There is the affect of social media, of course, although that is the subject for another rant.
To me, the most profound impact is this: enterprise users have increasingly limited patience for applications that are complicated and bloated with unnecessary features. They are becoming what a number of people way smarter than me are calling “bizumers.” A long-time contact and colleague of mine, former Scient and Mercury Interactive marketing guru Christopher Lochhead of Play Bigger Advisors, wrote a great essay describing the bizumer for Fortune last fall.
There are three big reasons that technology solution providers should be paying attention to this trend:
The world of business software is changing rapidly, thanks in large part to the promise of software as a service, which offers a way for companies to transform some of their technology investments into an operational expense. But don’t overlook the human motivators for this interest as you consider which applications to recommend.
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Of particular interest to managed service providers should be the fact that the managed portion of the security services pie is slated to almost double during that timeframe — from $8 billion to $14.9 billion by 2015. That $14.9 billion is part of an overall projected spending pie of $49.1 billion across the entire security services market by 2015, according to the Gartner report (“Forecast: Security Service Market, Worldwide, 2011″).
Gartner research director Lawrence Pingree said:
“[The uptick in managed security services] is largest driven by organizations looking at managed security services (MSS) providers as a way to maximize resources and lower ongoing operationg expenditures on security. Demand in the small and midsize business segments is also high as businesses continue looking to external parties to provide them with additional security expertise and resources that they may be lacking organizationally to help them make the right security decisions or provide security functions externally.”
North America was listed as the biggest market for security services spending. Revenue is expected to top $14.6 billion in 2012, growing to $19 billion by 2015. Those figures are for the overall security services marketing, which includes consulting, development and integration, management, software support, and hardware maintenance and support.
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The templates, which were developed in conjunction by the CompTIA Managed IT Services Executive Forum and the Institute for Partner Education & Development, are focused on:
You can find the templates in the Member Resource Center.
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So, you may already know that the vendors in this area call this stuff Managed Print Services (or MPS), not to be confused with Managed Service Provers (or MSPs). Yes, I know, it bothers me too, which is while I’ll actually avoid using acronyms for most of this particular blog entry.
I’ve actually spoken already with two of the major printer vendors about their thoughts around this subject. This entry isn’t meant to be any kind of comparative view about their respective programs, I will just relate a couple of their core foci. (Wow, I actually got to use that word in context!) And, a disclosure: I have done some white paper work recently for one of the vendors that I am about to mention, OKI Data.
Dena Bernard, director of customers satisfaction and services for OKI Data, views MPS as an opportunity for printer resellers to build a more trusted relationship with their customers even as margins from straight product resales continue to decline. Businesses of all sizes are scrutinizing every facet of their IT infrastructure and managing printer lifecycles, as well as the consumables related to use them, has become a higher priority. There are several reasons for this, Bernard says, including the need for companies to minimize their capital budgets, regulatory compliance considerations, and even corporate sustainability/green IT initiatives.
“Printing costs are not well understood,” Bernard says. “Many companies are undergoing downsizing and they are seeking to minimize costs. Being able to help them understand their printing cost and helping them control them in a way that matches their printer needs. This is a valuable skill set.”
Realistically speaking, any reseller that continues to base their printer business solely on earning hardware margins will find business tougher over the next three years as fewer businesses buy printers outright and more seek to establish a leasing or managed service relationship. One analyst firm, The Photizo Group, believes the growth rate for these services will be 25 percent into 2010. Growth for straight business printer sales, on the other hand, will be flat at roughly 6 percent.
OKI Data isn’t naive enough to think that a solution provider will be able to just drop all its other business practices in order to get focused on managed print services. It is, in effect, hedging its bets by creating a wide range of special printer technology, managed support services and programs that allow many different elements of the channel to become involved. These services all sit under an umbrella program called Total Managed Print and include everything from a starter program that pays the VAR an agent fee up to special equipment designed for members of the channel that are staking their entire business on these services and solutions.
“This is a program for the channel built by the channel,” Bernard says. “It lets the partner plug in at their level of capability.”
Xerox has been developing its U.S. managed print program for the past three years (it started in Europe about five years ago), according to Tom Gall, director of value channel marketing, who represents the Xerox PagePack initiative.
The rallying cry for Xerox is helping IT solution providers talk about printing in terms of the cost per page. The challenge in establishing manage print services within accounts is the relatively long product lifecycle for printers: It is rare that a company will switch out more than one-third of its printers in any given year, says Gall. That said, that sort of behavior just begs for a managed services approach, under which customers can have better visibility into where their true costs lie, he says.
Both Xerox and OKI Data believe that providing the services and infrastructure so that their partners can manage heterogeneous printer technology (instead of just their own devices will be critical). Equally as important: Both vendors believe that the partners who will be successful with managed print initiatives are those who dedicate human resources to this challenge: a managed print champion, if you will.
I’ll leave you with this video about PagePack from Xerox and a couple of its channel partners.]]>
The company’s 2009 SMB Disaster Preparedness Survey included roughly 1,560 responses from 28 different countries. A full 82 percent of the SMBs said they were satisfied with their disaster recovery plans. At the sime time, however, the average respondent reported at least three outages in the past 12 months. What’s more, only 23 percent back up their data. Even those businesses aren’t backing up their COMPLETE data set, since most of the SMBs that ARE backing their data are backing up only about 60 percent of what they have.
Here’s the complete press release about the survey. And here’s a presentation that details the results specifically for the North American market.
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Now that Microsoft’s made its hosted online services broadly available, it’s time for VARs to take stock of what this new software delivery vehicle means to them.
Google, Salesforce.com, other vendors have driven this Sofware as a Service train for some time, but Microsoft, unlike those SaaS powers, built its business with partners so those partners can no longer ignore the shift, even if they are so inclined. The smart ones will figure out how to parlay the delivery model for their own gain. The others risk a lot by letting it pass them by.
For those VARs who continue to rely heavily on shrink-wrap software (is there such a thing anymore?) sales, SaaS is a threat. But in reality, very few VARs do a lot of that anymore. Most still welcome margin on product/license sales—it’s gravy that many would prefer to keep. But the bulk of their money is made on services and customization. And one thing SaaS or cloud-based services, need is customization and additional services.
Sanjeev Aggarwal, analyst at Judith Hurwitz & Associates, sees this move to software services as disruptive but in a good way. Sure, Microsoft, Google and Amazon are hosting services, but the trick in providing real value is local coverage and vertical expertise. That is especially true in the hundreds of thousands of small businesses—those with ten employees or less. They need all the security and flexibility software can provide but don’t typically have any IT professionals of their own to build out or support those capabilities and features.
Such small businesses really do need “middle men” to put those cloud-based services together and to work for customers. Maybe even to brand them for the businesses themselves, making them customer-facing e-commerce sites for example. Smart VARs will take vendor-hosted services and make them applicable to their own customers. Aggarwal doesn’t see many customers putting their data center capabilities totally in the hands of a VAR, but he does see them trying out services hosted by Amazon or others with VARs adding value.
In that way, the all-important customer relationship can be preserved. Because the real angst created by these vendor-hosted services is the fear that the vendors will try to wrest the customer relationship from the solution provider, and that is something no solution provider can afford.
With all of that moving and shaking, open source advocates are bound to worry about the fate of their database darling, but face it, after an acquisition of this nature, most of the execs who engineered it will be in the wind within 18 months. Still, it doesn’t look good and the fact that Widenius was apparently disdainful of Sun’s efforts to update the database over the past year and said the latest 5.1 release was released before it’s time.
Also worrisome to Sun partners — both developers and others — is the notion that Sun CEO Jonathan Schwartz is driving out great talent. They point to the departure in November of Rich Green the well-regarded ex-Sun exec who had returned earlier to run Sun’s software efforts.]]>
How many of you out there reading this column are concerned about your accounts receivable and the fact that a lot of your customers (including the government ones, for heaven’s sake) are trying to hold out on payment for as long as they can? When someone keeps their wallet closed, it creates a tremendous ripple effect that flows right across the entire distribution channel.
So, to say that I am scrutinizing the press release mill carefully for signs that a vendor understands this, and that they might actually be doing something about it, is a vast understatement.
I would be remiss, therefore, if I didn’t point TechTarget channel readers to a couple of new zero-point financing promotions that were introduced last week by Hewlett-Packard, both of which are focused on small businesses, the sweet spot of many resellers’ clientele.
One of the plans involves outright purchases over a 12-month period; the other is a leasing program over 36 months. Both allow customers in the United States to finance between $1,500 and $150,000 of HP products (there ARE definitely restrictions); if you’re representing a customer in Canada, they can finance $5,000 (Canadian) to $150,000 (Canadian). The offers are available through April 30, 2009.
The details for the promotions can be found at this link.
HP is lucky, I suppose, in that it has its own financing and leasing arm and can therefore do things like this pretty quickly. But I think every vendor and distributor needs to dig deep right now and figure out how to help encourage spending when many companies are afraid to pull out their check book. Kudos to Avnet, as an example, for taking action last year. Here’s an article detailing what it has been doing.
E-mail me with other cool programs that we can share across the channel.
Heather Clancy is an award-winning business journalist and strategic communications consultant with more than 20 years experience covering the high-tech channel.]]>
The 14-second video features Dave Girouard, Google Enterprise president, and 10 Google employees standing behind him. Girouard says, “On behalf of the Google Apps reseller team, I want to say thank you for taking the time to learn about this exciting new program.”
The employees then yell, “Go Apps resellers!”
Google Apps Education Edition, which offers email, word processing, instant messaging and other programs for college students and faculty, is already gaining some traction in the channel. But there’s also concern that Google’s focus on Web-based applications could take away on-premise sales opportunities for solutions providers. Maybe this “Google Apps reseller team” will help address those issues.
UPDATE (7:04 p.m. Eastern): The owner of the video has removed it from YouTube.]]>
According to the latest CDW IT Monitor, confidence among IT decision makers dropped to its lowest level of the year in December. The overall IT monitor index score was 70, down two points, while confidence among large corporate and government accounts was off five points to 74.
On the very positive side, however, 84 percent of large and 77 percent of midsize businesses still expect to spend on new hardware sometime in the next six months and their buying intentions on the software side are even slightly higher. The challenge is that at least 20 percent of the CDW survey respondents, who are polled on a bimonthly basis, said they anticipate cuts to their budgets. So, it will be up to IT solution providers to create budgets by either saving money elsewhere or appealing outside the IT department for investments. Applications delivered as a service, for example, might be something that a business unit leader could sanction separately.
Another positive indicator, although I hate describing it as such because is means people are losing their jobs, is that businesses of all sizes intend to reduce their IT staffing levels. Approximately 16 percent of larger companies responding to the December poll said they will cut positions in the next six months; this compares with only 7 percent of companies that said the same thing in October. But it sure suggests that an IT services firm might have the opportunity to pick up the slack.
This jibes with the comments of several solution providers that I’ve spoken with over the past week, who hailed from Indiana, Florida and New Jersey. My contact in Florida said his team needs to fight for every bit of business right now, although it IS still coming in, while the solution providers from Indiana and New Jersey both are booked at least a quarter into the new year.
Who knows: maybe their customers were just spending the rest of their 2008 tech budgets before settling in for a long winter’s nap. One real danger I see is the credit environment, which could keep some VARs from transacting legitimate sales, but the creative will find ways to work around this. Anyway, I think that the spending paralysis that we keep hearing about may be a figment of at least some people’s imaginations. At least, here’s hoping.
Heather Clancy is a journalist and blogger about high-tech channel issues, as well as a strategic communications consultant for SWOT Management Group. Tell her your story or suggest blog topics by e-mailing email@example.com.]]>