The Middle East channel is evolving. We are seeing some of the Pan-European distributors coming to the Middle East region. We are also seeing some acquisitions taking place, with large distributors from within and outside the region acquiring smaller distributors and this trend is likely to continue. All these changes augur well for the future, writes Abdul Rehman Tariq Regional Channel Manager, MENA Brocade.
With the focus now on Software Defined Networking (SDN), Network Functions Virtualisation (NFV), 3rd platform, Big Data, Mobility etc, no distributor can survive only on a volume model. Value-added services is the game changer and where the channel will be able to differentiate itself from competition. The channel organisations that have the capabilities to offer these services will succeed. Gone are the days of pure ‘box-moving’.
This would mean that VADs will have to invest in much stronger technical and sales resources, and be able to cater to the needs of resellers and SIs working in the complex solution space. The channel needs to ‘Be ready to Change’. It is the most difficult thing to change from a model that you have been working on for years and years. But technologies are changing, vendor approaches to customers are changing. The channel needs to be ready to adapt and change accordingly.
The Channel needs to change their business models and be prudent about which vendors they associate with. Professional services and consultancy is where channel need to focus their efforts. Based on a survey conducted by Brocade last year of over 500 channel organisations worldwide, the report revealed that almost half of channel respondents expect professional services to become their main revenue generator by 2020. Yet, for the majority of respondents, professional services accounts for 25% or less of revenues today. The channel needs to act as consultants and add professional services to their capabilities.
Political uncertainty has been an integral part of this region. That however has never held back growth. The major countries in the Middle East, specially the GCC, are the most politically stable and historically most of the growth in channel comes from the GCC member countries. 2015 is definitely the year when things become much more stable for other countries in the region as well, and that will lead to accelerated growth in the channel.
Due to the EXPO 2020 in Dubai and Qatar 2022, the hospitality vertical has picked up pace, and channel partners that evolve to cater to the needs of this vertical will garner rich rewards. Saudi Arabia is moving towards adoption of emerging technologies. This is a good thing for vendors as well as channel partners that provide niche solutions that cater to specific customer needs. UAE has always been a front runner when it comes to the adoption of the latest and greatest technologies and trends. These two countries will lead the growth for channel.
Most vendors are now providing local support in terms of financing and services. With professional services and capital financing a major play for vendors, there is definitely scope for channel to take advantage of such offerings and grow their customers. IT-as-a-Service (ITaaS) will become popular. In essence, ITaaS is the delivery of technology on a subscription basis, thereby turning Information Technology from a capital to an operational expense. With ITaaS, technology solutions can be deployed as and when needed and organisations only need to pay for what they use. This allows IT to be a strategic enabler of the business while helping to ensure that the purchase and consumption of IT services is always fully aligned to business requirements.
Moving towards a subscription model can significantly reduce upfront costs, making IT expenditure more regular and predictable and giving organisations greater financial transparency. The fact that organisations are buying a service, rather than the IT equipment itself, should also give businesses greater access to expert technical support and the latest, up-to-date hardware.
Emerging trends
The rise of the New IP: We are at the forefront of a new model for networking: Historically, compute transitions have always driven network evolution. It is no secret that the future lies in new compute models – such as mobile, cloud computing and the Internet of Things – and this will in turn lead to a major shift in networking. Legacy networks, built on closed proprietary protocols and designed for non-mission critical applications, will have to adapt if they are to support these new technology trends. In 2015, we will see this begin in earnest, with the rise of the New IP, a new networking paradigm that is better aligned with the evolution of the rest of IT – and increasingly open, software-driven, and user-centric.
SDN and NFV take big leaps forward: According to a recent EMEA Channel survey conducted by Brocade in October this year of over 230 Brocade distributors and resellers, over half of EMEA channel partners and systems integrators believe that Software-Defined Networking (SDN) and Network Functions Virtualisation (NFV) will be significant trends within the next two years. We have already seen some early adopters taking advantage of these technologies but, in 2015, we’re expecting to see SDN and NFV really take hold as open standards become popular.
The Internet of Things will start to impact business: In 2014, we saw the Internet of Things begin to truly take shape and, in 2015, this trend is set to rapidly gain momentum. With Gartner predicting that 26 billion connected units – from watches to refrigerators and treadmills to cars – are expected to be installed by 2020, businesses will need to cope with an ever-growing network of connected devices generating and accessing data. Many of these connected technologies will be brought on to existing corporate or public networks, making investment in the underlying infrastructure that supports these advancements absolutely essential.
The virtual workspace will become a necessity: Employees are demanding and, with budgets set to remain tight for the foreseeable future, companies are looking for ways to meet user demands and boost productivity. 2015 is therefore likely to see virtual working becoming increasingly main-stream as companies look to meet this conflicting pressure by introducing virtualised workspaces. However, this added flexibility will inevitably put greater strain on core IT infrastructure, and companies will need to make sure they have the right network in place in order to deliver this level of user flexibility and freedom.
A new approach to privacy: 2014 has exposed many concerns around data privacy and, with “privacy-first” services such as Snapchat, Whisper, and Ello growing in popularity, it is clear that this trend is here to stay. With public awareness of data security and privacy increasingly, every organisation will need to sharpen its privacy and data security initiatives. Data breaches or leaks are no longer simply security issues; they are potentially hugely damaging to a company’s brand and reputation. As a result, organisations will need to pay much closer attention to how and where they store sensitive commercial or customer data. Investment in education for employees and customers will be particularly critical as access to, and use of, data becomes a fundamental issue for every business.
With all these new trends coming into play, customers in the Middle East will undoubtedly turn to the channel for consultancy and herein lies huge opportunities for channel organisations that have had the foresight to recognise these powerful trends and develop their capabilities ahead of competition.
