Will These Whiz Bang Wonders Live Up to the Hype?
Big data. 3D printing. Artificial intelligence. When it comes to hyped technology, there is no shortage of emerging trends promising to be big revenue drivers for partners in the coming years. But will these promises live up to the hype? The VAR Guy reached out to partners and subject matter experts to see what the channel thinks.
During an earnings call last year, HP Inc. CEO Dion Weisler said partners were impressed with the company’s 3D technology.
“I think the feedback from potential channel partners, from end customers and from analysts and those that follow the industry closely understand what a breathtaking breakthrough we’ve made towards really pulling through the printing into the mainstream,” Weisler said.
Organizations from GE to Walter Reed Army Medical Center have bet big on 3D printing, and distributors like Ingram Micro are trying to educate partners on how to make money from the technology. But despite a lot of vendor hype, there doesn’t seem to be much practical use for 3D printing in the channel, at least not yet.
“When 3D printing was first unleashed it created a wave of enthusiasm, but the more I see of it the more I believe that it will be a fad and a niche product. None of my clients or the guys in our Sacramento tech group have been demanding to know how a 3D printer can solve a problem for them,” says Bob Nitrio, CEO at Ranvest Associates. “Even if it could solve a problem, 3D printing takes time to learn, time to get the final output, and seems like solution in search of a problem at this stage of development.”
Tabitha Wilson, systems engineer at Matrix Computer Consulting, says that 3D printing is limited in large part by the medium, which is typically plastic. “Look around the room in which you currently find yourself. How many useful objects are made of just plastic?” She points out that there are other materials like concrete that show promise, but that the practical use is limited since most of the time the printers are unable to switch between materials mid-process.
But for Mark Kurtz, chief growth officer and vice president of new media at Gage, the real inhibitor is cost. “3D printing, I hate it. Somebody said to me, hey, we did a 3D print and it only took us 800 hours. I am thinking 800 hours?” he said incredulously. “I am not at all a subject matter expert on 3D printing. But I just don't see the ability to scale with it.”
Virtual reality is undoubtedly cool. The technology’s capabilities are jaw dropping, and many VR companies and unified communications providers say that there’s an enterprise application for the technology in videoconferencing.
Vishy Gopalakrishnan, who leads the strategy and execution for the Voice & Collaboration portfolio at AT&T, told The VAR Guy last year that the big potential for virtual reality (VR) is in helping diverse, spread-out teams work more closely together. “VR could one day become one more communication mode in a ‘unified’ solution, to help distributed colleagues interact as if they’re side-by-side.”
Just a couple of months ago, tech analyst firm IDC’s annual FutureScape predictions called for more investments into, among other things, augmented-and-virtual reality technology. And there does seem to be more receptivity to augmented reality, especially in the manufacturing sector where it’s already being used for training purposes. But virtual reality? Partners aren’t buying it.
Kurtz says the big problem is our addiction to multi-tasking. “Virtual reality will work if you want a totally immersive experience, if you are totally into just one thing like a game or you are using it for teaching something or learning something. But if it is for mass adoption I think it is going to be very difficult.” In other words, until they find a way to let you surreptitiously read your texts under a virtual reality conference room table during meetings, it won’t catch on mainstream.
Managed Print Services
Okay, so this isn’t exactly a new technology, but managed print is certainly one of those trends being trumpeted to the channel as a big revenue opportunity—usually by old school hardware vendors like Xerox and HP desperately trying to find new ways to increase margins in shrinking market. Managed print was said to be an easy “in” to the managed services world, but has it lived up to the hype?
Not really, according to our sources for this story. “We have had some difficulty getting clients to get on board with managed print services from us, their managed service provider,” says Wilson. “There are many companies out there who specialize in print services and as yet, they still dominate in this arena. It is not currently an area where I see a great opportunity for our business.”
A big part of the reason these dominant niche players have been so successful in retaining their hold on this market is because of the drastic increase in electronic documents and corresponding decrease in printer supplies. That print volume in general is diminishing significantly is a predictable outcome of the emergence of low-cost cloud storage, says Nitrio, a trend that’s clearly evidenced by the dwindling revenue of the United States Postal Service in recent years. This leaves a small market for managed print services, which will remain a niche offering rather than a mainstream service.
When partners do manage to land a managed print customer, the margins are so slim that it’s hard to make real money. “I have provided managed print services to two clients. In the first case I had to pay my vendor partner and then bill my clients every month. The small margin I received actually made this a time drain and a losing proposition,” said Nitrio.
With the second client, Nitro partnered with Synnex, who does the billing for him. He gets a check every few months when his account reaches a certain minimum amount, which is a low-effort, painless process. Still, it’s not exactly a cash cow. “Unless you can put managed print in place for high-volume print clients, it isn’t going to generate any meaningful revenue.”
Blockchain technology is still the channel’s bright and shiny new penny. Like the Internet of Things last year, blockchain is the newest trend that analysts, vendors and engineers are heralding as the Next Big Thing. While most recognize it as the technology that supports cryptocurrency like Bitcoin, it’s the potential it shows in a vast array of other applications that has the channel all atwitter.
Blockchain is a distributed data structure supported by peer-to-peer protocols. Essentially, it forms an immutable, decentralized ledger for transactions, which is what makes it perfectly suited to fintech. But it also holds possibilities, say experts, in fields such as manufacturing, transportation and healthcare. Basically, blockchain comes in handy anywhere you need a chain of custody, such as tracking who’s signing into apps, visiting certain sites or digitally signing documents.
Nitrio acknowledges blockchain’s potential, but doubts it will have big implications for the channel. “I can envision the potential for widespread adoption of block chain technology for anything involving financial transactions,” he says. “Bitcoin may be the most well-known application, but I have heard that it is also being used for supply-chain management.”
As with all new disruptive technologies, Nitrio says the blockchain will need to prove that it is both secure and reliable if it is to become mainstream—and when it comes to the channel, he doesn’t see a lot of opportunity anytime soon. “I see this as something that works at a macro level and is not very likely to be a channel play.”
But Sean Hollingsworth, a longtime channel partner with companies such as Enlogic Sytems and IT4USA, sees a tangential opportunity for partners. If you just look at Bitcoin, he says, the infrastructure needed to give it integrity is massive. “You would basically need probably five or six megawatts of data center just to track the currency for everybody to use.” Blockchain, in whatever application, requires vast cloud infrastructures, and the associated transactions are “going to end up just being a virtual session on either an entire data center of LAN chassis or CISCO ETS or whatever the next major server technology is.”
So for partners well-versed in storage, especially hyper-converged solutions where compute and storage are contained within the same array, blockchain may present big opportunities as it lives up to its hype in other industries.
When asked about emerging technology, the experts we talked to were far and away the most optimistic about the future of artificial intelligence, in large part because the term is still vague enough to cover a wide variety of applications.
“It's funny because everybody has jumped on the AI bandwagon. We have got Microsoft saying everything is AI and Amazon saying the future of the world is AI,” says Kurtz. “But everybody has the same question: what does this mean? How are we defining it?”
Many of the people we spoke to talked about AI in terms of making big data manageable for businesses. “Finding patterns and meaning from literal terabytes of data are simply not something people can do,” said Wilson. “It’s too much information for us to be able to realistically use, but if we ignore large amounts of data, we do so at our own peril. We will continue to need a computer to help us make sense of it.” And who will supply, configure and service those computers and platforms? The channel.
But for partners looking to build a future in services, AI’s promise surrounding content discovery and delivery may be just as important. These days, customers will do just about anything to avoid talking to a real live person. They complete 80 percent of the buyer’s journey online, make purchases and manage their customer accounts through web portals, and utilize features like live chat to troubleshoot issues.
And by incorporating machine learning, these AI-driven services can learn from user behavior to become faster and more accurate with every interaction. “The promise of AI is how can it anticipate what my needs are going to be before I know them myself,” says Kurtz. He sees a massive application for AI when it comes to chatbots. “These interactive chatbots become almost like interactive wizards for guiding you through the question and answer of a dialogue.”
But the tech goes beyond content delivery. Today’s support AI applications are pushing the boundaries of content discovery, too. Kurtz calls it the ability to “surprise and delight” customers. For example, when they purchase a product, the system might automatically suggest complementary items they may not have thought to ask for, user guides to help them optimize their purchase or, in the case of channel partners, sales and marketing enablement materials to help them sell it.
When it comes to the old-fashioned meaning of AI-driven robots, though, most of our experts still see that as a long way away. “As far as waiting for a computer that can seem human, I think that’s an existential dilemma for two generations from now at least,” says Wilson. “While there have been some limited uses of artificial intelligence to provide company and care for the elderly or to provide limited receptionist functionality, this is really more of a novelty more than a practical use at this point.”