In 2011, Marc Andreesen, co-founder of Netscape and serial tech investor, famously wrote that "software is eating the world", as the new breed of internet companies replace traditional vendors as the leaders of the tech industry.
The change is clearly impacting the Australian channel. As more workloads shift to the cloud and compute, storage and networking become "software-defined", skills around applications and software development is highly in demand.
Resellers are getting into apps, major infrastructure vendors are repositioning themselves – and their partner programs – around software, and software development houses are being snapped up.
Here are five ways that the Australian IT channel is becoming defined by software.
1. Hardware vendors becoming software obsessed
To see how far hardware vendors are moving into software, look no further than Cisco. One of the biggest messages at the router and switch manufacturer's Partner Summit in Montreal this year was that partners should focus on software.
Cisco has a new software partner program beginning next year, and nine out of 10 of its recent acquisitions were software, from malware analysis to collaboration.
Along with HP, Cisco now has its own cloud marketplace for third-party vendors to sell apps. It’s also pushing “smart cities” as an opportunity for partners to provide apps that take advantage of the sensors being rolled out in some cities. For example, Sydney’s Invigor Group is providing analytics for a wi-fi rollout by the Sunshine Coast Council.
2. Systems integrators moving into software
One of the most significant acquisitions in the Australian IT industry last year, Dimension Data’s purchase of Oakton was also a sign of how seriously big integrators are thinking about software.
Dimension Data chief executive Rodd Cunico put it this way: “if you don't play in the application space and you don't have deep vertical domain expertise, and you just sell [IT], you won't have a role in the future. It will become less about infrastructure management and ultimately about information management.”
The buyout of Oakton, a major Oracle and Microsoft consulting business, was valued at about $117 million and created a combined entity of almost 3,000 people.
Another integration heavyweight pushing into software is Data#3, which spent several million dollars buying a majority stake in Sydney wi-fi analytics provider Discovery Technology, with the intention of using the software with wireless networks in shopping centres and similar locations.
More recently, Data#3 partnered with NSW app developer BlinkMobile, which has customers in aviation, construction, schools, councils and other sectors.
3. Resellers becoming software vendors
Software’s importance has also seen a number of Australian resellers jump the gap into vendor territory. Some of the strongest evidence is in the Microsoft channel.
Nintex, which was born from Melbourne-headquartered Microsoft partner OBS, now has more than 1,000 partners using its workflow automation tool. Also making a name for itself is LiveTiles, a SharePoint interface tool spun out of integrator nSynergy and now headquartered in New York and about to list on the ASX.
It's all about the latest buzz phrase, "productising IP", and there are other Microsoft partners looking to get in on the act. Smarts around applications helped Sydney-based Breeze get targeted for the amalgamation with Brisbane reseller Technology Effect this year, while another Queensland-based Microsoft partner, CloudFirst, has developed an Office 365 platform aimed at a specific customer vertical, Franchise First.
4. Excelling with APIs
Former Express Online boss Danny Moore, a veteran of the distribution world, revealed this week he was re-entering the channel with a move to apps, laying out the strategy for his new cloud integrator, AppSpace.
As Moore told CRN, the new venture came about after he realised that if we was starting a new business today, he’d run his software entirely in the cloud. The business already has $1.8 million in private equity funding and former Optus chief Kevin Russell on the board.
Rather than simply resell apps, Moore’s plan is to offer API integration, support, single billing, deployment and related services.
The rise of Amazon Web Services, Microsoft Azure and other cloud providers is also influencing an emerging breed of partners to establish themselves as cloud brokers – using API expertise to connect different services.
One of these is Canberra-based Infront, which has established itself as a cloud broker, building a platform that allows customers to use multiple cloud services, with a particular focus on Cisco Intercloud.
5. Accountants buying analytics firms
Analytics firms are hot property in the Australian IT channel, with various players either attracting buyers, including among the 'big four' audit firms.
EY, formerly Ernst & Young, is leading the charge, buying two business so far this year. It snapped up ISD Analytics with its “real life SimCity” application, and 100-person company C3, and bringing technology from analytics firm Semaphore to Australia.
KPMG and Microsoft have also partnered to develop analytics solutions, while Deloitte has built its own cloud platform is partnering with SAP and Oracle.
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