Neville I guess if you look at it through the narrow prism of the device, there might be a perceived threat there, but if you think a bit more broadly about what they’re actually going to use the devices for – if they’re going to use it to access data and the explosion that’s going on in data and its storage and things like that, gives you an opportunity I’d say to reap revenue.
In terms of the traffic that’s going to be carried, and I know my colleague here on the left of me from Cisco is going to agree wholeheartedly with this around video and the switching and routing that’s going to be required to do that, and do it in a really high availability, high quality outcome is going to be enormous.
I’m not sure that it is all necessarily going on the cloud to be brutally honest, and the cloud always has to come to somewhere, and Jason you might have a view on this as well – but I do think there’s still an enormous opportunity around those different sorts of spaces. And the last thing I’d say which might be a little bit provocative, is that unfortunately I don’t think you can stop it. So if you ignore it, then I think you’ll be caught on the wrong side of history.
Jason I think it’s just a different opportunity. We are going to use some opportunity in some areas, but there’ll be opportunities that pop up, because it is complex, because there’s any device, and it’s just not going to be all Microsoft like it used to be. People are bringing their Apple devices, they’re bringing a multitude of devices.
From a Cisco point of view, our mantra is ‘any device, anywhere, any time’ – and central to that is our identity services engine, which actually solves that part of the problem – so we’re trying to take a network-centric view to something that is a very complex problem, and the value of the channel is that they can take that and solve those complex environments that are now not what they used to be. They’re not just a PC on a desk delivering applications, it wasn’t just someone talking on a phone.
Sydney Yes, but once you’ve fixed it you’ve still lost the hardware business. I mean you fix it, it’s done, but at the end of the day, now everyone bringing in their Apple device, I have lost that hardware revenue. Now I know a comment was made about ‘hey, don’t worry about the vendor, because you’re only making 3 percent right on the hardware, well guess what, we’re not making much more on any piece of your hardware, doesn’t matter what we sell, software or hardware, the margins are getting skinnier and skinnier'.
Nick Once you’ve lost that you’ve lost it, it’s gone, and you can’t underestimate what it means to you, when you’ve got a revenue contract and you’re rolling out that hardware and you’ve got control of it, you lose that. Well where does it come from? Services? I mean once you fix the problem and most of our clients, whether it’s SME, small corporate or big corporate for that matter, a lot of them have their own IT departments nowadays.
Syd, you’ve got a successful business and over 35 years you’ve had a successful business, because you know what you’re doing and the main reason for that is that you’re actually doing something that technology doesn’t do. I would just – what I think about it is forget about getting lost in the notions and terms of technology, vendors have to commoditise things real quick, because their shareholders say so. And whether it’s something that’s been around forever, or whether it’s an advancement and emerging technology, they have to do that, because their shareholders say so.
So it becomes commoditised at a sell level, it’s a commodity sell – but what you’re involved in is not that. What you’re involved in is highly considered decisions that your customers have to make based on solving business problems, and the beautiful thing about your business and every reseller’s business is that what you do can’t be commoditised, it just can’t.
Regardless of whether you’re selling technology called the delivering of BYOD or delivering of cloud, it can’t be commoditised, because you’re customising technology to solving their business problems. You’re in the sweetest spot ever, because the confusion that’s coming from, especially the analysts trying to call things different things, is creating so much confusion for your customer, that you’ve never been in a better situation, and don’t buy into markets being flat, they’re not.
Jamie I think the business world isn’t changing. It’s changed. The word ‘embrace’ has been tossed around a lot and I think that is the biggest opportunity for resellers – you need to embrace what’s happening.
I read a survey only a couple of weeks ago of a study done of 20 to 30 year old somethings out in the market – the question was around ‘how do you choose where you’re going to work?’ and over 70 percent said they’d choose where they’re going to work based on the working conditions that that employer offers – the type of devices they get to use etc etc. So that’s a huge change right, and the up and comers are going to really dictate who’s employing them, and I think we need to embrace that and embrace it now.
Audience question The other aspect, we were talking then about selling the nodes, and the implication of potentially a reduction there based on BYOD, but really for resellers it’s all about annuity income – it’s great to do some ad hoc consulting, there are opportunities to talk to customers and solve problems, and that is consulting, and that’s excellent, but there’s an interesting dynamic here in terms of BYOD in the sense that in the managed services space there’s a lot of technology movement around mobile device management technology.
They’re all building it and through people like Kaseya and all these sorts of things – but when you talk about BYOD I think they’re sort of contradicting each other, in the sense that why would business owners at an SMB level which make up most businesses, pay a monthly reoccurring fee for their staff’s kit?
Now most businesses aren’t going to pay half or give you an option. We’re dealing with the masses of SMB sites, you know 20 to 100 that make up most businesses – they really struggle with that concept of even managing mobile devices, because in their perception they don’t break. Apple did a great job of that.
So you’re actually struggling to (1) charge an annuity income for it, but (2) if you bring in BYOD, you almost can’t charge annuity income for it, because it just goes against corporate logic, in the sense of paying a monthly fee to manage other peoples’ devices – so really that’s just a statement. What do you guys think?
Jeff Morris Well I’d argue why would you want to manage someone else’s device first and foremost. I think the industry’s shifting anyway from managing someone’s device, why would you want to manage it. Do you really want me managing devices and seeing what you’re doing to how about I make sure that I deliver the content that you need to access for work – I deliver that to you, but I make sure that I’m not exposing the business to intellectual property loss or privacy breach – so I’d rather be able to secure the information and deliver it to you than really care about what you’re doing outside after work, and what apps you’ve got on your device.
I think that’s what you’re saying that if you look at what Citrix is doing, they’ve got app wrapping, containerisation, VMware’s doing it – and the industry’s moving away from ‘how do we deliver the content to you securely’ – rather than ‘that’s your device, I really don’t care about it and if you lose it I really don’t care, I just want to make sure that from a business point of view, I’m not exposed to a breach of IP or a loss of intellectual property’.
Jeff Hwong I think there’s going to be another trend coming outside of BYOD. In various countries where the corporate concern about security is more tying, there is a new trend that’s going on right now, it’s called COPE meaning Corporate Owned and Personally Enabled. So you can forget about your BYOD.
I think there’s a trend coming in right now where corporations are now doing full scale negotiation with device vendors such as us to provide devices that both the employees can access at home, and also use the same device during the work time. II think that’s a new trend that’s going to come.
Whether it’s going to be successful or not, I’m not sure, but in other countries we are seeing this kind of policy being implemented – maybe not for Australia, because you guys like to have your own toys – but in other countries it’s happening right now.
Audience question for David Lenz, Ingram Micro: Is there an opportunity for disties like Ingram Micro to help partners develop strategies to make an annuity model around annuity model around mobility more convincing for their customers?
David I think when you talk about the opportunity for resellers, there’s always going to be disintermediation take place in every market, and it happens, it’s been going through life cycles all the time. The issue people need to look at is that people are going about SMB and low index, SMB market and things like that, but if you look at people who are actually buying product at the moment, it’s in the SMB space, they’re still buying. They’re buying a lot of it.
So their concept of everyone’s talked about cloud, we’re not seeing all of these people move to cloud. So it’s not like an absolute avalanche of people going down that path. If you look at the transacting partners that we see in the marketplace, they’re still selling core technology, still selling servers, desktops etc into that space.
We do a lot of work in the cloud business at the moment, but I can tell you now that at the moment, we probably have about 60-odd partners signed up and probably only about 13 of them transacting. That’s right in that pure SMB space.
So I think people need to get a little bit of context about that, it’s not going to disappear in the next couple of years. From the point of view of market opportunity it’s still there.
So if you then look at what the opportunity is for organisations who want to go down a mobility plane, there’s a lot of vendors out there who are starting to build capability for a reseller to actually have that conversation with their customer around what they should do, how they should go about it, and then that drives both the sale of hardware, plus the management and the building of some annuity associated with it.
So the vendors themselves are looking at it from the point of view, whether it’s Microsoft, Apple or anybody – they are going down that path of looking at how you start to build a business around that. What apps do you deploy, what do you actually move across, how are you actually going to manage that part of it – there’s a lot of advice that needs to be brought into play there, and the bigger companies who make the decisions to move to BYOD.
A lot of us are in that space today, and that’s great, we’ve made that decision, there’s a little bit more management infrastructure associated with it, a little bit more process already built in, but down in that mid to low end SMB market, I’m not seeing that as being the massive shift that’s going to happen at that particular time. They’re still rolling out new networks, upgrading servers, doing all those types of things.
So I think there’s a good business model there for everybody for the time being, and I think where BYOD fits with companies, they are going down the path of moving it, but some of the core systems, core infrastructures all those things are still being run, and there’s good money to be made in that space, and especially the comment around data management.
Data management is going to be THE biggest thing in the next three or four years. How do you manage the content, how do you manage the accessibility of the information you’re providing, and then more importantly, rather than using Facebook, how are you going to use social media into that environment and then strategies around that – so there’s a long way for us to go yet, and I’m certainly not sitting there saying I have to change my entire strategy as a distributor overnight. I think there’s still opportunity for all of us to build our business, and we do have to grow with the business and refine our strategies, but that’s kind of the approach we’re certainly looking at at the moment.
Jeff Morris I certainly agree. To do BYOD depending on what you want to do, as we talked about, you need to have that conversation. It is a massive transformation. It’s also potentially a big investment and can cost you more money in terms of putting that infrastructure in.
Forester just brought out some research today – the Microsoft Windows 8 came out in a survey as the most valued platform that people would consider for their next tablet purchase in the enterprise space.
And there’s a reason for that. Everybody’s familiar with it, they’ve got the tools, they’ve got the training in place, you’ve got a gamut of legacy applications you can use with it, and so if you don’t want to go and put all this stuff in place we talked about MDM, MAM, virtualise, whatever it may be, take a look at a Windows platform, there’s a load of them out there today – what do you want to go, hybrids, or you have the convertible or you have a slate, that’s an opportunity for you, but you can go in and give them both sides of the coin, that you can go transform your infrastructure completely.
And I can help you with that with networking and so on, whatever it may be – or you can take a device now that truly has been optimised for a touch experience, but has familiarities, it’s like your old friend again, and you know how to integrate it.
So the idea again of going in and having that conversation and educating and showing both sides of that coin, I think there’s still an opportunity in the PC space, no question. The opportunity you have is to have that conversation from both sides of the fence.
Ashley I don’t know about anybody else here, but I haven’t got any fewer devices. I’ve still got my tablet, my desktop at work, I’ve got two phones – and I’m not getting any fewer of this sort of stuff. I think cloud is an additional conversation you have, and I think mobility is an additional conversation, and I think MDM you know bring your own device is an additional conversation to mobility – this is all extra stuff. I haven’t seen any shrinking back of any of this stuff. It’s just all new, and you just find the application and the business purpose.
So to our friend out there, I think you’ve got more work than you can handle frankly. Just making sense of it all for your customer is I think the real skill.
Nick I think the key think with all these new strategies, they’re not technologies, you can’t buy a cloud skew and mobility skew – it’s an ‘as well as’, it’s not an ‘instead of’. There’s more to add, there’s additional devices to manage, not new devices that displace others. More load on the network, more bandwidth required, more security, more data to manage, more data to analyse, more more more, because it’s what the device brings.
You know, it’s fundamentally a major major opportunity for everyone – and that’s why I said ‘don’t believe the flats’, there is no flats in the market – there’s only flats for stuff that shouldn’t be there any more, but that isn’t replaced by something that someone else is going to do. It’s replaced by more contemporary device or system or application or something in the data centre, that you’re all managing for your customers and solving those problems, it’s more, these things are more.
Jamie In the telephony world there’s been a lot of debate around the desktop phone – the debate’s been around ‘will that device disappear?’ The answer is probably over time, slowly yes – but will it be replaced with a device that allows you to come in and slot your mobile phone or more so your tablet into, that then becomes your phone, your video phone, that you can unplug and walk away with as you walk around the office or go in between meetings – so to echo everybody’s comments, I don’t think the device is going to disappear.
Jeff Morris One size doesn’t fit all, and every customer you have the conversation with will be different, it’s bespoke every time, it’s not off the rack, and it’s an opportunity for you. What is networking.
We’ve got schools that now have no education funding, and the kids want to bring in their devices and looking to use VDI, so we think VDI in a box is very low cost way for them to deliver a desktop on whatever device they want to bring in – but then the challenge there as well is because they’re so many wireless devices, is the wireless infrastructure they have in place able to cope with all those users – is the back on from a network point of view capable of handling that.
There’s opportunity there. It’s have the conversation, really sit down and understand where you want to go and see how you can go on that journey with them.
Neville Maybe if I can say one quick thing – nothing anybody’s said for the last five or six minutes on this particular topic, has anyone mentioned the fact the actual customer has got smarter or more capable of managing this on their own? They need your help more than ever.
So all these other components, they all come back to one thing, complexity and change, and I haven’t seen anything in the marketplace that tells me the customer has got better at managing it by themselves – so I think there’s a huge opportunity there.
Audience question I hear you say BYOD is here. It is, it’s here. We are all in this room because we’re in IT and it’s constantly changing. We’re in the room because we make money. We’ve been successful. I’d be interested to hear what’s the next thing from BYOD in your opinion. Is it BYOD applications? What is the next thing that’s going to come on? What’s the next thing we should be looking at and getting ready for now?
Nick The next thing, the next incarnation of remote access started off as remote access and it was called all these things – just keep doing what you’re doing, and let the industry give you a new name for it, so you can go out and sell … And do it as well as you have been.
Jason I think you half answered your own question, in that the application might be, businesses are now looking at what applications they can put on those BYOD devices or any device that could change the way they do business, and in Cisco we have that as well – so it doesn’t matter where I am in the world, I can log on and do approvals on my smartphone, or whatever it may be, my iPad or from my laptop in my hotel. That’s the thing we’re looking at now, it’s the applications that now go on in this new world, that we can make a difference with. So that’s another stream of activity as well.
Jeff Morris I think there’s an opportunity for, we are already down that path, is well how do you scale it now, how do you automate it that the user can self-serve themselves, so they’re not putting pressure on IT. I think we’ll get there, where a user can basically provision their own devices, provision their own applications, and IT can sit back and focus on now innovating, you know how can they drive the business, rather than keep it up and running.
So I think what we’ll see is we’ll try and simplify where we can where the users are able to self-serve themselves, so I think that’s an opportunity in the software space and around the management side of it, where no matter what the device is, how can a user just go to a portal, no matter what the device is, provision that device and then grant themselves access to applications on that device, and if you can scale that, then IT can then focus on adding value to the business and moving the business forward rather than just keeping the lights on.
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