Six months ago, Irish Computer asked a number of reseller luminaries for their impressions of 2011 and the first quarter of 2012. More importantly, we asked them what they thought the rest of the year would bring. Now we’ve gone back and asked them what they think of 2012 so far and how they think the rest of it will go.
Kieran McCabe, managing director, Triangle Computer Services
Six months ago, McCabe said 2011 had been a "tough year" until things picked up in December and Triangle hit all its targets. At the time, he told Irish Computer: "Stuff we expected to happen in October or November didn’t happen until December, although everything we expected to happen, happened. It definitely was a good year, but it just didn’t feel that way for first 11-and-a-half months."
Looking back on 2012 to date, he says it has been "nothing special", describing it as "similar in every respect to the past two years". Triangle is showing some revenue growth but "it’s not attributable to any seismic shift [in business] or anything like that. It’s more of the same at the moment".
The company has made a "very conscious effort to grow our own professional services business and put more into the mix," he reveals, "and it’s paying off for us in sense we’re improving our margins". The retail sector is turning out to be an important contributor to the operation with a lot of business in EPOS and related technology. "Progressive retailers see technology as critical to their future in much the same way as banking saw it 20 years ago," McCabe explains.
Fusion
He says there has been growth in the desktop virtualisation area. "I don’t know if it’s a fantastic revenue spinner but there are certainly some very exciting projects where we’re starting to see the fusion of very powerful technology and user requirements coming together." McCabe highlights a project at Beaumont Hospital that allows doctors to use run some of their critical applications on iPads. He says it has given doctors a sense of empowerment.
"The days of a doctor coming to see you with a big pile of files under their arm may be gone in favour of them opening up an iPad and seeing your latest blood test results." While that may have been possible in the past with a laptop, it didn’t have the same feeling as an iPad. "To some extent, it’s a question of what’s fashionable as well," he concedes, "but I’m not hearing anyone objecting to having applications on an iPad."
In terms of threats to growth, there is "still uncertainty out there in the large corporate sector and it’s having the effect of slowing down decision making". The number of deals that get postponed by a month or two for no apparent reason is quite obvious, he adds.
McCabe has also noticed what he refers to as "a sense of confusion" in the channel, a "blurring" of the functions of different elements of the supply chain. Whereas in the past the first contact from the customer would come to a hardware vendor, reseller, ISV or a consultancy house, the advent of data centre hosts and outsourcers has added an extra layer of complexity to the model.
The hosting company or outsourcer might be required to make improvements to the customer infrastructure but not have the skills in-house to provide the architecture for a complex solution. In those instances, they will "go to somebody who can", probably in the reseller community, but as McCabe notes, this "has the effect of splitting margin further in the channel because everyone is looking for a cut out of it. Where it will finish up, I don’t know".
He sees new alliances and partnerships forming but cautions that sometimes people might end up going round in circles. For instance, a company might come to Triangle with an offer to work with it on a project to deliver half a million euros of infrastructure to a customer. Triangle might accept the project and then find out that the work is for a customer it already knows.
Earlier this year, McCabe did not expect any revenue growth for Triangle in 2012. "I don’t think technology projects are going to keep flowing throughout the Irish economy in 2012," he said. He’s since changed his mind. "We will see revenue growth this year," he predicts. Asked why the change of heart, he replies: "I probably under-estimated the retail business. We’re going to see more of the retail business in the second half of the year. There are a limited number of customers but when you get some, it’s big business."
Eoin Goulding, managing director, Integrity Solutions
In February, Goulding reported that 2011 had been "a great year", in fact it had been Integrity Solutions’ "best year ever". Happily for him, the trend has continued in 2012. "It’s even better again, to be honest," he tells Irish Computer. "We’re flat out."
Hardware sales are going well and there’s been big growth around managed services. The UK government’s adoption of Good Practice Guide 13 (GPG13) covering people and business processes and technology to improve company risk profiles is driving a lot of business. Goulding believes something similar will happen in Ireland at some point "and there are more clients here that don’t have the skill sets, knowledge and resources to manage their security properly".
The UK is going to be a key area for Integrity, he reveals, and it is putting a lot of energy into that market. "Clients in the UK are massive," he says. "They’re way ahead of compliance in Ireland, they cut deals quicker and they’re bigger deals." The company has also opened a Glasgow office and he thinks it will be in a better position there as an Irish company because it comes from a similar sized market than any potential rivals coming up from England.
On the managed security side of things, Goulding reports it is going well because many customers just don’t have the knowledge to implement infrastructure, policies and procedures to deliver data security themselves.
Investment
From a vendor perspective, he says those spending time on the ground in Ireland are doing well, but there are quite a few vendors that don’t see Ireland as strategic and don’t seem to care about it at all. Customers can tell, he adds.
Back in February, Goulding highlighted Integrity Solutions’ decision to invest EUR*150,000 in a training centre to provide SANS (System Administration, Networking and Security Institute) certification as one of the big developments in 2011. SANS is the largest source for information security training in the world and Goulding claimed Integrity Solutions was the only company in Ireland able to offer its courses.
Today, he admits the company "hasn’t marketed it as much as we could" as it’s been "too busy trying to keep our own customer base going". Nevertheless, it’s been ticking along with regular clients and there is still "great scope there, especially around SANS certification".
In terms of threats in 2012, Goulding had previously identified the consequences of more companies holding off spending because of the euro crisis. Today, he says companies have held off spending but there are still a lot of deals happening "because they just have to go with it".
Another big area of concern is currency. The euro’s decline against sterling and the dollar is having a marked effect. A lot of Irish customers are having to pay as much as 20% more for product and licences because of the euro’s weakness. In today’s economic climate, that’s a lot of money.
At the beginning of the year, Goulding predicted it might take another two or three years for things to hit rock bottom. Now that we’re almost three-quarters of the way through 2012, he believes "we’re starting to get there now". Things are starting to flatten out and will probably stay like that for a while.
Nevertheless, he’s optimistic for Integrity Solutions. "If we get the UK and managed services right, we can grow pretty quickly," he states.
Andrew Miller, head of sales and marketing, Unity Technology Solutions
Coming up to its second anniversary this month, Unity Technology Solutions is enjoying a "busy and successful" year in 2012, Miller says. Net new customer wins are up on 2011 and it continues "to win great contracts in both the private and public sector". The company has increased staffing levels, particularly in support as growing numbers of customers look to outsource all their IT.
In terms of interesting technological developments, Miller highlights MetaCompliance and Spam Titan as two new security solutions the company is deploying successfully at the moment. Forefront Identity Manager is another solution gaining considerable traction and Unity Technology Solutions continues "to make strides with Microsoft Lync and virtualisation solutions".
In terms of the company’s achievements, he points to the recognition of its Citrix expertise when it won the Best Use of Technology in Education and Training award at the ICT Excellence Awards for its VDI-in-a-box project with Rehab Group and National Learning Network.
Back in February, Miller revealed Unity Technology Solutions had won a number of Lync projects in the previous year and expected the trend "to continue in 2012. Given our voice expertise, selling and implementing the Lync solution has been a natural progression for us". Its success in the unified communications space was highlighted when the company won Microsoft Ireland Voice and Unified Communications Partner of the Year 2012 at the Microsoft Worldwide Partner Conference in Toronto. An accolade, Miller notes, that "is awarded to the partner who has demonstrated the highest commitment to quality, innovation and customer service for Lync on multiple complex projects over the last 12 months".
Unified communications and virtualisation continue to be key growth areas. The move towards cloud-based solutions, primarily in the private cloud, the adoption of Office 365, Lync and other business productivity applications "as a service" continue to provide growth opportunities.
Pressure
He sees "significant growth in virtualisation, particularly in application and desktop virtualisation". A Bring Your Own event in June "was hugely positive and demonstrates the potential of that particular market". Miller suggests the pressure on IT departments to address efficiency and cost issues in a bid for competitive advantage will continue to drive growth for the remainder of the year and well in to 2013.
An emphasis on robust, flexible and secure IT infrastructures and a move to the OPEX (operational expenditure) model will also be important as organisations seek to protect their bottom line and change according to demand. The consumerisation of IT is providing "a huge opportunity" with the increasing focus on security, particularly with the proliferation of smart devices and increasing demand for the use of social media in the workplace. Businesses will also place a greater emphasis on adding value through innovation, resulting in an increase in the adoption of cloud services and a greater focus on collaborative tools (like Microsoft Lync) in the workplace.
In common with most other people in the channel, he sees economic uncertainty and the lack of credit as "the biggest obstacles to growth". The lack of finance for capital investment in infrastructure remains a growth inhibitor because "although the OpEx model suits many businesses, it does not suit everyone". Another key issue is the impact emigration is having on companies looking for people to fill particular roles, especially technical one.
He believes channel is coping relatively well in the current circumstances and thinks it will continue to improve "provided the economy doesn’t experience any further downturns". The most important thing for the channel "is to be agile and flexible and to have the ability to adapt to changing customer demands and trends in IT".
The company’s vendors "are providing excellent sales and marketing support and training" and it is working "extremely closely with key vendors like Microsoft, Citrix and our hardware partners". Distributors are also providing "a superb service and excellent support".
As for the rest of 2012, Miller expects it to be challenging "but in a positive way". While pipeline are healthy, "there are always unknown curve balls which we must be prepared for. As a young organisation, we endeavour to respond quickly to changes in the market and we can provide the solutions our customers and prospects need and want, whether it is delivery of a partial or complete IT solution, on premise or from the cloud."
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