To System i Infinity and Beyond...
When will the market wake up and realise that the modern mainframe - in terms of low cost of ownership, solution availability and open architecture support, has been around for sometime?
The only reason that IBM's System i platform is not as 'dominant' as the mainframe was is based on marketing vanity'. If business was truly all about doing business at the lowest cost to maximise profit, then the System i should be the dominant server technology. However, marketing vanity means that far too many see this (as they did the mainframe) sometime ago, as a dinosaur.
Beware the wounded animal, when business truly wants to make money at the lowest cost, when marketing common sense prevails, the System i will be back (hopefully with a new, modern, name) and the 'distortion' in history will get corrected!
Distribution Today, Tomorrow...
It seems the distribution industry faces a few dillema's; how can they make any money from technology that continues to deliver 15-20 per cent price/performance per year and is being treated as an 'internet' style commodity product sale. Answer - sell lots more; develop a service/solution business, but this competes heads on with their customers; continue to develop 'eco systems' of partners, answer - very easy, this (HAS NOT) been successfully implmented by any vendor in the industry (EVER).
Add in the fact that most of the industry is 'over distributed' and it will continue to be very difficult for distribution to truly make money.
The vendors need to urgently review how/what they use/want from a distributor. In return, a distributor has to determine what he wants as a core business, competing with his own channel makes little sense in a tough market such as all face at this time.
Tax Relief
So I've been thinking more and more about the Budget. Why does our government go on and on about small business being very important and yet treat channel partners as though they are BP or Tesco in terms of taxation?
Channel businesses are classic SME sized companies, mainly built on a mobile workforce and yet we get taxed as though we employ middle management (as the big corporates do) and have huge admin based teams.
Most channel partners have to grow their own skilled people as they cannot afford to buy in the open market, often re-training people from other industries, they spend their lives in cars travelling to/from their customers (again mainly SME sized) to create commerce (and tax recovery) for the country.
How can the government be so 'two faced' to say that they need small business to develop and grow and yet only aim any tax breaks at the very small businesses, not the SME ones?
Government - Driving the Price Down?
With the Budget on today and UK plc waiting with trepidation, government IT came to mind. I 'kind of' understand the drive of our government to reduce costs within it's own business - as the larger Corporate businesses do. What I do not understand is why it does this to such an extent that it hurts the very businesses that it relies on to fund it in the first place (taxes)? Surely just applying 'Corporate governance' will not help in the long term?
Catalist (the government framework for IT procurement) is a classic example of the 'commodity' driven approach to market. It is elitist, it does not deliver what the government businesses need (except on price, and only sometimes), it stops businesses trading with the government (especially the smaller ones) and it is far too complicated to make any sense (to government businesses, let alone the support ones).
The government needs to review this urgently to make it something that will aid business, not destroy it and all channel partners that offer the value add required.
Computacenter (CC) Results
No real surprises here, CC must invest in services to get the higher margin/annuity business in as they struggle (as most do) to make any real money out of the technology they/the channel sell.
The consistent march of the IT industry to deliver more price/performance year on year and the relentless march of the consumer to drive the price down, will deliver an inevitable conclusion - very few re sellers bothering to sell technology. I wonder what the vendors will do when the only way to differentiate their product will be via the internet?
Using Channel Resources
The market seems awash with 'services led' offerings, whilst many of these are 'packaged' and are what I would deem 'channel ready /friendly', i.e. something the channel wants/needs to sell to support it's own sales model, like maintenance, selling people as a service still seems in conflict.
Major players in the space all seem to agree that there is a skills shortage, certainly in new/emerging markets. I have heard of business being 'turned away' because the vendor does not have the skills/the contract is too small, etc?
My question to the vendors is simple, you develop your channel, who in turn develop good people skills, why not use them to 'truly' sub contract and work 'below the waterline' in terms of new projects/markets at a lower price point (the price point the market will buy at).
In the past 'mark up' has been the issue, basically the 'corporate police force' taking too much margin out of the partner to make the proposition work for them, this means that many initiatives never get to true 'repeatability'.
All vendors have tried (some with limited success, most have failed) to truly engage with the channel to maimxise the combined 'resource pool'.
It is good to see that IBM has finally worked this out and it having a very deliberate attempt to resolve the issue, it is early days yet, however, there is at last a real glimmer of hope!
For many years the 'loyalty' to a vendor has been on the decline, mainly because the vendors have taken a 'commodity' approach to the channel based on market pressure, however, people-based service growth (within the majority of major vendors) has also created a lot of friction. Working together, fully utilising each others' skills, extending market 'reach/range', has to make sense.
