As always happens this time of year, my in-box fills up with predictions for the new year, and I'm being urged to add my voice to the chorus.
I find "previews of what is to come" fall into two camps. Those that concern technologies or the applications of technology can be very creative. Symantec cautions that election campaigns are increasingly vulnerable to cyber-fraud, while Fortinet calls distributed-denial-of-service attacks "the tactical nukes of the digital era."
Business trend predictions are much less inventive, probably because IT business practices evolve much more slowly than technology itself. Each year brings not a new set of challenges and options, but an increased urgency to address long-term issues and some additional insight into the impact of different approaches.
When it comes to the channel, the prognostications inevitably revolve around services. Even though this isn't a new trend for 2008, it seems clear that channel companies need to sell services independent of product sales. Those that rely on product sales to drive services opportunity are drawn into a cycle of diminishing return; those that wait for the complex future will run out of cash. In the upcoming year, the winners—or at least, the survivors—will be those businesses that can establish discrete value propositions for the services they provide to customers.
My sense of the importance of this approach was reinforced when discussing the topic with a friend who owned a channel business through the '80s and '90s. Reflecting on how his business had evolved and what he sees in the future, he said, "You have to sell your own product, your own service. For years, I was an IBM reseller—but what I really needed to be was a seller of [his company], who could also provide IBM products where they were needed."
Looking back, his regret was that he was too involved in marketing a brand other than his own. His prediction for the future reflects this. He believes that in an environment that does not attach adequate operating margins to resale, a channel company's management strategy has to start with promotion of its own offerings and with investments designed to build recognition of these capabilities in target accounts/markets.
My friend's assessment provides insight into the broader changes that are occurring in the IT market, which in turn shape the actions that channel companies will need to embrace in the coming year. So to get on with the prognostications, I think we can expect to see the following in 2008:
• Greater focus on complex opportunities. As an additional bonus, I believe we will see this reflected in an increasing need for deep skills in requirements analysis and project definition and management within the channel.
• Greater need to develop trust in customer accounts (and the associated need for advanced sales skills).
• Greater need to sell services discretely (in advance of/independent of product sales).
• A movement towards marketing the solution provider's brand itself, rather than serving as an extension of a system vendor's field marketing force.
Sorry if these aren't as compelling as the cyber-crime possibilities, but if the saying, "In mystery there is margin" is true, so too, is, "Good blocking and tackling wins football games." And in 2008, good execution in the areas related to discrete packaging of services and treatment of products as ancillary offerings will trump cool new technology as a source of business success.
Michael O'Neill is co-founder and CEO/CTO of the social media site, IT in Canada, and research fellow at Info-Tech Research Group. He can be reached at michael.w.oneil@gmail.com
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