Channel looks to beat

Print

PrintPrint
Trade

Read More:

11 January 2012 | 0

As we draw towards the end of 2012, Irish Computer decided to ask a number of distributors for their view on how the year has gone so far, how they think it will end and what the prospects are for 2013.

Andy Dow, marketing director, Computer 2000
It’s been a tough year so far in Ireland, Dow says, but the distributor is "pleased with the progress we are making". Computer 2000, according to marketing director Andy Dow, is continuing to grow its partner base and market share is growing on the back of "competitive pricing and the value added services that we are delivering to the channel".

The distributor’s recent annual reseller training weekend was well attended, providing an opportunity to deliver value added training and a chance for resellers and vendors to network.

Dow identifies enterprise and software as two big areas for opportunity and growth. "They seem to weather the financial situation very well," he remarks.

He expects 2012 to be "a hard year" overall but changes in the industry, such as the launch of Windows 8 and the introduction of new hardware to exploit the new user interface will "give the user an opportunity to drive efficiency and for the channel to build valued business solutions".

Dow says the industry needs to "use all the tools at our disposal" in terms of hardware, software and virtualware, to drive customer efficiency by delivering business solutions. "Computer 2000 is committed to helping the channel piece these together by offering pre- and post- sales support where it is required," he concludes.

Paul Kelly, country manager, COMPUTERLINKS
While 2012 started well with revenue slightly up and more additions to the distributor’s portfolio, the third quarter was "quieter than anticipated" with a number of projects slipping but country manager Paul Kelly is anticipating a much stronger fourth quarter. The company is holding its own in the market and increasing the areas of opportunity for Irish resellers by adding to its product portfolio.

Demand for cloud and managed services is gaining momentum and COMPUTERLINKS has extended its ALVEA Services portfolio for partners with managed security gateway and managed DNS services. The recently launched ALVEA Services Cloud Connect partner programme has been designed to provide resellers with sales, market and technical support to kick-start cloud sales. The ALVEA Infrastructure service provides ‘pay as you go’ cloud computing from an EU-based data centre.

The distributor recently added a number of vendors to help resellers exploit the trend for wireless LAN and to help customers simplify management of the technology solutions within next generation data centres.

The tough economic climate and squeezed IT budgets are significant inhibitors to growth, Kelly observes, with many projects slipping from one quarter to the next "which can make planning more challenging". Concerns around the security of cloud computing are also acting as a barrier to adoption of cloud services, making it essential channel partners work with organisations to reduce those fears.

Despite the difficult economic conditions, Kelly says, the channel is performing well overall and continuing to develop its presence in the SME space as cloud and managed services make it possible to provide outsourced technology solutions for smaller organisations that may not have the means to support a large IT department via the channel.

Looking forward, he says the fourth quarter has started well and some of the projects postponed in the previous quarter are now being rolled out. "We envisage a better Q4 for COMPUTERLINKS and a strong end to the year," Kelly states. "We expect 2013 to continue to be tough given the climate but are still expecting some growth on 2012 stemming from new technologies and our ALVEA Service portfolio gaining more traction."

Peadar Kane, country manager, Avnet Technology Services
The year to date "has been surprisingly good", says Avnet country manager Peadar Kane. While the summer was a little quiet "we are seeing a pick-up in activity again for the last calendar quarter".

He expects the main areas of opportunity and growth to come from the distributor’s "core areas of storage, server, software and networking products". Virtualisation has become another growth area since Avnet began distributing VMware at the beginning of 2012. Kane describes it as "an excellent addition to our portfolio".

The recent acquisition of pan-European data centre solutions and services distributor Magirus may also present some opportunities. While Magirus did not have a presence in the Irish market, "the acquisition may give us access to new vendors in the future to further enhance the value we provide to our customers and suppliers".

Like everyone else, he thinks the economic situation is a threat to growth but also cites the availability (or non-availability) of credit. "These will remain issues for the foreseeable future but we are doing our best to support partners where we can. Avnet’s global reach, financial strength and strong supplier relationships are key to our successful relationships in the channel," Kane says.

Despite the economic situation, the channel "is performing very well". Kane believes the IT industry "will help the country out of the trouble that it is in at the moment". But he cautions that the government needs to promote and support growth in IT by ensuring large multinationals maintain a presence here and that the education system is producing skilled IT talent to compete with other markets.

Looking ahead, he reports that the fourth quarter is "looking pretty good" so far and he is "cautiously optimistic about 2013".

Michael O’Hara, managing director, Data Solutions
It’s been a good year so far with increased revenues for all Data Solutions’ key vendors. Managing Director Michael O’Hara says that’s an interesting trend because in other years there has always been one vendor on the wane for one reason or another.

Why are things different this time around? Probably because the distributor has a lot of "good technology that’s in demand". Virtualisation (Citrix) and security (Check Point) are still growth markets and its involvement in wireless with Aruba is generating tremendous interest from the channel. Another strong area is thin clients with Wyse. Although the vendor was acquired by Dell, nothing has changed in terms of channel focus.

Data Solutions has also become Symantec’s sole Irish security distributor, O’Hara adds, which presents "a good opportunity going into the next year".

On the Citrix side, the vendor’s VDI-in-a-box is bringing more and more new partners into its channel. The barriers to entry aren’t as high for VDI-in-a-box as they are for other Citrix products and the technology "isn’t as complicated". Data Solutions is starting a campaign aimed at non-Citrix partners that might have been deterred by the cost factor and technology investment required by using VDI-in-a-box as an opportunity for them to sell Citrix.

O’Hara says the big inhibitor to growth is FUD (fear, uncertainty and doubt). How confident are people that the economy will improve? Will customers’ business continue to develop? He’s still concerned about the euro situation, although he thinks we have reached a point where we "seem to be able to truck along".

The channel seems to have adjusted well to the new economic reality. O’Hara believes IT companies learned their lessons from the dot com collapse and this time around they have been very quick to tailor their businesses to the conditions. "They’ve managed their way through the situation that we’re in and I think they’re holding their own out there," he observes.

O’Hara expects a strong close to the fourth quarter but predicts things could "deflate a little" in the wake of a tough budget in December. To counter that, he is very hopeful Symantec "will open up some new revenue opportunities for us".

Conor McGrogan, managing director, Steljes Ireland
Steljes MD Conor McGrogan describes 2012 as "a challenging year, but one where we have made strides into the corporate market and are starting to reap the rewards".

The distributor recently introduced a specialist products division to complement its existing portfolio and capitalise on the lucrative Pro AV market place, something McGrogan labels as "a natural extension to our portfolio". The division focuses on core AV connectivity solutions such as signal conversion products, switching and distribution solutions, integrating cloud based digital signage with social media networks and custom built solutions for video walls for retail and command and control environments.

While Steljes is well known for selling the front end of a solution such as interactive whiteboards, projectors and displays, the specialist products division will provide resellers with sales support, technical expertise and products to offer the complete solution, helping them increase their "share of wallet" with customers.

From Steljes’ point of view, there have also been some fairly significant product announcements from SMART this year, particularly support for Microsoft Lync in its interactive whiteboards and displays.

In terms of opportunity, McGrogran cites the "high proportion of world-renowned blue chip companies" with European headquarters in Ireland. "This is an ideal target market for our corporate solutions," he argues, "and great news for our channel partners looking to diversify their portfolio."

Convincing people to invest in new ideas and technologies can be hard, he accepts, "and the combination of a global recession and uncertainty of Ireland’s ability to pay its EC debt can make it harder". But McGrogan suggests customers can be receptive to messages around ROI, pointing to what he claims is a 12-month return on investment (ROI) from deploying SMART Freestorm collaborative solutions.

He says the channel is "starting to embrace the opportunities selling into the lucrative corporate market brings". The engagement model is slightly different from the traditional education market as corporate organisations require "a consultative approach rather than the traditional box shifting way of working". But a consultative approach "encourages long term relationships, resulting in repeat business from the end customer".
The fourth quarter is traditionally a quieter period for Steljes but McGrogan is "cautiously optimistic" because the distributor has made good inroads into the business market and generated a healthy pipeline in that sector.

Michael Conway, director, Renaissance
Conway says the Irish channel is very similar to the wider Irish economy: "There is plenty of activity but not a lot of money. People are very very busy, and there are lots of opportunities but probably not that many decisions. There are not that many people spending money."

Nevertheless, people are being forced to make some investment after putting it off over the last couple of years, even if it is being held back for budgetary reasons.

One area he identifies as a good opportunity is in the consolidation of point solutions into single unified threat management devices. Customers are starting to release some budget to consolidate their security solutions in a single device that could offer some savings and give them lower cost of ownership. He cites the example of an organisation that consolidated a number of point solutions such as anti-virus and encryption with the Sophos EndPoint Suite.

"The big opportunity is the consolidation of point solutions to deliver more integrated solutions with consequent savings," Conway argues. "That’s where the technology is going and where the vendors are moving to."

The BYOD and mobile home worker trends are also likely to drive opportunities. As employees bring more devices onto the network, businesses will need to look at a situation where they potentially have twice as many devices on the network. Security is an issue they need to address and something they will "have to sort out". Conway says: "We’re seeing a proliferation of different devices that weren’t there pre-recession but a lot of the security infrastructure was" and it will need to be brought up to date.

Meanwhile, trade is very tight and cash-flow is a big challenge for businesses in Ireland. "With margins being tight, some resellers are finding it hard to make any kind of sustainable profit," Conway says. "It’s really important to have a sustainable channel and supply chain."

He believes the channel "is suffering" in a tough market where it is hard for traditional resellers to make margins and make money. Renaissance’s role is to help them provide solutions that deliver a higher level of service at a relatively reduced cost. "We aim to deliver margin into their business at a time when the channel is under pressure and the economy is under pressure."

Partners are struggling to make a profit and are having to make sure they manage credit and ensure they get paid. It’s difficult when Ireland doesn’t have a sustainable banking system, Conway complains. The banks are merely collecting debt and paying back the bondholders, a process which he labels "dysfunctional".

As for 2013, he predicts the first quarter "will be quite decent", helped by the fact that business which doesn’t close this quarter will be pushed into the first three months of next year.

Read More:



Leave a Reply

Back to Top ↑