Distributors will be more relevant
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.
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