Here are several observations from MSPAlliance’s MSPWorld 2019 conference, which wraps up today in Las Vegas.
1. The industry wants to reframe the MSPs-as-target discussion
MSPAlliance leadership is aiming to turn the negative publicity surrounding managed service provider security incidents into an opportunity for proactive MSPs to differentiate themselves from cybersecurity laggards. Watch for more developments here as MSPAlliance works toward an early-warning capability that could help MSP community members keep each other posted on cyberattacks and vulnerabilities within tools such as remote monitoring and management (RMM) software.
2. MSPs aren’t thrilled with integrated tool suites
Major MSP platform vendors, backed by a handful of private equity companies, have been creating integrated tool suites spanning RMM, professional services automation, backup and security. But service provider executives speaking at MSPWorld 2019 aren’t sold on the approach. “We are clearly best of breed,” said Karl Springer, president of Sagiss, an MSP in the Dallas/Fort Worth area. “You show me your product is the best product out there, and we are going to incorporate it into our toolset.” Sagiss uses the core products of ConnectWise and Kaseya.
“We are going to look for the best solution,” noted John Burgess, president of Mainstream Technologies, an MSP based in Little Rock, Ark. He said Mainstream can create custom integrations to make a product work within its toolset.
Robin Chow, president and founder of XBASE Technologies Corp., an MSP based in Toronto, also voiced a preference for best-of-breed products, citing security as a factor among other considerations. He questioned whether vendors fully examine the security of newly acquired tools as they expand their MSP portfolios.
“They buy it, and they want to bolt it on and bring it to market as quickly as possible,” Chow said. “I’m not sure it’s vetted out.”
3. When it comes to pricing, MSPs can have it both ways
‘All you can eat’ has been a popular pricing model among MSPs. But without rigorous scoping, customers can take advantage of the approach — requesting home visits to set up networks, for example. In addition, some customers require more support if they have numerous on-premises applications or dodgy servers that require frequent repairs.
Springer recommends a hybrid model, which his company has been using for several years. In this approach, the MSP charges a flat per-device/per-month fee for proactive services such as monitoring and backup. Other services are billed on a time-and-materials basis. The latter category could include project work or a workstation setup for a new user. Springer said customers purchase blocks of time that they can apply toward services beyond the scope of the monthly subscription fee.
4. Blackouts have some MSPs worried
Some West Coast service providers at MSPWorld 2019 pointed to intentional blackouts in California as a concern, citing the potential for multiple disaster recovery events. The blackouts have been put into effect to reduce fire risk.
5. MSPs continue to be acquisition targets
During a panel discussion on mergers and acquisitions, the audience was asked whether they had received email inquiries regarding selling their companies. Nearly every hand went up. Panelists were in agreement that consolidation will continue and could even accelerate.
Evoke Technologies, an IT services provider, has been using Bonitasoft’s digital process automation tool and getting results for clients in manufacturing and life sciences.
Evoke, based in Dayton, Ohio, focuses on areas including cloud computing, big data analytics and business process management (BPM). The latter field is where Evoke is getting a lift from Bonitasoft’s DPA technology. DPA offerings aim to automate an organization’s digital processes. It crosses paths with both BPM and robotic process automation (RPA).
Low-code DPA tools offer a quick path to automation, enabling BPM initiatives or, some industry observers would say, evolving BPM into an approach that meets the fast-paced demands of digital transformation.
Older BPM technology has acquired a reputation of being too complicated for business users to readily grasp. Evoke has come across such cases and helped turn around a deployment at Hyster-Yale, a lift truck manufacturer based in Portland, Ore.
“They had in place a legacy BPM platform that was extremely complex and extremely expensive to maintain and support,” said Adam Korzeniowski, vice president of sales at Evoke. “They were coming up to the end of license with that BPM vendor and started exploring opportunities to replace the BPM system with something more lightweight.”
A consulting firm recommended Bonitasoft to Hyster-Yale and the company moved forward with the implementation. The project encountered difficulties, however, and Bonitasoft introduced Evoke, one of its channel partners, to Hyster-Yale, Korzeniowski noted.
Evoke’s initial project was around change order management. When a Hyster-Yale customer or internal engineer requests a deviation of a standard part — a new type of switch for an actuator, for example — a complex process of reviews and approvals follows. The documentation department, for example, must update the technical drawing of the altered component. The finance department has to make sure how the change will affect the overall cost of the product. The customer service team must check on inventory levels.
Evoke used Bonitasoft’s digital process automation offering to automate the change order management process. The project took five months of development, Korzeniowski said, noting the customer believes the development process on Bonita software is 10 times faster compared with traditional methods. He also noted licensing cost savings in the transition from the previous BPM platform to BonitaSoft.
Change order management is a complex but low-volume process. Korzeniowski said Hyster-Yale handles 600 to 700 change requests globally per month. That contrasts with the repetitive, high-volume use cases traditionally associated with RPA. DPA may be viewed as taking on lower-volume, higher-complexity end-to-end processes, including those involving human interaction. Some RPA adopters, however, are taking on more complex processes.
Evoke completed the change order management assignment in October 2018 and moved on to a second project involving Hyster-Yale’s excess and obsolete inventory management process, which concluded in March 2019. A third project at the manufacturer is underway and scheduled for completion in December 2019.
Pharma takes on digital process automation
A pharmaceutical customer, meanwhile, tapped Evoke for a series of BPM projects in which it also used the Bonitasoft DPA offering. The customer’s in-vitro studies, which involve numerous handoffs among scientists, chemists and analysts, had been coordinated through email and Excel spreadsheets. Automating those exchanges saved the pharmaceutical company about 11,000 workers hours, Korzeniowski said. Evoke also helped automate the customer’s in-vivo clinical trial process.
Laboratory asset management was another task for Evoke. The pharmaceutical client must keep tabs on multi-million-dollar gear such as centrifuges and mass spectrometers. Evoke used Bonitasoft to automate the process of tracking equipment as it moves from lab to lab or into warehouses for storage if a lab is being renovated. The tracking also extends to equipment donated to academic researchers or sent back to the manufacturer as a trade-in for new gear.
Evoke’s BPM projects point to digital process automation as another component of the digital transformation toolbox and one partners may well consider, alongside RPA, as they pursue projects.
One Identity, a cybersecurity business unit under Quest Software, revealed that channel partners are driving a dominant portion of its sales.
One Identity, which focuses on identity and access management (IAM), said 68% of its global sales are now linked to partners, marking a 54% increase in year-over-year North American partner sales and at least a 10% increase year-over-year in global channel sales. One Identity’s expanded focus on partner sales continues a shift started in 2016, when the business unit laid the groundwork for a renewed go-to-market strategy. The strategy aimed to transition from direct sales to focus more heavily on One Identity partners.
“[Sixty-eight percent is] a big deal. If I went back a couple of years, that would not have been that high a percentage. It continues to grow,” said Roger Moffat, director of channel and alliances, North America, at One Identity, based in Aliso Viejo, Calif.
Expanding roster of One Identity partners
One Identity Partner Circle, the business unit’s channel program, was launched in May 2017 to target systems integrators, value-added resellers (VARs) and technology alliances. Moffat said One Identity is also recruiting managed service providers — a growing segment of its partner ecosystem. One Identity’s program connects to Quest Software’s Partner Circle Program and has a 24.5% overlap in its global partner base.
“The [IAM] market is sometimes a very specialized market that a lot of times requires a very specialized partner. … What we are finding is that different partners see us as [providing] solutions for their customers in different ways. We have a product line where we seem to hit on a lot of different partners,” Moffat said.
A little more than 1,000 One Identity partners have closed deals in the last 12 months, with partner-originated opportunities growing from 5% to more than 20%, according to One Identity. Over the past 18 months, the business unit increased its roster of active partners by 395 new firms. About 58% of those partners are based in the EMEA, 17% in Latin America, 14% in Asia-Pacific and 11% in North America.
One Identity Partner Circle updates
Moffat said updates to the Partner Circle program over the last 12 months have helped usher in some of One Identity’s channel growth. The program introduced a two-tiered structure for VARs and ratcheted up market development funds, partner rebates and deal registration discounts. Additional rollouts included a revised partner portal, pre-sales boot camps providing technical training and a partner advisory board.
One Identity said it also hired new solution architects, global systems integrator and alliance account leads, and partner enablement specialists. “One of the hallmarks of the program is making sure that partners have access to people,” Moffat said.
Moffat added that he plans to “continue to focus around having a two-way dialogue between our business and partners and make sure [it] remains a core component of what we do.”
Argos Labs, a robotic process automation vendor based in San Jose, Calif., offers a different take on RPA software that the company believes will appeal to value-added resellers and systems integrators.
Founded in 2016, Argos Labs provides a low-code approach to RPA and its goal is to become a completely no-code tool. The company’s Argos RPA+ platform includes an SDK for building automation plug-in modules with Python, a bot management dashboard and, most recently, an RPA marketplace that launched Sept. 1.
Shige Sato, CEO and one of the three founders of Argos Labs, said his company’s RPA software platform is “a little bit different from the big guys.”
The big three vendors in the RPA market are Automation Anywhere, Blue Prism and UiPath.
Transferring bot maintenance
Argos Labs’ effort to minimize coding lets customers manage and maintain bots in house, according to Sato. The company’s current Python plugin approach is low-code, he said, noting the logic part of Python is hidden in the plug-in module. Python arguments, meanwhile, are transformed into a UI, which asks the bot-builder to set parameters using tools such as pull-down menus.
Low-code is an important consideration at a time when some industry executives point to escalating RPA costs. Sato said the cost of post-development bot upkeep is an issue for customers of other RPA software tools and an obstacle for ROI.
“We hear a lot of RPA projects are suffering from this ROI viewpoint and that is because they keep paying for professional services, consultation and maintenance,” Sato said.
Argos Lab’s RPA approach benefits partners as well as end customers. This may seem counterintuitive given that VARs and integrators provide professional services. But while the never-ending RPA project seems like a service provider’s dream, Sato suggests partners would rather step away from day-to-day bot maintenance.
Instead, service providers would like to handle an initial bot implementation and then turn over additional bot building and ongoing maintenance to the customer’s end users. “They want to focus on digital transformation — inclusive of AI and machine learning,” Sato explained. “They don’t want to be stuck with RPA maintenance.”
Argos Labs’ message apparently connected with HCL, a large integrator based in India. Sato said HCL recently signed up for Argos’ RPA platform.
Service providers can also take advantage of Argos Labs’ recently opened marketplace and create their own private repositories. The marketplace offers plug-ins that customers can download to build bots, which can run on Windows, Android, Linux and iOS devices.
Sato used the analogies of a garage sale and a farmers’ market to describe how Argos Labs’ marketplace differs from other RPA vendors. RPA marketplaces typically function as garage sales, providing finished goods in the form of readymade bots that customer can deploy, he noted. The Argos Labs farmers’ market approach offers unfinished goods — modules customers use to create bots.
VARs and integrators can employ the company’s tools to build plug-ins to sell in the marketplace. They can also create private repositories through Argos Labs’ RPA software platform. When service providers pursue a private repository, Argos Labs contributes a set of bot-building blocks exclusive to partners, Sato said. Those building blocks are in addition to the 40 or so blocks generally available. Partners can sell the plug-ins they create in their private repositories.
Those repositories offer partners better control over pricing, Sato noted. “We don’t care how much they charge for their plug-ins,” he said.
Thus far, Argos Labs’ public marketplace offers less than 50 plug-ins from fewer than 20 builders. The latter group includes both partners and builders within Argos Labs. But the company plans to attract Python programmers to boost the bot population.
“We are now trying to promote the SDK to the Python community,” he said.
Robotic process automation software is a stop-gap measure for a business’ integration problems and serves as a bridge to digital transformation but falls short of being transformational on its own.
That’s the view of Francis Carden, vice president of digital automation and robotics at Pegasystems Inc., a Cambridge, Mass., company in the digital process automation (DPA) space. Carden’s view runs counter to organizations that have made RPA the cornerstone of their digital transformation efforts. For example, CGS, a business process outsourcing provider based in New York, views RPA as a key vehicle for digital transformation. R.R. Donnelley & Sons Co., a Chicago-based communications company, is pursuing RPA as part of its digital revolution initiative. Numerous other enterprises have embarked on a similar path with robotic process automation software.
Carden, however, believes RPA is bumping into limitations as adopters attempt to scale initial deployments. Among those are cost and ROI. Some organizations are initially attracted to RPA as a simple and inexpensive way to integrate systems. But as bots proliferate, the need to manage them grows. An enterprise might create an RPA center of excellence and institute other governance mechanisms to keep initiatives on track. But adding those elements requires investment.
“The problem you then have is your costs go up,” Carden said. “They [RPA adopters] get lulled into a false sense of security that it is cheap.”
More effort than expected
A Pegasystems’ survey of decision makers using RPA, published Sept. 10, found organizations “spending more time and effort getting bots up and running than anticipated.” Half of the 509 survey respondents said software bots were harder to deploy than expected and 41% of those polled said bot management was taking more time and resources than expected.
RPA’s return on investment, meanwhile, may fail to justify the cost, Carden suggested. For some projects, a complete overhaul of a business process would make more economic sense than RPA, he said.
“There is a cross-over point that varies,” he said or RPA efforts. “If the ROI is significant, then go for it. If it’s small, then for the upfront dev cost, ongoing maintenance [and] governance … looking at a re-engineered process becomes more viable. It’s not a one size fits all, but if the cost of tactical RPA gets closer to digital transformation, who wouldn’t want to transform?”
And then there’s the issue of a software bot’s lifespan. Changes to an organization’s underlying enterprise architecture will likely result in an increase in software bot breakage, the Pegasystems survey noted. Eight-seven percent of the survey respondents reported some level of bot failure, although most of those reporting breakage described the problem as small to moderate in scope. Organizations, on average, believe bots will last about three years, according to the survey.
Carden said the breakage will accelerate. He believes RPA’s fragility stems, in part, from accretions of automation over time. Enterprises originally automated manual processes, an era he referred to as “computerization.” Subsequent efforts — from Excel macros to present-day RPA — have sought to automate those computer-based processes, he said.
“RPA is the automation of computerization,” Carden said, describing RPA as another layer of automation amid other attempts to stitch together old, computerized processes. “At some point of time, the house of cards must collapse,” he said.
Beyond robotic process automation software
Carden clearly has a horse in the automation race. His company, Pegasystems, views DPA as going beyond RPA to provide an “end-to-end strategy for digital transformation.” In this vision, RPA plays a role in transformation, but a transitional one.
Carden outlined the following scenario: An organization decides to “go digital” with a new customer onboarding system, spanning mobile and web engagement. Such a customer deploys RPA as fast way to tackle the necessary integrations with backend systems. RPA thus provides a bridge to digital transformation, but a temporary one. After the onboarding system goes live, the organization can, over time, descale the RPA installation, replacing bots with “true API integration into the backend systems.”
This approach makes robotic process automation software a short-term expediency. “RPA as a permanent solution for integration is madness,” Carden contended.
RPA, DPA and other emerging fields such as intelligent process automation, which blends RPA with AI, are all vying for enterprise and channel partner attention. The next couple of years will reveal which technology, or combination of technologies, gain the upper hand as the preferred tools of digital transformation.
Enterprise digital transformation projects are snagging on organizational issues and technology infrastructure, opening opportunities for consultative IT services companies.
A batch of reports published this week point to the perils of the digital era. The research reveals a landscape in which digital transformation projects frequently fail and highlights a list of obstacles including network shortcomings, legacy database limitations and spotty top-management support for initiatives. The pressure to transform — coupled with the range of technology options available to do so — complicates matters, as IT leaders and their business counterparts search for a way forward.
“Enterprises are saying today they have more options than ever before and are confused about which way to go,” said Peter Finter, CMO of Couchbase, a NoSQL database provider that conducted a CIO survey to gauge the state of digital transformation. “The role of the consultants is becoming more and more important as they are asked to make recommendations on this plethora of alternatives.”
Eighty-one percent of the respondents to Couchbase’s survey reported a digital transformation project failure, significant delay or scaled-back initiative in the last 12 months. The company polled 450 executives heading digital transformation projects.
The Couchbase survey, published Sept. 4, suggests the urgency of digital transformation and a lack of forethought may be hampering projects. The poll found most organizations pursuing transformation are doing so reactively. The top drivers are responding to competitors’ advances (23%), pressure from customers for new services (23%), responding to regulatory changes (23%) and pressure from the C-Suite (22%). Proactive ideas from within the business influence only 8% of digital transformation projects, according to Couchbase.
The reactive obsession with digital transformation is such that 71% of the respondents believe “IT teams risk working on projects that may not actually deliver tangible benefits,” the survey reported.
“[Enterprises] are doing it because they have no option but to do it,” Finter said. “That is worrisome.”
Also troubling: 52% of digital transformation efforts are the IT shop’s sole responsibility despite the business-wide implications of success or failure.
“IT is still holding the steering wheel of the majority of digital transformation projects,” Finter said. “They need the support of the rest of the board room and the C-Suite.”
A digital transformation strategy revolves around change management and business transformation, so business leaders need to work alongside the technologists, he added.
Digital transformation in business: Tech limitations
Technological issues also contribute to digital transformation difficulties, with network infrastructure one source of concern.
An Accenture survey found many enterprises adopting digital technologies, but far fewer that were completely confident in their networks’ ability to cope with business demands. The survey of 300 senior IT and business executives revealed high adoption rates for IoT/edge computing (77%), big data/analytics (83%) and digital customer experience (78%). But only 36% of the respondents reported being “very satisfied” that their networks have the necessary capabilities to support business needs, according to survey results published Sept. 4.
“I think the infrastructure and network modernization is as important as any of the major digital investments a company makes,” said Charles Nebolsky, managing director and global leader of Accenture’s Network Business.
The networking challenges point back to organizational conflicts. Forty-eight percent of the Accenture survey’s respondents cited “misalignment between IT and business needs” as among the main obstacles. Bandwidth and performance demands outpacing networks’ ability to deliver ranked among the technology-based problems, with 45% of respondents citing that issue.
Nebolsky said the network infrastructure problems stem, in part, from the practice of replacing network devices as they fail rather than investing in software-defined networking and an enterprise platform with built-in automation, analytics and security.
A network approach designed to “keep the lights on” won’t equip an organization to support large numbers of remote employees, IoT initiatives, a growing roster of SaaS applications and corporate systems running on various public clouds, he suggested.
Network outages can bring production to a halt in companies dependent on cloud systems. Nebolsky cited the example of a pharmaceutical company that couldn’t ship products because of a WAN outage that took down its cloud-based labeling system.
Networks don’t have to fail entirely to jeopardize business operations and transformation efforts, however. Indeed, network brownouts have surfaced as a challenge for enterprises. A Netrounds survey found 83% of large organizations have reported economic damage and employee frustration stemming from those events, which the company describes as unexpected and unintentional drops in network quality. Netrounds, which published its findings Sept. 3, polled 400 end user, network operations and C-level respondents in the U.S.
Technologies that enable digital transformation may exacerbate the brownout issue. Netrounds, based in Stockholm, said the adoption of technologies such as hybrid cloud, SD-WAN and network virtualization will likely lead to a sharp rise in the cost of brownouts.
“If the network platform is not running, the business cannot run,” said Cyril Doussau, CMO of Netrounds.
Databases are another technology roadblock in the path of digital transformation projects, Couchbase’s Finter said. He said the database is that last piece of IT yet to be fully transformed. “We are finding moving to a modern database is a transformation effort in its own right,” he said.
Finter pointed to some bright spots in digital transformation, one of which is increased levels of investment. That boost underscores the higher priority of projects.
“The Amazon effect is causing business leaders to realize that digital means disruption,” he said. “Their competition is just one click away. People are now willing to spend more money on these projects.”
As IT vendors struggle to modernize their channel partner programs, partner firms of all types should be actively weighing in.
That’s according to speakers at CompTIA Inc.’s ChannelCon conference, held in Las Vegas from Aug. 5 to 7. In a session led by Thom DeVos, vice president of client services at channel strategy consultancy JS Group, and Heather Murray, vice president of security solutions at distributor Tech Data Corp., it was made clear that traditional partner programs can’t cut it anymore. The channel ecosystem has become more complex and sophisticated than ever before, rendering conventional programs defunct. Vendors increasingly realize this, but few know how to modernize their partnering approach.
“What we are seeing is this big evolution where vendors are coming to us saying, ‘We know we need change. … What do we do?’ ” DeVos said.
He said channel partner programs must be flexible enough to accommodate modern buying and selling behaviors. That might mean pivoting from the revenue goals that programs conventionally focus on. “The old programs … are not going to work, because as everything goes to ‘as a service,’ ” conventional revenue goals stop making sense for partners.
Modern partner programs may also have to drop or deemphasize traditional partner incentives, including sales performance incentive funds (SPIFs) and rebates. Murray said partners are more interested in resources such as demand generation.
“I hear it all the time from partners: ‘SPIFs are too hard to manage. Don’t give me SPIFs. Let’s figure out a way you can invest in my company, ‘ Murray said.
She encouraged channel firms to tell their vendors what is and isn’t working for them. “The partners are the ones that know what they need, and they should … speak up. … For the small business, the medium[-sized] business, the MSPs [managed service providers], the MSSPs [managed security service providers], there are different models and there are different needs, and without your voice being heard, our vendors aren’t going to make the changes needed.”
Devos agreed, saying that partners should realize that they are in the power position in their vendor relationships. He said partners should take a hard look at their line cards and determine which vendors truly provide “the opportunity to better serve my customers.” Partners should also think long-term about their vendors’ strategies and areas they are investing in for growth. “Take this time to … strengthen or terminate the relationship. … Use that power position, because it is only going to make the ecosystem better as a whole,” he said.
Once vendors take into account the needs of different partner types, they can develop a partner program framework that serves each channel segment uniquely, Murray noted.
“If you are the vendor, you have to build [a partner program] that works for everybody. But you really don’t. You don’t have to. You can build out different types of programs that will work for pockets of partners … and [help] enable them,” she said.
Fresh off of its purchase of Aerohive Networks, Extreme Networks revealed it will double-down investments in the channel.
The Aerohive acquisition, which closed Aug. 9, expanded Extreme’s portfolio of wireless LAN technology but also brought in a raft of new partners, including managed service providers (MSPs). With that influx, Extreme’s partner roster now stands at about 11,000 firms. About 86% of Extreme’s business goes through the channel, according to the company.
“Basically, we are inheriting a channel that is focused on managed services, which is great, because that is exactly the way we see the market going and the need for customers is for managed service,” said Gordon Mackintosh, vice president of worldwide channels of Extreme, based in San Jose, Calif.
Mackintosh said Extreme and Aerohive’s partner programs will run separately for the foreseeable future. In part, this decision is to minimize disruption to partners. He said Extreme eventually will look to integrate “the best of both programs to create a new unified partner program.”
What Extreme, Aerohive partners can expect in FY20
For Extreme’s fiscal year 2020, kicked off in July, Mackintosh said the company will build on a partnering approach that it developed last year. In fiscal year 2019, Extreme selected a group of about 200 partners globally, 100 of which were in the U.S., to devote extra resources and support. The focused strategy resulted in selected partners growing 10% faster than other Extreme partners, he said. Extreme now plans to expand that group to about 200 U.S. partners and increase its dedicated resources by about 50%.
“More partners will be able to experience a much more focused and hands-on approach from Extreme,” he said.
Extreme plans to roll out new tools and support to its partner base as a whole. One of the tools will be Quick Quote, a tool that lets partners build quotes online and send them out to distribution, Mackintosh said. The vendor will also expand its online education platform, Extreme Dojo, with more training.
Another focus area for Extreme will be on new customer acquisition, he said. Extreme will continue to support partners in its key vertical markets, two of which — K-12 and retail — Aerohive partners already target. Mackintosh said the Aerohive acquisition “helped to solidify our position in those verticals.”
Aerohive also takes Extreme into the midmarket and SMB space. With Aerohive’s portfolio, partners can offer “a new turnkey technology for SMBs, branch retail or schools … Those customers will be major targets with the Aerohive acquisition as it is today but even more so” as Extreme integrates with the acquired technologies, Mackintosh said.
More partner resources in development
Mackintosh noted several other plans in the works. Partners that struggle with adopting a managed services business model can expect to see a new MSP program in late October. The program will offer business transformation and consulting services.
Extreme Networks also aims to help partners overcome staffing shortages, a consistent problem caused by a widespread dearth of IT skills. While still in concept form, Extreme is considering launching a program that would quickly train job-seekers who are early in their careers. The company’s program would then place those students in positions either at Extreme or partner businesses.
“We are going to be leveraging our global network of training partners as well as our online training capabilities within Extreme Dojo to target early career graduates,” Mackintosh said.
A number of traditionally hardware-focused IT vendors now pursue software, services and consumption-based pricing. Cisco provides an example in the networking field, making its first move to sell a switch as a subscription in 2017. Server-maker HPE in June announced plans to deliver its entire hardware lineup as a service by 2022. Storage vendors are moving in this direction as well: the NetApp subscription model provides one example.
NetApp channel executives in March discussed the company’s hardware-to-software transition and partner enablement strategy. Mathew Chacko, director, channel sales, consumptive solutions at NetApp, and Mara McMahon, global principal consultant, Fueled by NetApp, provided additional details in a statement describing the company’s subscription strategy and how partners fit into this approach.
NetApp’s strategy is built around its portfolio of managed and unmanaged consumptive offerings associated with the company’s private and public cloud solutions.
“NetApp, as a whole, believes that these offerings enable partners to embrace a land-adopt-expand-renew model in subscription-based selling,” according to Chacko and McMahon.
With land, adopt, expand, renew — or LAER — the seller seeks to create a long-term relationship with the buyer. The “land” step represents the initial sale, while “adopt” covers activities designed to ensure customers successfully use the offering. This phase is particularly important with cloud-based, subscription software and services — organizations are unlikely to renew an offering users don’t embrace. The “expand” step encompasses up-selling and cross-selling initiatives that extend use. All the steps point to the goal of customer renewal.
NetApp uses LAER in its partner program, with support coming from the company’s Fueled by NetApp (FBNA) program. FBNA equips NetApp partners with best practices for go-to-market strategy and planning. FBNA covers pricing, packaging, defining use cases, creating service-level agreements, messaging, sales training, demand generation and market awareness, the company executives noted. They added that the best practices create a foundation for selling subscription services.
NetApp subscription model for public, private clouds
NetApp’s lineup of consumption-based offerings gives partners various entry points to customer sales. NetApp’s Cloud Volumes OnTap, for instance, offers a way to land deals in the public cloud, putting partners in a position to help customers as they migrate to AWS, Microsoft Azure or Google Cloud Platform, according to NetApp. Cloud Volumes OnTap offers SnapMirror replications for disaster recovery, which NetApp said is a typical first step in a customer’s cloud journey.
In keeping with the NetApp subscription model, Cloud Volumes OnTap is available as an hourly pay-as-you-go subscription or as a one-, two-, or three-year subscription.
Meanwhile, NetApp’s hyper-converged infrastructure (HCI) offering, HCI Cloud Consumption, lets partners land customers in a private cloud setting, NetApp noted. The offering is available as an annual subscription.
“More and more partners are establishing private managed cloud and multi-cloud support services themselves based on NetApp technology,” according to Chacko and McMahon.
At the adoption step, the NetApp partner shifts to helping customers migrate production workloads to the public cloud. In private cloud environments, partners help customers incrementally deploy “right-sized compute and storage nodes” to boost adoption, according to NetApp.
NetApp partners have a few options for expanding upon the initial sale. For public cloud use cases, for example, partners can tap NetApp’s Cloud Data Services portfolio, which includes Cloud Sync for migration and Cloud Insights for hybrid multi-cloud monitoring and optimization. And integration between Cloud Data Services and NetApp’s HCI platform lets partners extend the company’s private cloud offerings to enable hybrid multi-cloud data management, according to NetApp.
Another expansion opportunity: Partners can position NetApp Kubernetes Service for application development on the company’s HCI platform or in the cloud.
“This would enable partners to attach high-value services focused on application lifecycle management in a hybrid multi-cloud environment,” the NetApp officials said.
To complete the LAER sequence, NetApp offers what the company describes as an “increasingly simplified renewal plan” that aims to help partners quickly finalize deals.
Remaining trusted advisors
The LAER approach within the NetApp subscription model intends to help partners avoid churn and encourage customers to renew subscriptions. Successful adoption and the resulting renewals cement the partners’ trusted advisor role among customers.
This model, according to NetApp, “provides NetApp partners with an opportunity to generate multiple, recurring revenue streams that have the potential to increase over time.”
Organizations adopting DevOps principles and moving toward the new world of cloud-native applications may be overlooking an important element in this modernization push: the data problem.
That’s the thinking of Jeff Bozic, principal architect in Insight Enterprises’ cloud and data center division. Data management, he said, involves a host of issues, not the least of which is the basic question of where does the data exist in a complex hybrid IT environment.
“It’s a big challenge and it’s only going to get worse as we create more data,” Bozic said.
Data problem: key factors
A number of factors contribute to the data problem. Bozic cited the DevOps movement, public cloud adoption, microservices-based applications residing in containers, new data sources such as IoT streams, and the pressure to create dynamic apps that react faster to user needs.
Those considerations put a strain on traditional data flows, databases and extract, transform, load (ETL) processes, according to Bozic. The newer development techniques, application models and performance expectations raise data-centric questions for organizations.
“How do these data structures need to start changing, and how do the databases need to start changing?” Bozic asked “How do I protect that data? Maybe my traditional data protection solution may not make sense. The disaster recovery process may not make sense. I want apps to be portable to run in different clouds; data may have to start moving. How do I know where it is, and how do I follow it?”
Blithely acquiring more up-to-date database technology — NoSQL offerings versus traditional relational databases, for example — may not be the answer, however. Similarly, organizations that immediately attack data structure as a point problem, without paying attention to the broader organizational context, may be in for some difficulty, Bozic suggested. He emphasized the importance of getting various internal teams talking together as a precursor to fixing the data problem.
Bozic pointed to Agile as a method for breaking down silos within an organizations and getting the database team, the infrastructure team, the security team and other groups working together to take on challenges. Breaking down cultural barriers is the first step toward understanding how to change an enterprise’s data structure and paving the way toward cloud-native development patterns, he noted.
Success is unlikely “if you don’t have the culture of becoming Agile and processes in place and cross-functional teams,” Bozic explained.