Before getting started on your 2019 business plans, take a few moments to review our most-read feature stories of the year. Most of these stories focus on emerging IT industry trends that will continue to develop. Others deal with channel partner business issues that will undoubtedly remain challenges.
While research has found broad channel acceptance of the cloud, some reports show cloud services contributing only a small percentage of partners’ overall business. How can partners position their cloud offerings to make money?
Nontraditional primary and secondary storage vendors have been getting the attention of resellers and MSPs. In this feature story, senior site editor John Moore profiles two storage upstarts — Clearsky Data and Reduxio — and how they stand out against their better-known enterprise storage competitors.
The predicted upswing in the device-as-a-service market sparked vendors such as Dell Technologies, Lenovo and HP to launch offerings. Contributor Nicole Lewis provides an overview at this evolving opportunity and how device as a service could affect partners’ current strategies.
Customer organizations are seeing the benefits of migrating their communications technology and collaboration applications to the cloud. Channel partners should weigh several factors when pursuing the relatively untapped unified-communications-as-a-service market.
Emerging IT industry trends have pressured channel partners to transition to new business models. In this feature story, we provide advice for financing channel partner business transitions, evaluating new lines of business, working with vendors and more.
Companies like Accenture and Microsoft partner KenSci Inc. are experimenting with machine learning algorithms and tools. Nicole Lewis’s article explains how the machine learning is primed to transform business and why channel partners should be paying attention.
Partners are developing new strategies in response to SAP’s plans to move its customer base to S/4HANA by 2025. In this feature story by contributor Esther Shein, SAP partners Presence of IT and Symmetry share their views of SAP’s bold S/4HANA vision.
Channel firms have taken unique approaches to find success in the data analytics services space. Esther Shein highlights the strategies of three leading data analytics services providers: Accenture, DXC Technologies and Wipro.
When Amazon Web Services announced its managed services offering in late 2016, industry watchers questioned whether AWS would encroach on MSPs’ traditional territory. As of 2018, managed services providers haven’t seen a negative impact on their businesses.
Alliances between channel firms and RPA software vendors signal a new phase in software robot implementation. In our most-read feature of 2018, John Moore examines RPA adoption trends and channel opportunities surrounding deployments.
Before wrapping up 2018, take a moment to review some of our most-read news stories from the year.
In 2018, we saw the industry’s heavyweight vendors, such as IBM, Microsoft and Dell EMC, doubling-down and refining their partner strategies. Readers kept tabs on IBM amid its companywide reinvention, specifically IBM’s efforts to modernize the IBM partner ecosystem. Microsoft also caught readers’ attention as the vendor ramped up focus on vertical market opportunities. Meanwhile, Dell EMC kicked off the first anniversary of its post-merger partner program by setting a $50 billion channel business goal.
In addition to vendors’ channel moves, readers took note of partner projects involving emerging technology, notably blockchain projects. Accenture’s projects are featured in two of the stories below. In the first, Accenture debuted an international border security system that combines blockchain and biometrics. In the second, we learn about Accenture’s alliance with Walt Disney Studios to apply blockchain, VR and machine learning to film production and entertainment.
Don’t overlook our third most-read news story, which explores why sales and marketing continues to vex managed service providers (MSPs).
Data protection and MSP software vendor Datto saw its customer base grow to more than 13,000 partners in 2018. The vendor said its 2017 merger with Autotask, combined with expansion into international markets, led to the boost.
Launched at Citrix Summit 2018, Citrix Ultimate Rewards integrated the vendor’s channel incentives into one streamlined program. Citrix also revealed new discount and rebate programs at the partner event.
IBM acknowledged that small and medium-sized businesses weren’t all that clear on its pivot to modern infrastructure. As a result, the vendor said 2018 marketing initiatives would seek to better explain the newly transformed IBM.
IBM made news again when it revised the IBM partner strategy. John Teltsch, IBM’s global channel chief, explained the company’s efforts to embrace both traditional IBM partner firms and newer partner types, including ISVs and developers.
At its Inspire 2018 conference, Microsoft continued to tout its strategy for targeting vertical market opportunities. Microsoft also emphasized co-selling as an important approach, encouraging partners to link up with its internal salesforce on deals.
Accenture introduced the Known Traveler Digital Identity system, which uses blockchain and biometrics for international border security. Meanwhile, Synechron used the Ethereum blockchain in a RegTech project for a custodian bank.
Dell EMC said its indirect sales revenue was up 19% in the fourth quarter and 12% for the full fiscal year, an indication that its post-merger channel strategy is working. Q4 results also showed Dell EMC made share gains in the PC market and PowerEdge and cloud servers, but sluggish growth in storage.
Sales and marketing has proven itself a perennial pain point for managed service providers. 2018 was no exception. Research published by Datto found that more than half of the MSPs surveyed cited sales and marketing as a top challenge for their businesses.
Accenture partnered with Walt Disney Studios to explore blockchain, virtual and augmented reality, and machine learning. The initiative will look at how the emerging technology can help reshape entertainment experiences and film production environments.
Following the one-year anniversary of its post-merger partner program, Dell EMC said it aimed to grow its $43 billion channel business to $50 billion. Dell EMC asserted that it needed only to make minor changes to its partner program and resources to hit that target.
With Cisco Partner Summit 2018 in the books, here are some takeaways from the conference that may shed some light on what Cisco’s channel allies can expect over the next few months.
Continuing software focus
Software has been at the forefront of the Cisco strategy for a while and channel partners can expect the software pursuit to continue, if not intensify. At Cisco Partner Summit 2018, Nirav Sheth, vice president of partner solutions, architecture and engineering at Cisco, encouraged partners to add software to their offerings. Professional services offer margins in the 30% range, Sheth said, but partners that build their own software stacks on top of Cisco’s technology platform can expect margins in the 70%-plus range.
“That is why [Cisco partners] should all be thinking about this as an opportunity,” he said.
Revised channel programs
As Cisco and its ecosystem moves to software, subscription-based sales and recurring revenue, the company is revamping its channel programs to reflect those directions. Partners can expect to see program updates over the next few months. The Cisco Services Partner Program, for example, will see a shift from its current focus on performance thresholds to new measurements based on monthly recurring revenue, growth and renewals. The changes to the incentive structure, which will go into effect within 12 to 24 months, will align services incentives with Cisco’s software incentive strategy, according to the company. In the next few months, Cisco will also debut a customer experience specialization, which revolves around software and services. The new specialization will eventually subsume Cisco’s Lifecycle Advisor program.
Simplification was one evident theme at Cisco Partner Summit 2018. It’s a goal perhaps easier to state than accomplish given Cisco’s appetite for acquisitions over the years. Nevertheless, the company appears willing to take on the task as part of the overarching Cisco strategy. Karen Walker, chief marketing officer at Cisco, said the company aims to simplify the “naming of the portfolio,” reducing complexity by 90% as it sifts through a “jumble of names and brands.” The upshot for channel partners is a portfolio that should prove easier to market and sell.
Walker also promised “fewer and bigger moments” when it comes to product launches. She suggested the days in which Cisco conducted 43 launches in 52 weeks will be a thing of the past. Partners can expect to see fewer launches, which may be tied to events such as Cisco Live and Cisco Partner Summit.
With Cisco Partner Summit 2018 in the books, here are some takeaways from the conference that may shed some light on what Cisco’s channel allies can expect over the next few months.
Look for Cisco to continue its multi-cloud strategy. Last year’s summit featured a hybrid-cloud alliance with Google. At this year’s event, company officials discussed the company’s recently unveiled Kubernetes offering for Amazon Web Services (AWS). The Cisco Hybrid Solution for Kubernetes on AWS lets customers deploy containerized apps in Kubernetes clusters spanning in-house data centers and AWS’ cloud platform. David Cope, senior director of market development, CloudCenter, at Cisco, said the company will train about 25 partners with Cisco and AWS experience in the first phase of a channel go-to-market initiative.
A focus on today and tomorrow
Events such as Cisco Partner Summit 2018 are inevitably forward-looking. A key purpose of a channel conference i
s to point partners toward emerging markets and differentiated services. But Cisco executives sought to make it clear that the company will also help partners where they currently stand while also planning for the future.
Oliver Tuszik, senior vice president of Cisco’s global partner organization, called this approach “perform and transform” – a simultaneous focus on managing the daily business and building new opportunities.
“We need the profit of today to invest in an even better future,” he said.
Last week’s IT Nation Connect event, ConnectWise’s annual users conference, held in Orlando, Fla., hit on a few of the core trends that channel partners grapple with today.
Trends included the need for partners to specialize their businesses, an imperative sparked by the commoditization of basic IT services. ConnectWise also called on partners to better align with the as-a-service model — as well as key sales and marketing metrics that executives tend to neglect or ignore. Another trend highlighted at IT Nation Connect 2018 was the need for managed services providers (MSPs) to revamp cybersecurity practices. ConnectWise, for its part, said security will play a large role in its product roadmap going forward.
As the IT services industry matures, MSPs need to differentiate themselves, whether it means specializing in vertical and niche markets or a particular branch of technology such as managed security.
According to ConnectWise, the managed services industry is poised to reach $154.5 billion globally by 2021, representing a 13% compound annual growth rate. The drivers behind the growing demand include customers seeking cost efficiencies, technological innovation, agility and continuous improvement. Additionally, as customers increasingly cope with a scarcity of internal technical resources, they will look to outsource to IT services providers — an opportunity for MSPs with specializations.
“The days of the generalist — I don’t want to say are dead — but all of us are going to find a need to specialize and differentiate ourselves in some way,” said Arnie Bellini, CEO of ConnectWise, during his IT Nation Connect keynote.
As-a-service model proficiency
In the near future, Bellini said, all technology will be delivered and managed as a service. This means channel companies should understand the as-a-service model and develop business strategies accordingly.
Craig Fulton, chief product officer at ConnectWise, said the subscription-based, as-a-service model is essentially “a customer experience” where customers own the relationship. “The sale doesn’t end when they sign that quote; the sale begins then,” he said.
He emphasized a handful of metrics that subscription-based services providers should pay close attention to: churn, retention, customer acquisition costs and customer lifetime value.
ConnectWise’s cybersecurity posture
Fulton said ConnectWise has focused on aligning its platform with the National Institute of Standards and Technology (NIST) Cybersecurity Framework. He noted that ConnectWise had an audit done against the NIST Cybersecurity Framework and identified areas of success and improvement.
Security, because of its constantly shifting landscape, represents a top challenge for ConnectWise going forward. “We are aligning our roadmaps to adhere the products to the NIST Cybersecurity Framework, and so there will be challenges there in getting that work completed and educating our partners on how to use the system to adhere to that,” Fulton told us in an interview.
He added that ConnectWise remains committed to its vision for a connected ecosystem, showcased at the IT Nation 2017 conference. “It is such a priority, we have created a business unit within the company that is focused on that,” he said.
UiPath partner companies will soon be able to apply for funding from a $20 million investment pool the robotic process automation software vendor has established.
The company, based in New York, aims to accelerate RPA and AI adoption as it invests in its partners with an eye toward 2019. The investment dollars will be available from two funds: the UiPath Venture Innovation Fund and the UiPath Partner Acceleration Fund. The venture innovation fund will invest in AI-focused partners that have expertise in machine learning, business process management, process mining and intelligence, according to the company. Chatbot companies and startups that have committed to making integration with UiPath faster and easier also fall within the fund’s scope.
The partner acceleration fund, meanwhile, targets global UiPath partner firms that support automation and AI across go-to-market and enablement activities, and accelerate enterprise RPA adoption, the company said.
Partnering in the ‘automation-first’ era
The investment program was revealed Thursday at the UiPath Forward conference in Miami. The funding coincides with what Daniel Dines, co-founder and CEO at UiPath, called the “automation-first” era, a trend he said ranks in importance with other watershed technology developments from the birth of the mainframe to cloud and mobile computing.
“My feeling is we are again at the dawn of the new, big change in technology,” Dines said. “This new era is the automation-first era”
Dines described automation-first as the confluence of computer vision technology, the maturation of AI and business process optimization.
Partner support at UiPath Forward
“To me this is an investor fund,” said conference attendee Clinton Coker, principal at Machina, a UiPath partner based in Houston. “We are going to go back and look at how we can put our best foot forward to demonstrate to UiPath we have some opportunities to not just move the needle. We want to blow the odometer up.”
Machina is not ready to detail the offering it will submit as an investment candidate — a process that is expected to kick off in November. But Coker suggested his company might approach UiPath with a bundle of products and services for the energy industry, Machina’s vertical market focus.
UiPath’s investment funds, in general, demonstrate the companys’ interest in supporting UiPath partner firms as well as its customers.
“We’re in this game together,” Coker said.
The UiPath Forward conference drew more than 1,500 customers and partners. Last year’s inaugural event had about 500 attendees, according to UiPath officials.
Drive Shack Inc., a virtual reality golf business, puts a new twist on a greenfield deployment.
Starting from scratch, the company sought an IT infrastructure capable of supporting a 60,000-square-foot facility in Orlando, Fla. The complex needed everything from gaming platforms to servers and security. The concept is to let golfers virtually play courses from around the world.
Ravi Nekkalapu, CIO and head of IT at Drive Shack, reached out to Trace3 Inc., an IT solutions provider based in Irvine, Calif. Nekkalapu had a previous relationship with Trace 3 when he was senior director, enterprise architecture and cloud strategy, at Wyndham Worldwide. In the new arrangement, Trace 3 was tasked with devising the technology underpinning Drive Shack’s flagship facility.
“Trace3’s approach was to review the customer’s overall goals, designs, and requirements for this new venture,” said Tim Benner, vice president of architecture and strategy at Trace3.
Cisco’s role in virtual reality golf
As a result of Trace3’s technology review and proof of concept initiatives, Cisco and the vendor’s StadiumVision (now Cisco Vision for Sports and Entertainment) was deemed the best fit. Cisco Vision for Sports and Entertainment centrally manages the distribution of video and digital content to high-definition or ultra-high-definition displays installed throughout a given venue.
Benner said the Cisco offering provided “the best of breed and bleeding-edge capabilities at the infrastructure level we were looking for.”
Cisco-provided infrastructure includes Unified Computing System servers for client compute, video servers and hardware, Catalyst switches, Cisco routers, Meraki MX and Cisco Firepower Threat Defense security appliances, and wireless technology from Meraki.
Having a single vendor responsible for those infrastructure elements provided a simplified “one-throat-to-choke” support mechanism, Benner said.
Other infrastructure elements
Cisco, however, contributed one of many pieces of the Drive Shack technology ecosystem. Other infrastructure components include golf ball dispensers, Android tablets, security cameras and systems, cameras that track ball and player movements, and StorMagic’s virtual storage-area network products.
Software for providing client compute, Benner said, is based on VMware for virtualization and Microsoft Windows Server and Windows 10 for delivering the gaming platform as well as infrastructure services for administration and authorization of the gaming platforms.
As for deployment, Cisco provided in-depth implementation of its StadiumVision infrastructure platform, while Trace3 implemented the other infrastructure components for virtual reality golf.
Benner said the key to this project — and realizing the Drive Shack vision — was the “concept of team ownership of every system, from infrastructure to gaming platforms and development.”
With its infrastructure in place, Drive Shack’s Orlando facility opened in April 2018. Other Drive Shack virtual reality golf centers are on the horizon. Trace3 is working on the next facilities scheduled to launch, including centers in Raleigh, N.C., Richmond, Va. and West Palm Beach, Fla.
To support the current and planned Drive Shack golf complexes, Trace3 manages a technology-testing lab in White Plains, N.Y. Benner said plans are in the works to open a larger lab, capable of mimicking “the full stage and platform” of a Drive Shack facility.
Hurricane Florence made landfall Friday morning in North Carolina, but data centers will continue to operate, including the Ensono data center in Kings Mountain.
Kings Mountain, in the Charlotte metro area, is well inland, but the region is still expected to see high winds, more than 10 inches of rain and the potential for tornadoes. Hurricane Florence was classed as a Category 1 hurricane as of Friday morning.
Power outages are the key threat to IT equipment, and already more than 400,000 homes and businesses are without electricity in the Carolinas. Jim Kozlowski, vice president of global data center operations at Ensono, said the company’s mission-critical data center’s electrical systems, cooling systems and backup diesel generators operate with many layers of redundancy. Ensono is a managed services and cloud services provider.
“The center is designed to operate continuously even without public utility power into the site,” he said. “The backup generators have fuel storage onsite and additional fuel deliveries on standby to provide continuous operation throughout the storm and any potential utility power loss.”
In the area of power generation, the Ensono data center in Kings Mountain has multiple backup diesel generators. The generators supporting the Ensono data center are designed and have been maintained to withstand the rain and wind associated with the storm.
Kozlowski said Ensono has tested all of the data center’s systems, noting the center’s maintenance is up-to-date to ensure backup systems are able to function as planned. The company has informed customers of the steps it has taken and continuously updates them based on weather service and utility company information.
IT services firms in areas prone to natural disasters develop emergency preparedness plans to help customers deal with the immediate crisis and its aftermath. In 2017, during a particularly busy hurricane season, SearchITChannel wrote about how one Florida MSP supported its customers through Hurricane Irma.
Accenture last week scooped up two companies to solidify the product innovation component of its Industry X.0 practice, which aims to help clients develop smart connected products and services.
The IT consulting firm acquired Mindtribe, a hardware engineering firm based in San Francisco. Mindtribe uses Agile techniques to create connected hardware that integrates with digital services. Accenture also entered into an agreement to purchase Pillar Technology, a Columbus, Ohio, smart embedded software company. Pillar Technology develops embedded software used in smart connected products such as autonomous vehicles, according to Accenture.
Smart connected products embed software, sensors, RFID tags, microprocessors and other smart elements. Those components, coupled with wireless and other connectivity options, let the products connect to the user, manufacturer or other products. The internet of things may serve as the communications backbone for smart connected products. Continued »
A global study of the SMB business segment suggests MSPs should be investing in cybersecurity expertise and services.
Published last week by IT management software firm Kaseya, the study polled more than 1,200 IT professionals at companies with 5,000 employees or less. Among the study’s findings was that one in three SMBs suffered a data breach in the last five years, with about one in 10 experiencing a breach in the last 12 months. Fifty-four percent of respondents cited strengthening IT security as a top priority for 2018 – a 14% increase compared with Kaseya’s 2017 survey of SMB IT operations.
“One of the areas that we see a huge amount of opportunity [for MSPs] is that the market is underserved in terms of security, awareness and protection. Security is multilayered. It’s everything from endpoint security to user security to even network monitoring, because breaches are becoming more and more common in the SMB world,” said Frank Tisellano, vice president of product management and design at Kaseya.
Fifty-eight percent of SMB business respondents said enhancing security will be the No. 1 IT priority for 2019, overshadowing other SMB technology objectives, according to the study. Thirty-one percent of respondents cited reducing IT costs as a top priority, while 28% pointed to regulatory compliance.
The Kaseya study also showed that of the SMBs that had a data breach in the past 12 months, 45% experienced two to four outages of five minutes or more. SMBs, however, are tackling outages with backup and disaster recovery strategies, Kaseya said. Ninety percent of SMB IT professionals said they back up their servers. Sixty-nine percent back up servers both locally and onsite. Additionally, about 40% of respondents said they use automated disaster recovery and have a formalized business continuity and disaster recovery plan. Respondents on average use four backup and recovery products.
Disaster recovery and security go hand in hand, Tisellano said, because they both focus on managing risks. He added that the SMB business segment is looking to invest more in these areas, especially as IT becomes increasingly more central to their businesses. “The risks that you are looking to mitigate with [security] tools and with backup is getting higher, and so businesses are willing, and frankly starting to be required, to keep their businesses safe in new and comprehensive ways,” he said.
Tisellano noted that Kaseya has been busily investing in its security and disaster recovery software capabilities. Recent examples include the vendor’s merger with Unitrends, a disaster recovery company, in May. “We are going to continue to make huge investments” in security and disaster recovery, he said.
If you attended the recent DattoCon 2018 event, it’s dollars to donuts you heard about near-term opportunities in the small and medium business (SMB) market.
Managed service providers (MSPs), however, also got a peek of what might transpire a bit further down the road. Ian McChord, vice president of product management at Datto Inc., outlined five potential directions for MSPs attending the data protection and MSP business management software vendor’s annual partner conference:
- Proactive management
Currently, customer pain — a server failure, for example — is typically what spurs an IT services provider into action. McChord suggested analytics and improved diagnostic data will shift the MSPs’ focus from reactive to proactive management. He said diagnostic capabilities, as part of an MSP’s toolset, are still in their infancy. But those features will have plenty of data to explore once they mature: McChord said remote monitoring and management tools already collect large amounts of data, but most of it remains untapped. Eventually, MSPs will be able to measure how many customer issues they manage proactively by determining the percentage of tickets generated through automated means versus end users.
- SaaS application management
McChord pointed to increasing use of SaaS among businesses as a form of shadow IT and a potential regulatory compliance issue. He pointed to the example of a hypothetical company that loads customer data into a newly purchased SaaS-based automated marketing tool, but lacks any sort of governance plan. “There is no backup strategy, no administration strategy and nobody is looking at who has access to customer data,” he said. For an MSP, the current situation will open future opportunities to provide SaaS application management, which he believes will be bundled into what some MSPs offer today as virtual CIO, or vCIO services. SaaS application management could also fall under the umbrella of a cloud governance service.
- User-centric backup
At DattoCon 2018, McChord said he expects to see a data protection paradigm shift as the current emphasis on backing up individual technology components gives way to “backup by user, not infrastructure.” The conventional thinking on protecting data on a laptop or other endpoint device ignores the reality that an employee’s data could just as easily exist in a SaaS application. The trend, McChord suggested, will be toward backing up a user’s data — wherever it lives.
- Home office IT
The growing ranks of employees who work full-time or part-time from home may also spark MSP opportunities. McChord called working from home the “Wild West of IT,” noting that companies’ work-from-home policies have little to do with IT policy. He said home-based employees may lack a standard set of IT tools and miss the mark when it comes to adequate home office security. MSPs have a chance to create a home-office package for businesses that don’t have the time to think about what a remote employee’s desk should look like, how it should be linked into the corporate network and how to provide security around it.
- Physical access control
Many MSPs attending DattoCon 2018 are likely to be already involved in providing customers some level of digital security. But physical security may not appear on the list of services. McChord believes digital and physical security should be linked in some way, noting that access to customers’ offices may be less secure than access to their mobile devices.