Cloud has finally grown up.
That's the observation of Alex Hart, senior vice president of strategic services for The 2112 Group. He'll join a panel of analysts next week at Channel Partners Evolution to reveal their findings on the technology and go-to-market strategies partners are using.
The "Crystal Ball Bash," part of the revenue and supplier portfolio conference track sponsored by Cyxtera, Oct. 10, will offer three predictions for 2019 and three habits partners need to drop as soon as possible. PartnerPath CEO Diane Krakora and Michael Diamond, The NDP Group's B2B industry analyst, will take the stage alongside Hart.
Hart spoke to Channel Futures about the trends he's noticing in our industry.
We have edited the transcript for length and clarity.
Channel Futures: This panel looks forward to 2019, but when 2018’s all said and done, what do you think will be the defining characteristics and trends of the year?
Alex Hart: 2018 was the year cloud finally grew up and managed services came of age. Cloud environments are maturing and, increasingly, we’re seeing customers adopt cloud platforms for their more complex, enterprise-critical applications. Per a 2018 IDG cloud study, 73 percent of surveyed organizations have either at least one application or a part of their enterprise infrastructure in a cloud, and 17 percent plan on doing so in 2019. Customers are now deciding how, not if, they plan on moving workloads off-premises — whether to hybrid, single, or multicloud environments. We are also seeing an increased adoption of public cloud platforms as acceptable for business-critical workloads. Average cloud budgets are up 36 percent year over year, and although security is a primary concern, cloud providers have done a good job of minimizing risk perceptions.
This maturing adoption of cloud as an integral piece of the IT production infrastructure (not just for testing and/or development) has also given rise to an increased comfort level among both large and small customers in outsourcing key service functions to MSPs. Security, disaster recovery and telephony/collaboration are among the areas with strong customer adoption, especially in the SMB and midmarket segments. SMBs and midmarket customers typically don’t have the specialized resources to dedicate to robust cyber or DR practices. Those are also the businesses most vulnerable to the negative impact of incidents should they occur. MSPs with multiple services in their portfolios are making themselves more relevant to their client base[s] and ensuring a continued seat at the table.
CF: Could you give us one prediction for the channel or business technology in general in 2019?
AH: A trend we at The 2112 Group see as key in 2019 is the rise of nontraditional channels as a new breed of partner. We also see that most vendors today are unprepared to engage effectively with these customer influencers. The rise of cloud, IoT and new platform vendor ecosystems, and the shift in conversations from technology to business outcomes, are bringing to the forefront non-technology-focused consulting organizations that haven’t typically been a part of the traditional chain of influence in technology buying decisions. The CPAs, law firms, marketing service organizations, HR consultants, and business process re-engineering firms that make up the “new breed” partners have significant sway with line-of-business owners within an enterprise and are increasingly providing advice on the technology necessary to bring about desired business outcomes. Effective engagement with this nontraditional channel requires rethinking partner programs, enablement, joint business-planning models and overall route-to-market strategies.
CF: Name one of the “pet peeves” you have about how partners operate?
AH: Partners that don’t take full advantage of the services their vendors offer through their respective partner programs, and focus on “leads” versus using the intellectual property available to improve their organization’s ability to compete in the marketplace. As a former channel chief, I had many conversations with partner executives that focused on the quantity and quality, or lack thereof, of leads received. When pressed on what their teams were doing to “fish rather than be fed fish,” few of these executives could provide concrete plans on how services offered through vendor partner programs, such as marketing/lead gen campaigns “in a box,” sales enablement and training, co-branding and MDF, were being used to enhance organizational skills and create a competitive edge when building their pipelines. When a partner is establishing a relationship with a vendor, vendor-provided leads are a key component in priming the pump, but at some point, the partner needs to build a level of self-sufficiency in generating accretive value to the vendor relationship.