Representing an increase of 5.9 per cent over 2016, IDC research points to a changing buying landscape for the channel, one which sees line of business (LOB) leaders gain greater control of the technology buying process.
“But there’s no central governance,” Tomkinson cautioned. “Instead, what happens is multiple departments deploying different tools here and there. This might be great for a particular department at a particular time but for the benefit of the organisation, and in a cloud context, a more central approach is required.
“Users are heavily constrained by what they can do on-premise so they take their credit card and spin up a workload in the cloud.”
Originating from a desire to digitise operations, changing competitive landscapes and consumerism are disrupting businesses and creating an imperative to invest in digital transformation.
Consequently, partners are now faced with a new breed of buyer in the cloud, a buyer not bound by CIO tendencies and not tied to legacy decisions of the past.
“The move to cloud used to be more of a lift and shift approach, but now that approach has changed,” Fujitsu solutions director — cloud portfolio James King explained. “We used to sell to the CIO but now we’re selling to the business and those business units are driving cloud spend which creates a new dynamic in the channel.
“In 2016, more than half of the outsourcing contact decisions made worldwide were made outside of the IT department which represents a huge shift in buying patterns.”
As a result, King said the cloud sell is changing, as customers seek consultative services over transactional deals.
“It’s more focused on smaller consulting engagements where you engage with a customer to solve a smaller problem,” he said. “It’s a shift away from being a technology seller and pitching the features of the product to win large chunky deals.
“Now the industry is moving towards small business focused discussions. It’s a different process for partners and because of that we’re competing more with traditional consulting companies.”
By 2020, LOB technology spending is expected to be nearly equal to that of the IT organisation, placing business units in the frontline of the cloud and digital transformation strategies.
Consequently, traditional providers that do not have a strategy to offer cloud based services face challenges ahead, with the onus to evolve business models and create differentiated offerings in a competitive marketplace.
“We’re seeing our competitors under pressure,” Ormesher said. “The kit side of the market is deteriorating and partners are struggling to adapt. We’ve successfully made that transition because we spotted the opportunity a number of years ago and directed our efforts towards managed services to boost our annuity revenue streams.
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