes IT less complicated,” adds Potgieter.

Through heightened awareness around networking’s role in modern business systems, 2019 is full of opportunities to offer NwaaS to a changing market.

Security gains traction A connected world has come with a steep price: security. The same complexity that creates terrific potential for companies is also being exploited by criminal hackers and crime syndicates.

If measured by awareness, the market is doing well, says Helen Kruger, Troye MD: “We have a lot of awareness around weaknesses, especially in the wake of the Liberty hack and similar events. Business knows of the dangers. But not a lot is being done yet. The market is learning to pick its battles and many are learning the hard way.”

Companies are also more cognisant of the link between web applications and security, and they're seeing the efficiencies IT resources have garnered from softwaredefined systems. Overall, they're grasping that parameter-based security is dying and being replaced by data and user identity strategies. But many have invested in security systems, yet don’t use them properly.

A lot of security’s activity is focused on larger companies that can afford the myriad remedies required today. But there is a gap to serve solutions to smaller businesses.

“For example, a data encryption solution can be deployed anywhere without being too complex or expensive. There’s a long tail in the SME market. But it needs the right skills and prices for that market. That’s a challenge,” says Kruger.

SADC heats up

 All of the above counts for South Africa, but there’s an entire region beyond its borders demanding the same services. SADC businesses want in, says Bradley Pulford, GM, channel and distribution at Dell EMC.

“There are slight nuances, but SADC companies are aligned to the technology point of view. They have different challenges. For example, there's a big emphasis on security. But it’s clear the talk is done, they want to see action.”

Appetites vary between SADC countries. Nonetheless, SADC regions often match and in some areas surpass SA’s businesses. For example, telecommunications players tend to be more progressive and competitive than their local peers.

“Connectivity has stabilised. The telcos have been driving technology adoption as part of their business models. It’s also about the demographics of SADC: there are many mobile users, so servicing a mobile population has driven services as a culture,” adds Pulford.

Rising stars include Namibia, Botswana, Mozambique and Mauritius. But all across SADC, there’s demand, especially for skills.

“Many rely on skills through partners, but some are looking to cultivate more of their own. There’s a lot of assessment around what’s relevant to them and what’s just buzz,” Pulford concludes.

Global tech investment trends

Gartner’s predictions for  2019 show global demand slowing down for most technologies:

DATACENTRE SYSTEMS 2018: 6%      2019: 1.6%

ENTERPRISE SOFTWARE 2018: 9.9%      2019: 8.3%

DEVICES 2018: 3.6%      2019: 2.4%

IT SERVICES 2018: 5.9%          2019: 4.7% 

COMMUNICATIONS SERVICES 2018: 2.4%       2019: 1.2%

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