The year 2005 was arguably the time that technologies such as security and storage came to the fore and convergence in the form of Voice over Internet Protocol (VoIP) gained in credibility and adoption. The year also saw enterprise application integration (EAI) and mobility become serious areas of investment for both the SME and enterprise markets.
CRN has grabbed its crystal ball, consulted industry soothsayers and pondered the leaves in the teacup, and we’re predicting that 2006 will see these technologies continue to dominate end-user discussions.
That is not to say that 2006 will not have any unexpected twists and turns, but these technologies and the way they operate with each other, for example around mobile security or data encryption, mean they are well worth exploring.
Hot technologies for 2006
Mobility
With businesses increasingly needing access to information and applications anywhere anytime, the mobility space is set to be one of the more exciting niches of 2006.
For IDC’s mobility analyst, Warren Chaisatien, the fact every major carrier — Vodafone, Telstra, Hutchison and Optus — had launched a 3G network, means heated competition will also be the norm for 2006.
As such, IT resellers need to be aware of how they can leverage competition between mobile carriers themselves and mobile carriers versus wireless broadband providers.
"In the business market forget about all the exciting consumer applications like mobile TV," he says. "The killer app is speed itself — 3G is paving the way for carriers to compete with wireless operators in the business space, like Unwired, PBA and iBurst."
Another area resellers should be conscious of is the looming showdown between mobile carriers and wireless providers like Unwired and iBurst, Chaisatien says.
"Tier 1 carriers with 3G have the coverage that small wireless start-ups don’t, but not the speed," he says. "Mobile carriers also have the voice offering to supplement their offer despite the fact they are late to the mobility game."
Chaisatien says market statistics of the projected growth of 3G compared to wireless IPS is informative.
While revenues for 3G only came to $500 million this year, some $5 billion are expected in 2009. By comparison, wireless broadband is only expected to be $57 million between around 12 players. By 2009 this is expected to be a mere $349 million.
Resellers also need to be aware of the limitations and proper application of technology like smart handheld devices (SHDs) or PC data cards for notebooks, Chaisatien says. "For SHDs and BlackBerries, the wireless connectivity will continue to lag behind laptops and PC data cards connectivity by up to a year because they are based on 2.5G," he says.
Disagreeing, Vodafone business general manager, Mark Iles, says SHD, and particularly BlackBerry penetration, is likely to increase if anything in 2006. "Until now mobile email was a corporate thing but now small business guys are carrying them around," he says. "Next year, that phenomenon as well as mobile broadband will continue on as you get new players in like Microsoft with Magneto."
According to Iles, only around 1 percent of all mobile phones have email capability. But with the availability of BlackBerry connect — which allowed for BlackBerry functionality across non-BlackBerry devices — the category is expected to explode in 2006.
"The management of all these devices — even if email capability only goes up to 5 percent of all phones — is a huge opportunity for IT resellers," he says. "It is a sticky solution in that you can add managed services, asset management."
WebCentral CEO, Andrew Spicer, agrees. He says 2006 will see further innovation in from large vendors and boutique software houses offering mobile options or plug-ins for their existing software applications — such as CRM and ERP.
"Resellers should be conscious of the fact that a one-size-fits-all solution won’t work for end users," Chaisatien adds. "Both business and consumer customers will need a combination of devices and wireless technology — Wimax, 3G and Wi-Fi hotspot. The key is to be broad enough to provide a combination of solutions."
According to IBM Websphere A/NZ brand executive, Wes McDonald, this shift towards integration at a business process level is expected to accelerate in 2006 as organisations position themselves to respond quicker to market forces, whether they be regulatory, competitive or new business opportunities.
"In 2006, we will continue to see a shift that builds on basic connectivity and communications within systems towards solutions focused at the business process level," he says. "This is where service-oriented architecture [SOA] is key to ensure clients realise the ability for use, flexibility and a fast response to changing business demands."
For the company’s technical sales manager, Raymond Lambie, this means partners should be taking the necessary measures to ensure their entire technical team and sales force have a clear understanding of SOA. "That’s going to be the framework within which most vendors, IBM and others, will present their integration capabilities to customers over the next couple of years," he says.
According to Dimension Data national business manager application integration, Peter Menadue, 2006 will see some emergence of new hot areas, and some re-emergence of some golden oldies.
"Business process integration and automation will be big in 2006 as people gain even more interest in integrating business processes through IT and tackling the complexity that’s been built into IT over the last few years," he says.
And according to Sun Microsystems’ director of partner sales, Michael May, EAI has already come into its own with consolidation a likely feature of the 2006 landscape. "Five years ago EAI was a pure play/niche provider space with a number of small to mid sized providers in the market," he says. "Today, EAI is mainstream with all the major vendors offering a solution; 2006 is expected to be a year of consolidation of offerings and extension of standards."
E2E Technologies’ vice-president Asia Pacific, Darren Covington, believes EAI projects around automation, middleware platforms and data management will provide opportunities in 2006.
"One of the major forces there is the integration of mainframes, trying to leverage the most out of those already existing investments," he says. "Looking forward, the opportunity will most likely be in the ability to provide a seamless single view of data across the entire organisation."
For WebCentral’s Spicer, 2005 has seen increased demand for its managed applications services from corporate and enterprise clients, with particular emphasis on mail and core custom applications.
"In 2006, we predict that managed applications/ASP space will become more flexible in relation to enterprise application integration, and expect to see less of the 'all or nothing' approach and more “mix and match” solutions," he says.
"This hybrid approach will give customers the control they require while still enabling them to derive business advantages from outsourcing the hosting, backups, storage and maintenance of parts of their technology solution."
According to Spicer, the growth in an application service provider (ASP) model for EAI is creating opportunities for resellers in areas like email, CRM and ERP. "The ASP approach has made these types of applications more affordable not only for big business, but now also more accessible to SMEs, broadening the market for resellers of these types of applications," he says.
"In 2006 we expect to see systems integrators aligning themselves with existing application vendors and identifying up-and-coming applications developers that are looking to transition to an ASP model," he says. "On the SME side, we are expecting a greater take-up of newer applications like CRM, accounting and further penetration of business-grade hosted email."
Proof of this is in the expectation that more IP lines will ship by mid 2006 than terrestrial lines, IDC telecommunications analyst, Landry Fevre, says. "When you have more than 50 percent shipments, the momentum is enough to completely switch technologies over," he says. "You can also see it as being a reality through Optus’ acquisition of Alphawest so they can grab a share of the convergence implementation market."
For Fevre, the legitimacy of convergence can also be seen in the growth in shipments of IP telephony handsets. In 2005, shipments are expected to double from around 200,000 in 2004 to 400,000, with 2006 likely to see some 600,000 moved.
While adoption of these handsets has largely been seen in the 200-seat and up companies in 2005, recent vendor plays have suggested that the small business market will be the focus of 2006, Fevre says.
"Avaya and Cisco with Linksys One are starting to provide SME or SOHO-style VoIP telephony solutions," he says. "As the market matures, vendors are moving downmarket and are looking for resellers to get them a broader market; 2006 will be the year that IT resellers should look at VoIP."
So, 2005 may have been the year businesses actually invested in VoIP, but 2006 will be the year that VoIP applications receive a slice of budgets, VoIP software provider TeleWare managing director, Mike Blanchard, says. "We are beginning to see investment in applications — not just helpdesks and CRM — that take advantage of the converged availability of traffic to deliver real business benefits rather than only cost savings in the transport network," he says.
Such benefits include integration of multi-facetted applications like unified communications, collection of email on the mobile phone and use of SMS as a business tool to inform and update in a timely manner, Blanchard says.
"The challenge for resellers in 2006 is to get vendors to support them in convergence training," he says. "The delivery mechanism is increasingly hosted rather than CPE solutions, particularly for the SME, and the reseller has to learn how to address and compete in this new market."
For VoIP specialist distributor CMS — Better OnLine Solutions, it is also important to remember that convergence in 2006 has more to offer than purely VoIP, sales director, Jenny Lane, says. "Cellular gateways — aimed at reducing expensive landline to mobile costs — are beginning to come into their own as a standalone and complement to VoIP," she says.
"Collaboration, or remote meetings, will be another solution to watch as these solutions offer enormous benefits to the busy executive, and allows for a personal touch with interstate and overseas offices."
For Juniper Networks channel director, Sander Dales, 2006 will see the drive for convergence expand beyond traditional enterprise offices to remote and roaming users, connected through a variety of means including wireless, mobile and public internet.
"Certainly IPTV, with the choice of programming, the on-demand capabilities and (in the plans of some operators) the ability to deliver HDTV, will make a compelling alternative to existing TV services," he says. "Managed and hosted services also feature prominently in most service provider plans as they align the strengths of their infrastructures and offerings to the economic and service demands of their business customers."
According to Dales, the vendor’s SI partners have moved to capture opportunities by broadening their skills sets beyond traditional desktop computing and are becoming more innovative in solutions delivery.
"This is being driven by need to reduce expenses, together with the increased focus on the financial viability of customer transactions," he says. "Similarly, VARs are leveraging the simplification of convergence to increase the range of solutions they are able to offer to their customer base, enabling them to revisit existing customers with new packages and increase the average sales price to their customers."
"ISPs are also driving towards a greater delivery of converged network-based services and managed services such as voice, security, et cetera as a means to provide greater value and differentiation in a very competitive market."
With data accumulating at record rates in both the consumer and business spaces in 2005, it does not take a Nostradamus to predict that storage will continue to be a major player in the 2006 market.
In the business space, virtualisation and consolidation is expected to be of significant importance, with organisations looking to maximise their existing investments and continue their focus on compliance and security-related concerns.
The growing presence of tier 1 integrators and vendors looking to take a share in the SME market is also a factor mid-market resellers will have to deal with in 2006, Dimension Data’s data centre solutions national business manager, Ronnie Altit, says.
This could be seen in consolidated throughout 2005 with companies like EMC significantly broadening its offerings via the acquisition of VMWare, Legato, SMARTS and Dantz, and Sun’s acquisition of StorageTek. "Price points of centralised storage are no longer out of the realm of the SMB space and Dimension Data, as well as the vendors, are positioning themselves to be able to take whole of infrastructure solutions to companies in this space," he says.
With management of data costing three to four times that of storing the data, according to Altit, data management software will also be a big hit in the year to come.
Unsurprisingly that is also the view of IBM Software Group, certified consulting IT specialist, Tivoli, Trevor Foley, who argues storage virtualisation technologies are rapidly becoming part of mainstream storage infrastructure.
"During 2005, IBM increased its customer base for the SAN Volume Controller (disk virtualisation) by 140 percent based on cost reduction, improved utilisation, better performance and simpler management benefits," he says.
With workplaces becoming increasingly mobile, continuous data protection technologies are also growing in popularity, Foley says.
"Traditional backup/restore applications aren’t always suitable for files stored on personal workstations or mobile devices," he says. "Continuous data protection technologies provide close to real-time protection of files on these types of devices."
The year 2006 is also expected to see some clarity around what are exactly the legal requirements of local organisations when it comes to data retention, Foley says.
For NetApp director of alliances and marketing, Mark Heers, the emerging trends of data security — the encryption of critical data — and end users looking to buy storage from dedicated vendors, are expected to make an impact in the year ahead. "This does not mean there won’t be a continuing effort around firewalls and identity management, but an added focus on encrypting critical data will emerge," he says.
"Server and storage decisions are also being separated as more organisations see storage as a critical component of their infrastructure and are no longer simply buying storage from the server vendor."
On the consumer side of storage, 2005’s massive demand for flash-based memory products is expected to continue well into 2006, Legend worldwide sales director, Rob Kester, says.
"As consumers begin to explore the full functionality of their personal devices they are looking for greater storage capacities to support them," he says.
With high definition television growing in popularity, and using up twice the capacity of standard definition, products like personal video recorders are also shaping up as opportunities for resellers in 2006, Kester says.
Similarly, the growth in IP security and surveillance in 2005 will see sales in hard drive-based servers to manage the large amounts of data recorded by the digital camera sales boom in 2006. "Biometrics and security for personal storage devices will be particularly big in 2006," he says. "For example, a thumb drive requiring fingerprint identification or a storage device that requires thumb print recognition and other technologies to secure personal storage devices will be increasingly available in 2006."
Last but not least, security, for its impact on storage, mobility, EAI and convergence, will continue to be a major goldmine for the channel in 2006.
In particular, security offerings that take a range of functionalities and combine them in an appliance, such as united threat management (UTM) solutions, will continue to have strong relevance in 2006, Whitegold sales director, Jonathon Odria, says.
"The big thing this year has been UTM and I think it will be the biggest thing next year," he says. "I think IDC has said UTM devices will outsell firewalls/VPNs by 2008."
Agreeing, Dimension Data’s national security manager Neil Campbell says 2006 will be a big year for convergence within the security market, with functionality that has required many applications or devices to be incorporated into appliances.
"Network-based intrusion prevention systems and end point security were the two technologies that came into their own in 2005," he says. "In 2006, I think we will see an increased number of deployments of network-based intrusion prevention systems as they are mature enough for wide-scale implementation."
While awareness of UTM has grown this year in the market, a lot of confusion remained around a correct UTM approach, Check Point Software Technology, A/NZ country manager, Scott McKinnel, says.
"UTM is a blending of technologies on a single platform with an architectural approach," he says. "That shouldn’t be confused with an 'all in one, one size fits all' box being touted by new entrants to the security industry.’
This year has also seen the channel flock to managed security services, but a lack of commitment has seen these services met with less successful outcomes, McKinnel says. "In 2006, partners need to become specialists and create a dedicated security practice," he says. "It is also critical to decide what products, services and technologies they are going to — or not going to — offer."
This is even more pressing with several telcos starting to gain traction with their own managed services addressing the under-serviced SMB market. "The market is now becoming aware that security cannot be oversimplified, and as a result we will see customers demanding higher levels of expertise from their technology partners," McKinnel says.
For WatchGuard Technologies A/NZ sales director Sven Radavics, 2006 will see consolidation in the managed services area — "as the business community is realising that managed services are not just about device management but, more importantly, about policy, procedure and compliance management," he says.
"We will see some SIs and ISVs really start to differentiate themselves as real security experts in a bid to enhance eroding margins."
For less skilled resellers, the largest opportunity in the year ahead lies in replace ageing firewall technologies, Radavics says.
"The biggest opportunity I see for VARS is to expand beyond the basic product sell and to focus on education and consulting activities like user awareness training, security audits, penetration testing and compliance issues," he says.
With corporate espionage, application security and compliance continuing to grow as internal threats, the need to maintain endpoint security on devices like PCs, notebooks and PDAs will also be a growth area in 2006, Checkpoint’s McKinnel, says.
"The ubiquitous USB device is a classic example of a technology that continually infects PCs, yet corporations have a false sense of security because they have an anti-virus running on the laptop and whilst connected to a corporate network are secured behind a firewall," he says.
For Whitegold’s Odria, anti-spam solutions have also been a big growth area this year, with ID management set to explode in 2006.
"It’s a major issue for any business doing business over the web, you have to make sure people are who they say they are," he says.
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