How can the Singaporean channel capitalise on new technologies?

How can the Singaporean channel capitalise on new technologies?

Channel Asia Evolve outlines areas of priority for partners in 2019

Channel Asia Evolve, in association with Dell Technologies and Innovix Distribution

Channel Asia Evolve, in association with Dell Technologies and Innovix Distribution

Credit: Channel Asia

As new technologies flood the market - driven by a desire for transformation agendas at customer-level - the Singaporean channel is stationed at a crossroads.

Overwhelmed by choice, inundated by emerging solutions and challenged by end-user requirements, partners today are tasked with building a modern-day portfolio of offerings, underpinned by refreshed selling techniques.

Because as customers transform at pace, so must the channel.

“There are some notable exceptions in which Asia is leading in innovation,” observed Ajit Nair, senior director of APJ channel specialty sales at Dell EMC. “One is artificial intelligence [AI], where we can see lots of new approaches and deployments from the region. The other is digital cities, where we are seeing world leading implementations of various aspects of digital cities.”

Drawing on more than 30 years of IT experience, Nair - who holds responsibility for the vendor’s suite of storage offerings through the channel - acknowledged that legacy roadblocks still remain for customers, with digital ambitions hampered by previous investments.

“Yet across the region, we are seeing new companies emerge with innovative approaches to using technologies such as AI and the Internet of Things, so there is some aspect of a gap between those that do deploy new or emerging technologies, and those that don’t,” he added.

Delving deeper, Mark Tan - managing director of Innovix Distribution - cited software-defined, big data, digital health and IoT as key areas of growth in the market, alongside AI, robotics and blockchain.

“What remains fundamental is the progress of computing power from our mobile phones to the data centre,” Tan explained. “And customers require lots of storage to house the data for the CPU to process. Meanwhile, the cost of data storage continues to fall, making it possible to keep expanding digital footprints.

“While this is expanding, cyber hackers are using these technologies to disrupt businesses for monetary, social and political gains. Therefore, the demand for total cyber protection is an obvious one for the victims and those who are aware.”

Partner opportunities

In assessing the regional market, spending on digital transformation is set to sky rocket across Asia Pacific in 2019, with hardware and services dominating customer investments.

Ajit Nair (Dell Technologies)Credit: Channel Asia
Ajit Nair (Dell Technologies)

According to IDC findings, of the $375.8 billion forecast to be invested by businesses at a regional level, hardware and services will account for more than 83.6 per cent of total spend.

Such projections place the channel at the centre of a transformation agenda in both Singapore and Asia, with services spending set to be led by connectivity services ($44.2 billion) and IT services ($17.6 billion).

Meanwhile, hardware spending will be spread across several categories, including enterprise hardware, personal devices and infrastructure-as-a-service (IaaS) infrastructure.

At first glance, the future appears encouraging for a channel forever grappling with new technologies and customer requirements. Yet under the surface, a harsher reality exists for an ecosystem struggling to evolve at speed and scale.

“The Internet has made the cost of IT very transparent,” Tan observed. “Unfortunately in this part of the world IT partners are seldom able to sell at list pricing. This leads to further commoditisation of hardware and pre-packaged software resulting in razor thin margins.”

Looking back on three years of changing market dynamics, Tan said that - year-on-year - five per cent of partners have either switched trade, closed down or gone bankrupt due to profitability issues. A startling statistic in a market filled with the riches of innovative technologies and buoyed by increased customer spending.

“And we’re starting to see volume moving to bigger players who have the financial power to stay in the game,” Tan said. “20 per cent of the channel has indicated a strong intention to strengthen their revenue via services and solution selling.

“The good news is, we are seeing this trend especially in our SMB partners. SMB partners are slowly but steadily shifting their business towards enterprise solution and services.”

As cost of operation increases and margins continue to erode, Tan said productivity expertise and strong financial management acumen are the skills of the future for a channel paralysed by traditional practices.

“To stay ahead of the game, partners must start specialising or create a differentiator for themselves,” he added. “Partners have to think really hard to create and collaborate to be successful.

Mark Tan (Innovix Distribution)Credit: Channel Asia
Mark Tan (Innovix Distribution)

“The lowest hanging fruit will be the demand for storage - including those in the cloud - as it will continue to grow for the longest time. The services and recurring maintenance business around it will be a major revenue contributor.”

Services derived out of analytics of customer’s data will be another profit source, added Tan.

“Educating and consulting will provide either value-added services or generate profit for partners,” he said. “Along with this, full cyber threat protection on a customer network, alongside expertise in data are also immediate opportunities.”

In a direct message to the channel, Nair said that “no one technology” will bring opportunities for partners, rather a selection of key market segments.

“There are areas that we know require a deeper relationship with partners - including AI, IoT and broader digital transformation initiatives,” he explained. “We know that partners are a lynchpin for their customers, bringing crucial expertise and guidance on how to navigate a digitally transforming business landscape.

“The transformation initiatives around workforce, application, infrastructure and security has resonated very well with our partner community and our customers. These technologies are all tied to wider ecosystems that organisations need to be guided through.”

Specific to Dell Technologies, Nair said key market priorities are centred around tying together solutions for today’s technology and business growth challenges in the context of multi-cloud, which is driven by strategies recognising the value of data.

“However the organisation is using that data, we know that no one single cloud or on-premise environment can be the answer,” he added. “This drives our multi-cloud strategy, and our recent announcements at Dell Technologies World of course reflect this.

“The environment is complex and this is where our breadth of innovation from edge to core to cloud can support our customers.”

Channel Asia Evolve, in association with Dell Technologies and Innovix Distribution, focused on the key facets of growing a business, delving deep into how partners can reshape operating models, disrupt selling processes and building brand awareness.

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