Outlook: cloudy with green shoots

Six months ago, Irish Computer asked a number of reseller luminaries for their impressions of the year to date and what they thought the rest of the year would bring. Now we’ve gone back and asked them what actually happened in 2011 and how they think 2012 will shape up.

Andrew Miller, head of sales and marketing, Unity Technology Solutions
As well as winning numerous contracts in the public and private sector and experiencing a strong end to the year, 2011 was a cause for celebration for Unity Technology Solutions because the company also marked its first anniversary in September. Miller says unified communications and virtualisation were key plays for the company in 2011 and will continue to be in 2012. He reveals Unity Technology Solutions already has a healthy pipeline for 2012 and has invested heavily to ensure it has "the best sales and technical resources in the market", recruiting staff into all areas of the organisation over the course of last year.

Another area of growth in 2011 was provided by the move towards cloud-based solutions, primarily in the private cloud. He says the adoption of Office 365, Lync and other business productivity applications "as a service" also provided growth opportunities. Microsoft’s Lync gained traction in the unified communications space. The company won a number of Lync projects in 2011 "and this is a trend we expect to continue in 2012. Given our voice expertise, selling and implementing the Lync solution has been a natural progression for us." There was also significant growth in virtualisation, particularly in application and desktop virtualisation, which Miller describes as "hugely positive and demonstrates the potential of that particular market."

He believes the pressure on IT departments to address efficiency and cost issues in a bid for competitive advantage will drive growth in 2012, as will the consumerisation of IT and the demand for workforce mobility. An emphasis on robust, flexible and secure IT infrastructures and a move to the OpEx model "will be key in 2012 as organisations look to protect their bottom line and change according to demand." He thinks IT security professionals will benefit from the increasing focus on security, particularly due to the proliferation of smart devices and the increasing demand for 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. The biggest obstacles to growth in 2012 are the continued economic uncertainty and the lack of credit. The lack of finance for capital investment in infrastructure "will continue to act as a growth inhibitor. Although the OpEx model suits many businesses, it does not suit everyone," he warns. The impact of emigration will also be felt through a shortage of new talent as graduates continue to leave the country.

As for the channel, it has coped well with the challenges of the past few years and will continue to do so. If the economy does not experience any more downturns, overall channel performance will continue to improve. "The single most important thing for the channel," he states, "is to have the agility and flexibility to change your business model and to adapt to changing customer demands and trends in IT." He predicts 2012 will be "a positive year" for Unity Technology Solutions: "Pipelines are healthy and the organisation has ambitious plans. As a flexible organisation, we can respond quickly to changes in the market and we can provide the solutions that our customers and prospects need and want, whether it is delivery of a partial or complete IT solution, on premise or from the cloud." 

Bob Murray, joint managing director, HETG 
Revenue figures for HETG were up in 2011, Murray reports, but were outshone by the percentage growth in margin. "I think that’s indicative that less people are investing in new hardware and instead they are looking for extended services offerings," he argues. The company invested heavily in its cloud infrastructure as a service (IaaS) offering over in 2011. "With our heritage of supporting the different components of an IaaS environment, the uptake for our solution has been extremely positive," Murray says.

HETG expects to see continued growth in 2012 in areas where it has made the greatest investments in time and money, namely managed cloud and the resourcing division. "So far, the signs for early 2012 are that we will continue to see strong growth in our shared services offerings, as well as a growing demand for the technical contractors we have in our resourcing division," he reveals. As well as a strong presence in Ireland, the resourcing division has contractors placed as far afield as Rome and a couple of international clients are looking for HETG to provide technically skilled multilingual technicians.

Murray expects the main threat to growth to come from uncertainty around the euro and the euro zone. While Ireland has "done an awful lot", it will "continue to have our successes determined by the wider European economy." The reluctance of the banks to lend money, even though they appear well-capitalised, will continue to have an effect on spending on capital items. Companies will look to offset their capital spend by outsourcing more. "Sometimes it strikes me that the advent of cloud technologies coincides nicely with people’s need to defer infrastructure spend," Murray observes.

When it comes to the channel at large, HETG’s shift to new services means its traditional channel competitors "are not on our radar so much anymore," Murray claims. "We see some competition from companies that offer pure cloud solutions and pure resourcing solutions, but we rarely come across a company that offers the breadth of products and services that we offer." The company has been working closely with several manufacturing partners to increase its skills in emerging technologies. It has allocated a larger part of its budget than normal to training and attending manufacturer conferences and seminars this year.

"We have to stay ahead of the curve to give our clients the knowledge and support they require," Murray explains. He predicts 2012 "will be challenging like the previous few years". Ireland will continue to be blighted by uncertainty in the wider European economy, high unemployment and the loss of skills through emigration. But there are opportunities if HETG works harder and smarter.

"I’ve always believed that Ireland is a great country. The Irish are hard workers and know what needs to be done in order to recover from a difficult situation. My instinct is that 2012 will see the beginning of the turning point. But I’m a glass half full kind of person. It helps."

Eoin Goulding, managing director, Integrity Solutions 
Eoin Goulding does not beat about the bush, boasting that 2011 was a "great" year, the company’s "best year ever" from hardware sales to consultancy to managed security. More and more businesses are focusing on security but don’t have the expertise to do it themselves, and are relying on companies like Integrity Solutions to handle it and manage it on their behalf. He says the company has taken on some good new vendors such as Imperva and its web application firewall. "We’ve had massive success with that," Goulding reveals. He also cites machine data analytics specialist Splunk, another area where the company has enjoyed "huge success".

Managed PCI compliance is also proving to be a good space because customers are being forced to secure networks and protect their customers. Goulding claims Integrity Solutions also scores over rivals because it is able to alert customers if a proposed change to a firewall, for example, might affect the network. "We have a procedure, a stringent routine. If the rule change will bring down the network or leave a hole in the network, we won’t do it; we’ll go back and tell them to design it again.

Most of our competitors will just make the change for the customer." Integrity’s security expertise is an important weapon in its armoury. Increased awareness of security issues is prompting companies to tender for managed security, but Goulding argues that it’s obvious they know very little about it from the way the tenders are written. "All they are looking for is a SLA. We give them the SLA and say ‘by the way, we can do this, this and this’."

One big development in 2011 was the decision to invest €150,000 in a training centre to provide SANS certifications. SANS is the largest source for information security training in the world and Goulding claims Integrity Solutions is the only company in Ireland able to offer its courses. The company originally did it to train its own staff more quickly than if they had to go to the UK and get them up to a higher level. Competitors may well have specific vendor certification, but Integrity has accreditations in areas such as Incident Handling from SANS. A one day security awareness course has also had "a huge uptake" from customers.

Looking to 2012, he is concerned that more companies will hold off from spending because of the euro crisis. "There’s a lot more fear out there," he observes. "The euro crisis is having a massive impact on our financial customer base, and we would have a huge financial customer base. The sales cycle is slowing down; it’s taking longer to close deals." Related currency issues could have an effect if the euro suffers against the dollar, making products and licence renewals more expensive because most vendors price in dollars. If a project agreed in 2011 suddenly becomes 20% more expensive because of currency fluctuations, customers may not have the budget to go ahead with it.

Unlike Murray, he does not believe things have hit rock bottom yet, suggesting it may be another two or three years before they do. There could be problems with licences as customers seek to reduce their licensing options in line with reduced staffing levels. Nevertheless, he’s confident Integrity will prosper. "We have a lovely base and recurring revenue all the time. We’re in a good position: we’re a cash rich company."

Kieran McCabe, managing director, Triangle Computer Services 
Kieran McCabe admits that 2011 was a "tough year" but things really picked up in December and the company hit all the targets set at the beginning of the year. "I’m always optimistic," he says, "but that doesn’t make it any easier to run the business. 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 eleven-and-a-half months."

In terms of how the different parts of the business fared, he says the server business "was just holding its own" and the growth, in terms of product, was "all around storage" because of the constant requirement for disk storage in organisations. Because storage is not seen as such an expensive decision, it’s easier to get budget for and it’s not as big a deal to get through the organisation’s approval cycle. And with so many products in the storage arena, customers are looking for some guidance from partners. Triangle is currently involved in a project with HEAnet setting up a cloud compute and storage environment to supply compute and storage power to customers at will. McCabe believes it will make HEAnet one of "the first genuine cloud organisations in the country". He believes there will be more of this kind of work this year.

A big area of focus is with organisations that have implemented some form of virtualisation that are now trying to "release the value from those investments". There are various approaches being taken with some going for an internal cloud or a combination or internal and external. He says this is creating "a big demand for highly skilled architects in the market" as customers are looking for partners to come in and help to guide them with their virtualised environments and to manage them.

"Ultimately, the game seems to be about giving the end user flexibility to provision their own computer and storage resources," McCabe states. Organisations have less and less ability to do this, he adds, so generally speaking when Triangle is doing the implementation, it is being asked to have some managed involvement in it.

While 2011 was Triangle’s third successive year of growth, he does not expect any revenue growth this year. "I don’t think technology projects are going to keep flowing throughout the Irish economy in 2012," he predicts, but Triangle will maintain its profitability with a significant shift towards services. McCabe says he’s expecting "a smoother curve throughout 2012. We’re getting the mix of business better. It should be a bit easier to run the business."

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