BOSTON – What does the solution provider of the future look like? Cisco’s worldwide channel chief Edison Peres took a shot at trying to describe what that solution provider might look like at the company’s annual Partner Summit Conference.
The reason for the question in the first place is that customers are buying IT differently these-days and solution providers are struggling to understand these new buying trends and it’s been negatively impacting traditional business models.
Peres outlined the successful reseller of the future this way: they will have adopted a hybrid IT business model that can offer managed services as well as on-premise solutions. Successful partners in the future will also create apps for either public or private clouds. Key to future success will be a model where solution providers wrap professional services around all they do, while customizing service level agreements for customers.
“That seems like a lot, but that is the game and it’s where we are headed,” Peres said.
According to Peres, the customer is looking for someone to architect the right mix of solutions and deliver models.
Solution providers who continue to sell to the IT department may be missing the mark. Peres said that there are new decision makers cropping up who run lines of business and Cisco has measured this trend and found that 30 per cent of the average IT budget is being influenced by these line of business managers.
What Peres has seen is that the average channel partner revenue is too close to the box (product) with maintenance and installation. With apps creation he has only seen those with vertical focused solution providers.
“The future will have a much bigger proportion of managed services, IaaS, SaaS and less about products. This has much more margin potential than the models that are in play today,” he said.
Peres provided three pieces of advice for today’s solution provider:
- Make hybrid IT a foundation of your business value proposition;
- Lead with solution and pro services; and
- Transition sales team to address new buying centres.
Peter D’Almeida of N*Able Ltd., a Cisco channel partner based in Sri Lanka, believes that the traditional system integrator business model is dying.
“The SI business is a dying business and I truly believe this is the case for the mid-market. We cannot sell and make money with products with this kind of business model. If they do not make the change to the cloud they are dead.”
D’Almeida suggested a new approach to selling is in order. “People are selling cloud as a technology. They should do what Singapore Airlines do. They do not sell the engine that flies the plane, but they sell the service and the great experience with the flat-bed pods and the suites,” he said.
Peres said that customers want business outcomes with service level agreements and guarantees. He even admitted that some of these solutions will be multi-vendor and not solely Cisco. “The channel’s relevance is rising and with more hybrid IT solutions along with professional services will help the customer transform,” Peres said.