Dis­trib­u­tors will be more rel­e­vant

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BYJU PIL­LAI Pres­i­dent In­flow Tech­nolo­gies

The year 2013 was an in­ter­est­ing year for the in­dus­try. With new dis­rup­tive tech­nolo­gies emerg­ing and some older op­por­tu­ni­ties fad­ing, the in­dus­try is chang­ing very quickly.

For chan­nel part­ners keen to ex­pand there is no short­age of op­por­tu­nity. How­ever, while growth is not a con­straint, prof­itabil­ity re­mains one for many part­ners and dis­trib­u­tors.

In the com­ing days prof­itabil­ity and cash-flow should be the key fac­tors that drive the busi­ness, and ev­ery­one in the sup­ply chain should fo­cus on them.

Pri­vate clouds are not re­ally chang­ing any­thing for ei­ther the SI or dis­trib­u­tor. It’s busi­ness as usual. In In­dia, pub­lic cloud com­put­ing is still a few years away from mass adop­tion be­cause the cost-ben­e­fit of a pub­lic cloud does not fit in with our cost equa­tions since we have abun­dant man­power re­sources at rea­son­able cost.

Se­cu­rity and stor­age

One of the big­gest op­por­tu­ni­ties for chan­nels is in nextgen­er­a­tion se­cu­rity so­lu­tions. We have al­ready seen cus­tomers look­ing at projects to roll out Web ap­pli­ca­tion fire­walls as well as next-gen­er­a­tion fire­walls.

Phys­i­cal se­cu­rity and con­verged se­cu­rity are other ar­eas which part­ners should fo­cus on. Sur­veil­lance-re­lated projects would be some of the most prof­itable in the next few years.

Many en­ter­prises have in­vested in stor­age and will con­tinue to do so. Stor­age man­age­ment that en­com­passes tech­nolo­gies such as vir­tu­al­iza­tion, repli­ca­tion, mir­ror­ing, se­cu­rity, com­pres­sion, traf­fic anal­y­sis, process au­to­ma­tion and stor­age pro­vi­sion­ing of­fers other op­por­tu­ni­ties for part­ners. These re­quire part­ners to work with value-added dis­trib­u­tors like us.

As­sess­ment and au­dits

An­other op­por­tu­nity is in as­sess­ment and au­dits. Se­cu­rity as­sess­ment is the process of iden­ti­fy­ing threats, vul­ner­a­bil­i­ties and risks pre­vail­ing in an or­ga­ni­za­tion’s IT en­vi­ron­ment in or­der to min­i­mize risks.

A key el­e­ment of good se­cu­rity man­age­ment is reg­u­lar and struc­tured eval­u­a­tion of com­pli­ance with se­cu­rity poli­cies, stan­dards, guide­lines and pro­ce­dures. Part­ners have great op­por­tu­ni­ties be­cause cus­tomer or­ga­ni­za­tions must en­sure that con­trol mea­sures are ap­pro­pri­ate and that they op­er­ate as de­signed.

As cus­tomer or­ga­ni­za­tions ma­ture in their con­trol pos­ture, they grad­u­ate to the process of es­tab­lish­ing a for­mal IT and in­fosec gov­er­nance frame­work and sup­port

While some in­ter­me­di­aries are be­ing elim­i­nated in the con­sumer tech­nol­ogy dis­tri­bu­tion, ven­dors and chan­nels will re­quire value added dis­trib­u­tors in the era of cloud com­put­ing

it with for­mal mea­sure­ment and reporting ad­dress­ing the de­gree of gov­er­nance ma­tu­rity. This will cre­ate yet an­other wave of ser­vices that could be out­sourced.

Project-based ap­proach

Part­ners look­ing at growth need to move out of the trans­ac­tion mode and eye projects. They can def­i­nitely scale this model if they can build very strong prac­tices and pro­cesses. The big­gest chal­lenge is choos­ing the right projects to chase. Many projects, es­pe­cially in the govern­ment sec­tor, have landed in pay­ment de­lays for var­i­ous rea­sons. We need to learn on a daily ba­sis to im­prove our pro­cesses. We also need to de­velop due dili­gence cri­te­ria and ser­vices ca­pa­bil­i­ties to ad­dress more prospects with lesser risks.

Fu­ture of dis­tri­bu­tion

While in some con­sumer-based dis­tri­bu­tion mod­els we have seen in­ter­me­di­aries be­ing elim­i­nated, value-added dis­tri­bu­tion mod­els will con­tinue to grow at healthy rates. We be­lieve that dis­trib­u­tors will con­tinue to be an in­te­gral part of the sup­ply chain sys­tem across all SMB and en­ter­prise businesses, and will be ir­re­place­able for al­most all IT ven­dors. While the cloud is dis­rup­tive to some of the busi­ness prac­tices, chan­nels will want dis­trib­u­tors to hand-hold them and help them build a so­lu­tion.

There is talk of con­sol­i­da­tion among dis­trib­u­tors na­tion­ally. We be­lieve that some dis­trib­u­tors would be open to a buy-out if of­fered a fair price. I be­lieve a ball­park fig­ure would be 25-30 per­cent of the an­nual turnover for a VAD and 15-20 per­cent for a tra­di­tional dis­trib­u­tor.

BYJU PIL­LAI PRES­I­DENT, IN­FLOW TECH­NOLO­GIES

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