With the market in transformation, Comms Business Magazine, together with The Cavell Group, held the inaugural Channel Leaders event in London at the end of April to focus on how channels can remain relevant to customers in the future.
There are challenges facing the channel. Traditional definitions, ways of doing things and delivering solutions are changing fast and for resellers one of the key issues is how, given users can increasingly go direct to vendors, can they stay relevant to
their customers.
Matt Townend of The Cavell Group summed up the bigger picture and how channels can respond to the challenges when he opened the one day conference for leading ICT suppliers.
“In a world where customers can communicate by using WhatsApp or Slack, buy their IT solutions from the cloud and some of the industry’s traditional vendors are undergoing huge challenges just to survive, we will today explore what strategic and tactical choices channels businesses will need to make to remain relevant to customers in the future.”
A market where staying abreast of the technological changes is a challenge to both users and resellers is also a time when users are attaching greater value to the customer experience than the technology that is being used. It is this customer service excellence, as well as having enhanced knowledge and intelligence about users, that lead to successfully competing and staying relevant.
One could deduce from this that whilst huge sums of IT spend are being consumed on enterprise digital transformations that it is the outcomes of those transformations – achieving competitive advantage for example, that are paramount and not the technology.
DX- Driving compelling solutionsEvolution
With supply chains evolving Matt Townend suggested that service providers and channel resellers were being compelled to provide multi-service offerings in the face of a cloud paradigm that meant vendors could go directly to users.
He said, “This was causing distributors to re-evaluate their value-add propositions and could result in future channel differentiation being characterised by service levels, vertical specialisation, solution integration and customer intimacy.”
Dominic Black of Cavell Group observed that today Digital Disruption, the UK Telecoms Market, the Internet of Things (IoT) and the changing role of the Channel were among the key topics of discussion.
“Of these several recurring themes, the most prominent were falling traditional market revenues and rapidly changing customer requirements.”
The first panel discussion of the day was ‘How Can You Guide Your Customers Through the Digital Age?’, chaired by David Dungay, Editor of Comms Business. The panel, comprising, Ralph Page of Genband, Mike Wilkinson of Lumeon, and Dan Cunliffe of Pangea, tackled points on identifying when a customer is struggling to adopt a digital strategy.
Times Are Changing!• Customer requirements
are changing
• Traditional market revenues
are falling
• Supply chains evolving with
new suppliers
• New Markets are accelerating
• Disruptive competition is emerging
Black noted, “This lead to an interesting anecdote on smart water drains on the Isle of Wight by Dan Cunliffe, prompting further discussion on the IoT. Another hotly discussed point on the panel was where channels can find immediate success in a rapidly changing industry, be it focussing on CPaaS, M2M or elsewhere.”
Look Lively!
According to many, the liveliest panel discussion was represented by ‘Suppliers and Vendor Selection: ‘Which Horse Should I Back in the Future?’'
Panel: Backing the right vendorPanellists included Steve Harris of Nuvias, Richard Bligh from Gamma, Mark Timmermans of BT Wholesale, Gary Gould of ShoreTel and Russell Lux of TelcoSwitch.
The variety of vendor and service provider businesses present, passionate panellists and the importance of the topic created some great discussion on the fragmentation of the traditional vendor and service provider markets, as well as what products, vertical markets and service areas the channel should embrace.
This was particularly relevant with the recent news on companies like Avaya. Discussion also touched on competing with the services provided firms such as Twilio, Microsoft and Amazon and how cloud services can transform industries such as distribution and logistics.
Significantly, this panel agreed that a skills shortage in the channel could hinder or hold back many resellers and service providers looking to exploit cloud based application deployment – a subject we cover more extensively elsewhere in this issue.
The Experience So Far…
Matt Townend told delegates that experience has shown simple bundled propositions have prevailed in the cloud communications market and that whilst hosted VoIP traditionally competed with PBXs based on OPEX expenditure there is now more competition between offerings and that providers are differentiating by;
• Global/International Focus
• Vertical Business Process Integration
• Integration to common business tools (Microsoft, CRM etc.)
• Focus on specific features/capabilities such as Recording, Inbound/Contact Centre, Continuity & Security, Collaboration
As the cloud market begins to mature Townend sees that further focus will be placed upon embedded and vertical communications capabilities, team collaboration, improving customer interactions and mobility.
Specifically, and referring to team collaboration and messaging, Cavell Group pointed to the following recent activity in the market:
• Slack -5 million daily users and 1.5 million paid users by Jan 2017
• Microsoft reacted with launch of ‘Teams’ at the end of Jan 2017
• Facebook launch Facebook at Work
• Broadsoft launch Team-One based on its Intellinote acquisition at end of 2016
• RingCentral purchased Team Collaboration firm Glip in June 2015
• Multiple other competitors including virtualised solutions from companies like: Yammer
Kristine Olsen-ChapmanCustomer Relationships
Re-enforcing the need for a customer first strategy, Kristine Olsen-Chapman, Managing Director at TalkTalk Business, delivered a key note on the subject stating illustrating how customer relationships had changed over the last 10 to 20 years.
Impact of IoT• IoT will affect all industries and sectors, not just consumer• By 2018 analytic applications aligned with the IoT will result in 15% productivity improvements for manufacturers
• Arup estimates that the global market for smart urban systems for transport, energy, healthcare, water and waste will amount to around $400 Billion pa. by 2020
• By 2020 the connected health market is expected to be worth $117 billion (in 2017, the remote patient monitoring market is worth $46 billion)
“Listen to your customers to find out what they want and what they need,” said Olsen-Chapman, who pointed out that;
• 80% of business will be dependent on the cloud in 18-months’ time
• Only 46% of SMEs say they use the cloud but it’s nearer 72% as they tend to omit using Dropbox.
• 26% of IT professionals are worried about consumer apps being used in the workplace – are they safe, enduring and scalable?
In Olsen-Chapman’s view more than a trillion IoT devices will be connected over the next two decades illustrating what she terms as ‘an insatiable demand for data’.
“How do you win in this market place? In my view, you need to become customer centric, get the product evolution right by preparing your network for the future and become digitally agile.
Customers need help to get through this. While 29% of SMEs are confident with the cloud, 17% say the cloud is irrelevant and 45% want ongoing help with their networks.”
The Market
According to Adam Zoldan of Knight Corporate Finance, the M&A activity in the sector is buoyant with 197 deals concluded in the last twelve months worth, including investments, some £12.5 billion.
Zoldan put this down to three key factors; the availability of funding in the sector, the emergence of private equity and the positive impact of Brexit.
Feedback
Andrew Skipsey, Managing Director of reseller M12 Solutions, told me he attended Channel Leaders because the agenda looked current and interesting.
“In 2008, we lost quite a few major customers and this was the catalyst for change at M12. Since then we have been undertaking digital transformation business with our customers in an evolutionary way.”
Andrew had brought along fellow director Matthew Skipsey, one of two sons now in the business.
“Matthew is probably the only company director in the room under 30 and he has found this event illuminating for the thought leadership on hand. I’d recommend other resellers to consider this event next time it is held as there is a great deal of thinking going on outside the box as well as ideas coming in from left field.”
Skipsey messaged me the following day to tell me: “I engaged with two potential new suppliers, very appropriate complementary offerings, caught up with senior people from a couple of suppliers and met up with a few other business owners we’ve got some things in common with. In all, a very useful event.”