Paul Kelly, territory manager, ComputerLinks
Kelly says 2011 has been a good year for ComputerLinks in the UK and Ireland, despite many businesses experiencing tough trading conditions. It hasn’t matched the 30% growth rates of previous years but the trend is still positive.
The distributor has been able to build stronger relationships with partners and grow the business despite the economic climate because companies need to focus on IT and data security, and to improve efficiency and return on investment (ROI) via emerging technologies such as cloud and virtualisation.
Kelly highlights the ALVEA Services cloud and managed services portfolio launched in the Irish market this year, claiming the aggregated set of technologies and services offers a low risk and fast return option for partners to enter the market. ComputerLinks has also added technologies from Gigamon, Ericom and Pillar and expanded its business continuity proposition with an exclusive agreement to distribute Restorepoint.
The distributor has also enhanced its virtualisation presence to capitalise on the growth fuelled by cost-savings, environmental drivers and productivity gains. The continuing economic uncertainty is hindering growth but there is a plus side for resellers because customers are looking for low risk options from trusted partners to address on-going skills shortages and the opportunities around cloud computing. Kelly believes the channel’s expertise can help to address these fears, break down the barriers and help businesses to grow, "albeit cautiously".
As for the channel’s overall health, Kelly says there are plenty of examples of channel businesses failing, but most are holding up well – particularly those businesses that have been able to draw on their IT security skills.
Many vendors suffering from the same harsh economic conditions as the rest of the channel have cut back on marketing activities and reduced their local presence, making distributors’ abilities to act as local channel partners capable of responding quickly to resellers’ needs even more important.
Kelly believes the next six months are "critical" for the channel. More fatalities, he says, are inevitable, along with further consolidation as the big players buy into new markets. When it comes to 2012, organisations will be seeking to rationalise supplier relationships and reduce costs, "which makes the role of IT services providers even more important".
Michael O’Hara, managing director, Data Solutions
O’Hara describes 2011 as a "developmental year" that isn’t "setting the world on fire". Last year was strong for Data Solutions with a lot of projects closing, but a tough start to 2011 in the wake of December 2010’s big budget had people and businesses watching their pennies. The second half has been better and the "orders are coming in" with the level of quotes to opportunities a lot stronger. People are "starting to loosen the purse strings", he adds. Compared to 2010, there are some areas that are up but also others which remain flat.
O’Hara says IT is in a better position than a lot of other industries because even if the economy stands still, IT still moves forward. "Every year, businesses depend more on IT… It’s probably one of the better industries to be in."
For 2011, Data Solutions has placed a big focus on growth in the mobility and cloud spaces with vendors such as wireless network specialist Aruba Networks. It has also launched its own cloud services under the brand of Silverline.ie, developed in partnership with Fort Technologies. O’Hara stresses it’s an Irish service that offers infrastructure as a service (IaaS), allowing channel partners to design a back office IT environment online and build it within 30 minutes in a drag and drop manner, and to bill customers on a monthly basis.
"The server is being built in the cloud but you still have to implement the solution, you still have the same number of service days. Today, you probably have to wait six or seven weeks for the server to be ready but [with Silverline] you can commission the server to be ready in a matter of hours with high availability and it’s more secure."
He accepts there is still nervousness about the cloud, but that everyone accepts it’s going to happen. "We are a channel company. Everybody knows us and trusts us. I think we have a good model to take to the cloud." O’Hara says resellers are "better off grasping that now and being a part of it", adding that a large majority of technology vendors will need an implementer to build the infrastructure even if it’s in the cloud.
With a lot of vendors struggling to get cloud offerings out to the market, he stresses the reseller’s role as trusted adviser is not only very important to the customer, but also to the vendor. "If the channel is not comfortable [with the cloud offering], then the vendor is struggling."
The distributor is also seeing a lot of desktop virtualisation projects kicking off with the knock-on effect of strong growth in thin clients for VMware or Citrix projects. Wyse, for example, has enjoyed "phenomenal growth" as people overcome "the mental block that they need a PC on their desk – the PC mentality is starting to wane". In common with most others, he views the economic situation as a potential threat to growth.
While Ireland "does seem to have grasped the nettle better than other countries in Europe, my concern would be if the euro project collapsed". Looking at the rest of 2011, O’Hara says "the smoke signals are strong and positive" and thinks there will be an end of year bounce, although there is the prospect of another tough budget in December. "It’s been a reasonable year," O’Hara concludes.
Rory Wilson, managing director, Microwarehouse
Overall, the channel has coped really well in a tough market, Wilson says, and resellers have adapted well by cutting costs, trading through credit issues with the banks and keeping close to their customers. Things have been reasonably flat year-on-year but there is activity on the business side, even if the consumer sector is more challenging. While it’s tough, Microwarehouse probably has less exposure than others in that area.
Obviously Apple is doing well in consumer, but Nikon digital cameras are also selling surprisingly well. Kodak’s recently launched printer range is another potentially interesting development. It has done very well in the UK with a proposition based on a slightly higher upfront cost for the printer but considerably cheaper ink refills, resulting in lower running costs.
The big vendors are very active, Wilson adds, highlighting Microsoft’s recent appointment of Microwarehouse as the vendor’s first value added distributor (VAD) in Ireland to help drive reseller awareness, capability and product knowledge of the vendor’s virtualisation and security solutions.
Epson, which is doing well with sales of interactive projectors into the education market, has just introduced a new range of business printers, Toshiba has increased its investment in Ireland and Symantec has introduced a new partner programme.
As for threats, Wilson highlights the shortage of skills, especially in areas such as virtualisation. "There’s a need for more people in the market," he says. Another possible challenge is presented by the retrenchment of vendors and distributors back to the UK because it’s taking the decision makers further from the local market. Besides, if vendors do move resource back to the UK, it presents opportunities for local distributors.
As for 2011, he feels fairly confident. "There’s a fair bit of innovation out there," Wilson states. "There are new programmes and products, so there is no reason not to be optimistic. It looks good, the channel is in good strength and the vendors are very active."
Catherine Daly, marketing manager, Avnet Technology Solutions
Avnet Technology Services (ATS) has had a very busy year so far in 2011. Following the acquisition of Bell Micro last year, the integration of the two companies at a local level continued into 2011. Daly says the process is now complete and it is focused on becoming "the leading enterprise/data centre focused distributor in the Irish market". Business has been "challenging but OK so far this year" with server and storage revenues holding up well.
ATS has strengthened its storage portfolio by signing a distribution contract with NetApp and the HP networking business is growing strongly. Daly adds ATS also has the opportunity to add new vendors. As for potential threats, she points to the impact on the export economy of any upheaval in the European or global economy. There is also the effect on the domestic economy of changes in government spending. Just for good measure, there’s the continuing issue of credit.
Looking forward, she’s "reasonably upbeat" about the fourth quarter on the basis of a pick up in activity levels last month. While the global economy and December’s budget will have a big impact on 2012, Daly is "cautiously optimistic".
John Mooney, country manager, Cohort Technology
Mooney isn’t in a position to make comparisons with 2010 as this is Cohort’s first year, but he thinks the company is "doing pretty well". He says the distributor has "a good set of solutions" focused primarily on security. Vendors include Stonegate, Symantec and IronKey. He singles out ForeScout, a provider of network access control, because of its relevance in a world where people are seeking to connect to company networks with iPhones, BlackBerry handsets and iPads.
A new product is PINsafe, from Swivel Secure, a tokenless multi-factor authentication solution, which is doing "reasonably well" as people begin to look at it more seriously. Security is a good area to be in, he says, because it’s high on the agenda for a lot of companies.
In terms of opportunities for growth, one product area which is slightly outside the distributor’s core focus is NComputing, a virtual desktop solution competing against the likes of Citrix, which is proving very popular in the education market. Mooney says part of the attraction is that there are no set up costs or pilot costs, so the cost of implementation is minimal.
As for threats, tight budgets are proving a problem, especially as they discourage companies and partners from exploring new ideas in favour of "bedding down with what they have".
He thinks the channel overall is doing reasonably. While up to 80% of companies are sticking to what they have, 20% of them are "devouring new technology" and those are the ones Cohort is focusing on.
The cloud is presenting a challenge with a lot of confusion in the channel over how to make money out of it. "They’re worried about how it will progress over the next year or so," especially with the temptation for vendors to go direct, "but the only way around it is to get heavily involved in offering services through the cloud". Taking a positive view, Mooney says the cloud is "such a big area there’s going to be work for partners. They just have to find their niche, their area of expertise and work on that. The earlier the better," he warns.
Looking at the rest of the year and into 2012, Mooney reveals there is quite a lot in the pipeline but the question is whether it will materialise or not. The budget could constrain and inhibit people from making positive decisions but he still has a "good feeling" about things overall: "Companies have to survive, progress and expand. This year has been difficult but there is a lot of tangible stuff to work on."
Conor McGrogan, regional business manager, Steljes
Business has "definitely been a lot more difficult" this year, McGrogan observes, although it has been "a good year so far". There’s been a lack of funding in schools and businesses have also been careful about spending their money but Steljes has continued to grow its portfolio.
While the distributor is synonymous with Smart Technologies, he is at pains to point out it does have a lot of other products in its portfolio and of which it’s trying to make partners aware. He highlights, for example, its partnership with NEC for projectors, the fact it also distributes digital signage products and visualisers from AVerMedia.
Steljes recently relocated to larger offices in Baldonnell Business Park where it has the full range of products on site for partners to demonstrate to their customers. "They can avail of it free of charge," McGrogan says. "It definitely beats trying to do a demo in your kitchen."
In terms of opportunities for growth Steljes is looking at data storage, particularly in schools, although there is an opportunity in business as well. "We’re in discussions at the moment," he reveals, [with a vendor that mostly manufactures product in Ireland] "and we’re close to agreeing a contract. We see a space in the market for that."
Another area is the Smart Meetings collaboration suite, which allows businesses to share data in real time, save it and distribute notes to people attending the meeting. McGrogan says there has been a lot of interest from large multinationals. It’s important to add more products, he adds, because "if you don’t have the products in the shop, people won’t come in in the first place".
In terms of threats, he cites the uncertainty in the market as the dominant concern. A measure of stability in the economy makes people comfortable with what they’re doing and gives them more awareness of where they are going. At the moment, the lack of cash in the market is making it a price dominated industry. Things are difficult for resellers. Steljes may have to drop some partners as it broadens its portfolio because they may not have the expertise for it’s looking towards.
At the same time, it has a loyal band of channel partners that have been with the distributor since the beginning. Steljes wants to remain tightly focused on a small number of products, probably no more than 15. "A lot of distributors have so many products that when somebody asks them about a specific product, they can’t answer the question," he claims. The market is likely to "continue to be difficult" for the rest of the year but Steljes will "fight harder to find deals".
People are shopping around more but the deals are there and companies that have the right portfolio and support in place will continue to do well. McGrogan believes 2011 will be the most difficult year of all and growth will be flat, but he thinks things will start to pick up in 2012.
Macdara Wrynne, managing director & Martin Butler, sales and marketing manager, Direct Distribution
The first half of 2011 has been "really positive" for Direct Distribution and the second half is looking good so far, according to Butler. The company has taken on staff over the year to ensure it remains customer-centric and focuses on areas that provide resellers with the best opportunity for growth. One of the main growth areas has been in supplying servers and upgrade options for data centres, which he anticipates will present a "huge opportunity" going forward as cloud computing helps to drive further growth in data centres.
Flexibility in its approach to resellers is also proving fruitful. Resellers are "very receptive to our pro-active approach… instead of forcing inflexible terms on resellers we are working with them," Butler claims. Offering end to end solution design gives resellers peace of mind, Wrynne adds, and the distributor tries to make it easy for them to do business with its "can-do" attitude. Direct Distribution is positive for the rest of the year based on a good pipeline of business.
Wrynne reveals the company is "in negotiations with vendors to launch new product offerings in the coming six months" and Butler adds that "with the new initiatives and vendor relationships coming onboard, we feel 2012 will be a good year for Direct Distribution".
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