A new year is upon us. As you fine-tune your plans, consider these seven business and technology trends for 2019.
A shifting competitive landscape
From ISVs to cloud ecosystem consultants, unconventional partner types will continue to gain ground in 2019. Forrester Research’s Jay McBain says ISVs will be the fastest growing partner type, expanding from some 10,000 to more than 1 million firms by 2028. Channel partners can collaborate with the emerging players, compete or acquire.
More M&A on the way
With that latter strategy in mind, expect 2018’s blistering merger and acquisition pace to continue into 2019. Managed service providers and public cloud consulting specialists will remain popular acquisition targets, but the market might shift to the buyer’s side later in the year.
Apprenticeships make a comeback
M&A deals, however, aren’t the only way to gain the expertise needed to compete. Look for the continued rise of IT apprenticeship programs in 2019. Such programs aim to cultivate technicians, software developers and cybersecurity specialists. Channel partners are beginning to develop apprenticeship programs, partnering with state and local governments, trade schools and other organizations.
Demand for cloud cost management
Helping customers manage growing cloud deployments will continue to keep partners busy as one of the top technology trends for 2019. Their top chores will include working with clients to keep cloud budgets under control, a task complicated by complex, multi-cloud environments. How big is the issue? A Softchoice survey found 57% of IT leaders said they exceeded their cloud budgets.
Edge computing gets smarter
While cloud becomes the innovation foundation for cloud and blockchain, partners can also expect edge computing technology to continue its drive toward greater intelligence. More compute and AI capabilities will become embedded in edge devices, leading to an “intelligence of things.”
Mixed signals on emerging tech
Blockchain and AI continue to capture the imagination, but the technologies will be subject to uncertainty in 2019. Blockchain projects are underway in verticals from financial services to healthcare, but the path the technology will ultimately take and whether it will become as transformative as predicted are still unknowns. AI, meanwhile, attracts interest from partners, yet some struggle to deploy the technology.
AI for the masses?
Technology prognosticators at Deloitte consider the democratization of AI as one of the key technology trends for 2019. AI services offered through public cloud platforms will simplify AI development and broaden market acceptance, according to the consulting firm. Deloitte also points to 5G as an important development, noting U.S. business will soon need assistance determining whether the technology is a fit.
These business and technology trends for 2019 point to a complicated year ahead for MSPs, cloud consultancies and other IT service providers. Non-traditional rivals and new partner combinations born of M&A activity will make for a somewhat unsettling environment. Cloud consulting, migration and management will continue to generate opportunities, especially for partners who can address perplexing cloud cost management issues. And emerging fields such as AI and blockchain may or may not bear fruit for partners this year.
Citrix’s continuing transition into the cloud business is getting a reinforcing push from Citrix partners, with newcomers playing a role.
The company transacted business with more than 6,100 partners in 2018, 900 of which were first-time Citrix partners. That’s about 15% of the transaction volume. Among the new partners are many born-in-the-cloud partners and channel companies that have built a solid business moving customers’ workloads from on-premises systems to the cloud — with Microsoft Azure the typical target, noted Craig Stilwell, vice president of worldwide partner sales at Citrix.
“A lot of those [partners] have a strong Microsoft skillset,” he said.
Stilwell said the Microsoft skillset translates well into Citrix technology. Indeed, Citrix and Microsoft have a long-standing technology alliance. That alliance has multiple threads including the ability to offer customers virtual desktop infrastructure with Citrix Cloud services on Microsoft Azure. Citrix Cloud is a platform that lets organizations create digital workspaces for users from a single console.
While Citrix and Microsoft offer technology integration, the companies also aim to coordinate channels as well. Citrix Solution Advisors and Microsoft service providers, for instance, can tap the Azure Marketplace to sell a combined offering consisting of Citrix Workspace, Microsoft 365 licensing and Azure cloud capacity. To further underscore the channel partnering point, Gavriella Schuster, corporate vice president, One Commercial Partner Organization, at Microsoft, was on stage at Citrix Partner Summit 2019 to talk about the companies’ collaboration.
Citrix, meanwhile, set the channel groundwork for the cloud direction in 2018, revamping its partner program with subscription revenue and Citrix Cloud in mind. At Citrix Partner Summit 2019, held in January, the cloud focus continued as an important theme. Stilwell said products such as Citrix Workspace, which is powered via Citrix Cloud, will dramatically expand the addressable market for Citrix technology. Citrix’s traditional desktop and application virtualization products meet about 30% of a customer’s desktop computing needs. But with Citrix’s cloud-based offerings, the other 70% is in now in play.
“This is the year we really go beyond virtualization,” Stilwell said.
Cloud and subscription-based revenue are already making an impact at Citrix. The company’s SaaS business grew more than 200% in 2018. Another data point: The Citrix Service Provider business crossed 1.7 million active-user-per-month threshold at end of the 2018. Citrix Service Provider companies, a partner program subset, offer desktop as a service, application hosting and other subscription-based technologies.
“The service provider business is mostly a subscription consumption business,” Stilwell said, noting that business is growing 33% year over year.
To support its cloud and subscription momentum, Citrix has tweaked its rebate program to reward Citrix partners that get customers up and running on Citrix Cloud as quickly as possible. The idea is to focus on customer adoption and cloud consumption.
Citrix, Stilwell said, has moved “some incentives away from on-premises, perpetual maintenance renewals and shifted that toward driving real adoption, real usage of Citrix Cloud.”
Citrix partners span enterprises, SMBs
Citrix’s ‘beyond virtualization’ initiative is getting a lift from a range of partner types. At one end of the spectrum, large global systems integrators are helping Citrix land projects. DXC Technology, for example, is teaming with Citrix at Saab on a digital workspace project that relies on Citrix Workspace as a key component.
“We’ll … continue to work more and more with large global systems integrator companies like DXC,” Stilwell said. “However, that doesn’t mean we are going away from the regional systems integrators and regional partners that we work with.”
Indeed, while the global integrators bring in large-scale projects with enterprises such as Saab, Citrix Service Provider companies will focus more on small and medium-sized businesses.
“We will continue to expand on both fronts,” Stilwell said.
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 »