Six months ago, Irish Computer asked a number of distributor luminaries for their impressions of 2011 and what they thought the rest of the year would bring. Now we’ve gone back and asked them what actually happened and how they think 2012 will shape up.
Michael O’Hara, managing director, Data Solutions
Last time around, Michael O’Hara of Data Solutions said the distributor was hoping for a strong close to 2011 and that’s exactly what happened, particularly in the public sector, he adds, probably because if the departments didn’t spend the money, they’d lose it.
A lot of deals that were being worked on over the year got completed in the last quarter of 2011, so much so that a graph of government business in 2011 would look like a hockey stick with most of the business geared to the end of the year. Something similar is happening on a quarterly basis with vendors as they tend to put a big push on in the third month of any quarter.
The last quarter of 2011 was "remarkable in government for desktop virtualisation", O’Hara notes. Of course, 2010 was supposed to be the year of desktop virtualisation but it didn’t happen and even in 2011, it only really kicked in towards the end of the year, but it did so quite strongly in government and corporates.
He thinks bring your own device (BYOD) will be a big trend for 2012. A recent recruit, for example, brought in his own tablet to work and most internal management meetings tend to have two or three people using tablets too. "This is the way people want to communicate," O’Hara argues. Tablets, however, will bring their own issues in terms of security and control.
Data Solutions is starting to see a lot of interest in Citrix’s VDI-in-a-box product. "It’s a great solution, it’s very simple, and it’s probably ideal for the Irish market. It’s very cost-effective: Citrix claims it can replace a PC with virtual desktop, including a thin client, for EUR*400 per user."
O’Hara compares the current situation to a Saturday in a golf tournament, often referred to as the ‘moving day’ because that’s when the contenders start to make their charge. As far as O’Hara is concerned, "2012 is a moving year for the IT industry in Ireland".
Looking at the threats, he points to the situation in the euro zone, although he believes people have become hardened to it now. "We’ve had a few years of hardship and we expect that to continue," he says. In addition, O’Hara argues there’s a refreshing positivity in the channel. "Yes, times are tough, times are challenging, and the usual issues are there but there’s kind of a quiet confidence there which is refreshing," he adds.
While he can’t predict phenomenal growth in 2012, O’Hara believes it will be a solid year and the future looks good.
John Mooney, country manager, Cohort Technology
Considering Cohort Technology’s position as a relative newcomer and the current business climate, country manager John Mooney believes it did well in 2011 in the south and north of Ireland as well as continuing to grow in the UK. He offers a "sincere thanks" to all the distributor’s channel partners for their help over the past year.
"It’s tough out there," Mooney admits, "companies are having a hard time and they are taking a harder look at their purchasing options. Our aim was to develop strong relationships with our vendors and partners and negotiate our way to good business. The good news is Cohort is fortunate in having a strong portfolio."
The distributor was "very positive about 2011" and is "even more so" for 2012 following some good wins in the last quarter.
Among the highlights is the launch of its Empower service that gives resellers the option of providing a managed security service to customers without having to source it themselves.
In terms of growth opportunities, he thinks areas such as network access control, authentication and data filtering and analysis will keep resellers busy over the coming years.
There are also new dangers emerging relating to IT security, especially with the adoption of cloud computing which brings with it big data, mobility, social media; authentication and BYOD (bring your own device), all areas that need to be addressed and secured.
Small businesses are potentially more at risk, he argues. While cyber criminals tend to target the big fish, they might also take the path of least resistance by aiming at smaller cloud storage providers that may not be in a position to provide the same level of security as major enterprises.
The difficult economic conditions continue to present a threat to growth. "I don’t believe the difficult economic conditions have lessened all that much over the past six months and we may have to accept that the next six months will be similar," Mooney admits. This is likely to slow down the purchasing process although it might also "focus people’s attention on making smarter decisions".
He thinks the channel companies are "holding their own" and some are beginning to shine by concentrating on the security aspects of the business. He cautions that there seems to be less in-house technical training happening, "presumably because of economics but I would urge partners to look closely at this for their future success". For their part, vendors are doing a good job of supporting Cohort and helping resellers to win business.
He has "good feelings" for the next quarter and the rest of the year. "We’re happy to partner with people who are working hard to protect their business and hoping to attract more partners from around Ireland over the coming year," Mooney concludes.
Paul Kelly, country manager, Computerlinks
Despite challenging trading conditions, which the channel is still experiencing, 2011 was a good year for Computerlinks in Ireland, Kelly says. And although tighter IT budgets are squeezing margins, there are still opportunities for the channel to grow as organisations get to grips with new technologies on offer.
So far in 2012, revenues at the distributor are up slightly which he argues suggests it is "performing ahead of our competitors". He attributes this to the extra focus it has given its best-selling products while taking on "new and innovative vendors". Some competitors have been losing distribution rights just as Computerlinks expands its own portfolio which is "putting us slightly ahead of the curve".
In terms of successes, the hype around cloud is turning into reality and significantly more organisations are adopting cloud and managed services, particularly in government, finance, healthcare, education and retail.
He says the addition to Alvea authentication to its Alvea cloud and managed services portfolio in October is also significant. "With Technavio forecasting the global two-factor authentication market to grow by 20.8% between 2010-2014, Alvea has given the channel a risk-free way to enter this market," Kelly argues.
The emergence of the next generation data centre emerge as organisations look to understand and exploit new technology options around virtualisation, performance management, WAN optimisation and desktop management, is also presenting opportunities. As is the consumerisation of IT which is influencing enterprises in their choice of mobile devices and presenting challenges around security and compliance.
In response to these market developments, Computerlinks has introduced a number of technologies from vendors such as Extrahop, Efficient IP, Tufin, Sourcefire and Aerohive.
Squeezed IT budgets and economic caution are constant threats to growth, as is a lack of understanding of how new and emerging technologies can work together to deliver the business benefits organisations are looking for. The "ever-increasing complexity of the technology landscape" is also making it difficult for IT departments to cover all the bases when it comes to implementing the latest technologies.
To help overcome these challenges, the channel needs to provide customers with support and technical expertise. Backed by trusted channel partners, organisations will be able to exploit emerging technologies to deliver better results back to the business.
He reports that the channel "is holding its own in a very price-sensitive market". Leading vendors in the enterprise space have reacted to demand for competitive solutions for the SME sector, helping partners to create new opportunities in the SME space in difficult trading conditions.
In terms of vendor support, Kelly says that value added services provided by the likes of Computerlinks have become even more important in the wake of a number of vendors withdrawing direct support here. While this could be seen as a negative development "it has been an area of opportunity for distributors that have a strong presence both locally and globally". Computerlinks has filled the void left by vendors by increasing its levels of expertise in Ireland, gaining an even stronger market share.
As for 2012, Kelly says the "ever-increasing hunger for new technology and new ways of working", coupled with a growing need to manage security and compliance effectively, will help "provide opportunities for the channel to enable organisations to implement new technologies efficiently with minimum risk".
Conor McGrogan, sales director, Steljes Ireland
2011 was a good year for Steljes Ireland, reports sales director Conor McGrogan: "We managed to achieve our expectations in what continues to be a difficult market." The distributor’s second quarter in 2012 (calendar Q1) got off to a slow start but orders picked up significantly in February and there is "a healthy pipeline" for the rest of the year. A lot of recent orders have come from the business sector, helping the distributor move away from too much reliance on the "saturated education sector".
McGrogan believes Steljes is "performing very well in the current climate". The distributor is constantly evaluating and bringing new technologies to the market and also plans to hire extra staff this year "to help us serve and understand our customers’ requirements even better".
It has recently established a specialised AV division to offer specialised custom solutions such as large touch video walls as well as a system that enables touch and navigation of a menu through a glass window, such as in a car showroom or a betting shop.
McGrogan sees significant opportunity in its SMART business solutions because they offer tangible benefits to customers in terms of reduced travel time/costs and more effective meetings. Later this year, he reveals, it will roll out the SRAP programme (SMART reseller accreditation program) for resellers that wish to sell SMART business solutions into the Irish market. "This will be a globally recognised certification," he adds.
He predicts "significant announcements from large global vendors" integrating SMART business solutions into their own technologies later in the year, to offer a unique proposition within the marketplace. "This will allow SMART to seamlessly integrate with other third parties," he claims. "We believe that this will be of particular interest to larger resellers that have experience in system integration, networks and video conferencing."
McGrogan also highlights the AVercom video conferencing solution as a "perfect fit" for the SMB market because it can be used as a standalone solution or integrate into a larger system and "comes with all the functionality and features at a very affordable price".
The biggest threat to growth is the availability of credit which is having an effect on distributors and their customers. Austerity measures are also creating a lot of uncertainty and affecting purchasing considerations, although he adds that "much of what we do is very relevant in the current climate, such as reducing travel costs".
The channel is performing reasonably well and Steljes has "signed up a significant number of new partners in recent months mostly focussed on non-education sectors".
He is satisfied with the support provided by vendors in terms of marketing and pricing.
Looking forward, McGrogan is "optimistic for the rest of the year given an exciting roadmap of new products and a healthy pipeline for business".
Sean Holohan, managing director, Videnda
On the whole, Holohan says Videnda was happy with its performance in 2011 with turnover up more than 10% on 2010. It is growing compared to the overall market, he claims, because of the areas it is focused on. VoIP and video conferencing are gaining traction because they can bring "significant cost savings to businesses and organisations". It helps both are still in their early years of adoption, leaving plenty of potential for future growth. He says unified communications solutions from Polycom and Microsoft (MS Lync) are attractive because they can help companies and organisations provide employees "with the best collaboration technology, regardless of location".
On the surveillance side of the business, Videnda is "experiencing significant growth". IP surveillance technology has matured and offers massive benefits over traditional analogue CCTV, in terms of resolution and applications.
This has been backed up by ipvm.com in a recent report which states: "In the last year, for new projects in the US and Europe, it has become clear that IP camera sales are outpacing analogue sales. Among enterprise projects, IP’s predominance is [clear]… with more than 75% of new projects going with IP."
On the video conferencing side, mobile applications are becoming popular with people using iPads and Android tablets with Polycom and Vidyo clients. Videnda has also witnesses "sizeable growth in small to medium organisations looking to implement VoIP and video conferencing solutions". Many are using Videnda’s finance programs to minimise the upfront investment required.
On the surveillance side of the business, the distributor has developed its own NVR (network video recorder), the Minotaur Server. Holohan describes it as "a huge success in Ireland to date", and there are plans for expansion to the UK and rest of Europe in the near future.
He believes all three business segments have potential for significant growth, despite the wider economic problems, in line with independently produced market research. According to IDC, the adoption of enterprise video conferencing and telepresence is accelerating. The market grew 20.5% to reach $2.7 billion in 2011. And according to ipvm.com‘s Video Surveillance Guide 2012, global IP camera sales increased 30%.
In common with other distributors, he feels the main threats are the overall economic uncertainty, lack of investment from government, and uncertainty surrounding the euro. All these circumstances combine to delay investment in the latest technology, "despite the fact such technology can often create cost savings, allowing organisations to perform better and grow".
Looking to the channel’s performance, he says larger resellers are doing well, "but some of the smaller ones are finding things difficult".
As for 2012, Videnda’s turnover "is well up on the same period of last year", but he cautions "there is an issue with confidence throughout the country" which has resulted in projects taking a longer time to close. Nevertheless, the distributor expects "to finish the year with good growth on 2011".
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