Challenges and the Channel
Sunday, June 23, 2019
Now that 5G has been launched, resellers have one more technology to educate partners on. But what are the other challenges that they face?
Although a couple of months have past now, the financial year end is usually a time for reflection and assessment of the strengths and weaknesses of the company.
But in an ever-evolving industry such as the reseller market, those weaknesses may not always be addressable right away.
Trends come and go but finding the value and scalable tech for customers as well as your own business can be a hard decision to make. Speaking at the TBT roundtable event sponsored by CenturyLink in London, delegates from resellers as well as distributors said that, perhaps surprisingly, excitement for technologies can be a challenge for the reseller.
“Hype is our own worst enemy because it sets an expectation that you can’t deliver against” said Adept CEO Phil Race, “then the customers get frustrated when you deliver a solution that sort of works but doesn’t meet this utopia that they had wanted.
“5G will be another classic because that true benefit of 5G won’t be felt for another three or four years but you can guarantee it is on agendas and to be honest it shouldn’t be.”
Nuvola CEO Michael Lloyd added “Someone has put a marketing message out there and now customers are saying ‘I want IoT’ and when we ask what they mean they say, ‘I want to speak to my fridge’. We talk about 100MB broadband and the kids ask why they are not receiving those speeds and you have to explain that there are 100 people trying to get 100MB at the same time so they’re only going to get one MB’.
“The better marketing machines win but that also digs such a hole. From a distribution point of view, we have 10 products maximum, so we have to back the right horse and it’s not necessarily going to be the most exciting technology.
“For us it’s going to be about the vendor who puts the most effort behind the product and maybe not set expectations that can not be reached because when you come to installation and it doesn’t meet expectations they’ll only come back to the distributor and pick it up with us.”
However, from this frustration, CAE Technology CEO Justin Harling, believes comes an opportunity. According to Harling, when being sold to, a lot of clients will respond better when resellers don’t “believe their own marketing.”
He said: “A lot of these new technologies are just buzzwords. Our opening gambit, to Michael’s point, is walk in to a customer and say ‘we are an infrastructure company,’ We won’t dress it up, it’s what we are and what we intend to be in the future and you can see the customer relax a bit there because we are not going to sit there misleading them.
“It’s just marketing and the worst thing you can do as a reseller is believe your own marketing because there are plenty of companies out there who have and forget to sell anything because they don’t know what these technologies are yet.
“Fundamentally these are all just buzzwords. They are about connectivity, infrastructure, moving data from one place to another in whatever way you want to.”
Who knows best?
Despite the response Harling has seen from providing clarity, the marketing machines appear to be getting louder and with announcements and exhibitions every week, not being seduced by AI, Big Data and machine learning, to name a few, can be a challenge for the end user.
One point that Taylor Made CEO Ian Lockwood made is that, increasingly, businesses are purchasing solutions without consulting the IT professionals in their own company.
“It’s been interesting how IT people have been bypassed by business owners as they are becoming more aware” he said.
“A business owner will see something that his mate’s got and ask if he can have it and when the answer is ‘no you can’t’ we have to outline the reasons why: because strategically you can’t do that, because it throws your data over there, it’s not then integrated with something else that then needs to be updated.
“So now they are asking if they can put their systems in the cloud, asking why they need it on prem. The traditional IT manager or director would have been driving that, but we have seen a fundamental shift and our sales profile now bypasses those guys and we don’t talk to IT people.
“We go straight to the business owners because they are now wanting to have the conversations around IT. You’ll also get a department who want a different solution and will quite often go out and buy it and they bypass the IT department or the CEO will come into work one day and say I want this and I want it now and the whole IT strategy falls apart.
“So controlling that is a challenge in our business and getting the people in your organisation who are strong enough to say ‘hang on minute, you can’t do that and these are the reasons why’ rather than a salesman who will say ‘Absolutely! Here you go’ is also a challenge.”
As Lockwood says, finding the people to fill those roles is easier said than done. According to IBM and Deloitte there is likely to be up to one million unfilled IT jobs by 2020 but, as Race points out, as if finding employees wasn’t hard enough, resellers then have to train them.
“I read that there are 1,800 new services introduced by Amazon in the last year and who on earth knows what those are?
“It’s our job to filter through those 1,800 and take some of that to market in a useful way and that’s just one of our suppliers, we’ve got Microsoft Azure and others so we have a massive store of innovation sitting in our supplier base. How on earth do we filter that and take that to market in a coherent way?
“We did an employee engagement survey recently and the number one topic was training and education but the problem is that the margins in the channel mean that it’s very hard to make that investment and reconciling all those different dimensions is really tough but training and education is crucial.”
“Hype is our own worst enemy because hype sets an expectation that you can’t deliver against and then the customers get frustrated when you deliver a solution that sort of works but doesn’t meet this utopia that they had wanted.”Phil Race, CEO, adept technology group
Race went on to say that, when it comes to maintaining customers, he inherited a culture at Adept that would not talk about renewals for fear of churn. He added that a new approach of “getting in there” and attempting to upsell needed to be installed.
Now, the most effective approach in the Channel is to maintain a relationship with ProVu Sale Director Craig Herrett saying that, if a relationship is strong enough, customers will continue to return, even after experiencing issues.
“It’s about talking to customers before renewals too. It’s giving them a call every few months or so and asking how things are going, what they are doing, what their future plans are.
“People don’t necessarily mind failure; they mind what happened and what you did. No one wants failure but thanks to Twitter and Downdetector, everything is immediate now. You have to stand up and acknowledge the problem and deal with it.
“Gamma had a failure a while ago but the communications throughout most of it, and the communication at the end of it, actually they didn’t lose a lot of kudos"