CRN roundtable discussion: Commoditisation of IT

Anthony: I think that really from an NEC perspective we need to transition our channel to more service oriented type of business, and supporting them with a traditional platform and hardware solution, to provide them but training them to become a lot more service oriented in terms of organisations. We are also attracting a lot more systems integrators into our business, which is also I suppose reflective of the way the industry’s going, and I think that unless you’re in that space, where you can provide services by a simple integration model, I think the drop box days are well and truly over. This is going to be one of the pull-throughs of the solution, having systems there, but ultimately it’s about that service, and that personalisation of those organisations, creating that strong relationship and as you say becoming that trusted supplier.

Mathew: Naturally I think that security is a really big opportunity for the channel. Taking that away from a smaller customer and giving them the ability to leverage some of the hosted services or cloud services, it’s still all required, something that’s going to secure and protect your data from the device right up to the data centre and right into the data that you’re trying to deliver to these organisations.

CRN: So the professional service is going to change?

Norman: Yes, your consulting is going to change.

As another example, Oracle has just brought out this device the database clients. It’s got servers, it’s got storage, it’s got network, it’s got database, it’s already pre-installed. What would normally take us 10 to 15 days to install, plus the database system, is two and a half hours. You plug it in, eleven streams can figure out where you go, and so our services model is having to change. This is the tip of the wedge. We’re going to have to change, and I think a lot of resellers are going to have to change in the cloud model. It’s not just hardware, I think it’s software. The old open source model: ‘Ok I might give you a grand a month in support, but what’s this licence fee thing? In five years’ time it’s going to be like that, whether it’s open source or whether it’s still proprietary, but I can see software vendors are going to have to be moving to ‘no you don’t have to pay a licence fee, you pay a monthly subscription fee, or a support fee, or whatever you want to call it, that’s the way the model’s going to go. Where is the software licence retailer going to be.

CRN: Is this going to result in a dumbing down of the IT manager do you think?  It sounds like the IT manager himself might soon start thinking ‘why am I here, what is my purpose now’?

Norman: There’s a huge issue. The IT manager is losing power. Who buys CRM On demand? Not the IT department. The sales director goes to the IT guys, ‘oh by the way we just bought this and rolled it out to my sales force but some of my guys are having trouble running it on their laptop, they’ve got the wrong version of Internet Explorer, can you sort it out for me please’.

Anthony: However, that’s a blessing in disguise, because one of the challenges for resellers is being able to talk at the CIO, CFO and CEO level, and so this pushes up our discussion beyond the IT department to one which is driven by business outcomes. So to that degree it does change the conversation you have with your customers, and it forces you to lift up that ante because traditionally we’ve gone into that IT department or systems administrator or whomever else they’ve been sending to and that’s always been a difficult one, because I know so many organisations have gone over the top – so in that regard it’s going to force organisations to go up that tree, and start talking a different language with them.

Dominic: The other thing that may have a completely different connotation is that I actually think that other industries, such as the motor vehicle industry will start going into services more as well, because of the electrification of cars and those sort of things, and they are now leasing cars providing overall plans.

Norman: That’s right, because in the car industry, you don’t go to your dealer to buy your car, you go to your dealer to choose your car. You do some research online, you go to a few showrooms for a test drive, and then you buy it either through your leasing company or through some online people.

Scott: The other one that there is that there is a shared or communal car model, where you pay a subscription fee and use it for a certain number of hours, and when you exceed the hours on the vehicle, you pay more.

CRN: I thought it was interesting Sydney characterising these trends, particularly in regard to Apple products, like some sort of locust plague….. is anyone else as concerned about Apple? Are they now the rapacious monopoly Microsoft was once viewed as?

Scott: You can actually look at the hardware platform, and if you look at Apple as a hardware platform it’s significant, and I think that it’s great that any other mobile device hardware platform, but then you start to look at the operating environment, the operating system running on that, and between android and the IOS, there’s a pretty even split there, so I’m not convinced they’re a monopoly. They might be the trendy choice amongst those consumers that want to have a choice.

CRN: Isn’t it true there’s been far more security problems on the android platform than the IOS by a factor of double?

Hwei: Just in terms of the fact you can get applications from anywhere for android versus the locked-down Apple alternative. We’re seeing a lot of malware for androids, but then there’s that misconception that you’re completely safe on Apple.

Mathew: I heard the other day that there’s about a 70 percent increase in the number of malware attacks on the android devices. Apple tried to secure it and hold the controls whereas Google are just very open and therefore it’s not as hard to control – so what we’re starting to see is that malware showing up on the androids, a lot more than Apple and that’s going to continue to create a challenge. 

Hwei: And with all the prevalence of jail breaking on iPhones as well, we’re letting in a whole raft of things.

Norman: So I see the whole model is changing dramatically. Another example where coming back to social media, we talked about Facebook and Twitter – we haven’t talked about Linked In, which in a business context is I think even more important. It is a threat to Seek. Seek and My Career. We’ve also got a recruitment business in addition to the service systems integration business. I set that up because one of my biggest challenges to growth is finding quality people for business consultants as well as technical consultants – but these days, okay they’ll still post an ad on Seek, but they’ll get the best results by going through Linked In with a roll and say ‘I need these skills, who’s got these skills in the marketplace, what’s their experience’ and so or ‘if they don’t who do you know’ and it’s just through a network.