Computacenter CEO Bashes ‘As a Service’ as Bad for Customers

CANALYS FORUM 2022 — Computacenter CEO Mike Norris has criticised the as-a-service business model, labelling it as, well, “sh**.”

Norris (pictured above) was speaking Wednesday at Canalys Forum 2022 in Barcelona.

He said: “As a Microsoft shareholder, as-a-service is brilliant. As a vendor, as-a-service is brilliant. As a channel partner, as-a-service is pretty good. [For] a corporate customer, I think it’s sh**.”

He continued: “Anybody that thinks that as-a-service is great for customers, I think they’re smoking dope. I really do. I think they’re just on the wrong planet. It’s a factor. It’s great. We have to embrace it. The vendors want to do it. I’m not saying it’s not going to conquer the world. It’s [just] not very good for customers.”

While not echoing Norris’ sentiments directly, the analysts at Canalys also pointed to as-a-service as overhyped.

Canalys’ Jay McBain

“Subscription, consumption product-led growth, as-a-service, will make up less than a third of our industry,” said Jay McBain, Canalys’ chief analyst for global channels. “Look at the $4.3 trillion that was bought by businesses and governments around the world. We get a little overhyped, a little over-excited based on all these commitments. But every analyst and every journalist that ever predicted the death of something in the last 40 years has been wrong.

“Our industry is very nuanced,” McBain continued. “We’re watching as 30% of our end customers are outsourcing some or all of their IT. We’re watching the resiliency of the telco agent recurring model. And we’re watching SaaS grow at 20-30%, hyperscalers growing 40-50%. We’re watching with interest as Dell just reported 78% growth on Apex, in hardware. HPE GreenLake isreporting three straight quarters of triple-digit growth this year, but of a very low baseline. This in total is going to make up a smaller percentage of what we do every day than we think.”

Canalys has previously said that vendors push consumption-based IT services on their partners, creating tension.

Software as a ‘Hostage’

Norris also pointed to the cost challenges around cloud.

“Cost control is the biggest challenge with the cloud,” he said. “Because it’s not software as a service, it’s software as a ‘hostage.’ You have no choice; you can’t get out of it. The vast majority of my customers, [we ask] ‘What can we do for you in the cloud?’ [They answer is], ‘Get control of my cost base.’ That is that is the biggest single demand.

“There is huge opportunity [in] the cloud. You should be there and you need to be there. It can’t be cloud first; it can’t be cloud everywhere. But it’s part of the infrastructure. It’s not cheap,” added Norris.

No Comment on Microsoft Changes

Norris declined to comment on the introduction of Microsoft’s controversial new points-based program for partners. This was despite sitting right next to David Smith, VP, worldwide channel sales, Microsoft U.S.

As Canalys’ CEO Steve Brazier wryly noted, “Mike Norris is the longest-serving public CEO in the UK across all categories. When you get to that stage, you can say what you like.”

Computacenter is quoted on the London FTSE 250 and employs more than 17,000 people worldwide.