EDGE 2017 - What the customer wants

EDGE 2017 - What the customer wants

New-look tech buyer open to delivering new projects, favours collaboration and craves outcome-driven results

Mark Iles - Executive Consultant, Tech Research Asia

Mark Iles - Executive Consultant, Tech Research Asia

As new technologies and business models flood the market, new customer demands are emerging, placing pressure on partners to adapt and reboot.

Consequently, starting with the customer is crucial when creating any viable channel strategy, with EDGE Research outlining the end-user priorities across Australia and New Zealand (A/NZ).

After quizzing buyers on both sides of the Tasman, a clear picture is emerging for partners, with clarity around who the customer is, how the customer is spending and crucially, what the customer wants.

Following an in-depth research process - delivered during EDGE 2017 -  findings highlight a new-look tech buyer, a buyer that is open to delivering new projects, is in favour of collaboration and craves outcome-driven results.

“The business outlook from both customers and partners during the next 12 months is overwhelmingly positive,” Tech Research Asia executive consultant Mark Iles observed.

EDGE Research 2017
EDGE Research 2017

“This reinforces what we see in our interactions with CIOs and business executives in the region as customers continue to look to technology to drive efficiencies and new revenue streams and are turning to partners to help execute these efforts.

“This is supported by continued low interest rates making funding for expansion attractive along with relatively stable labour markets — noting that some higher-level skills in technology are in short supply in some geographies e.g. cloud and security architects and business analysts.”

EDGE Research 2017
EDGE Research 2017

When asked about budgets the story was equally buoyant with nearly 1/3 of customers planning to increase their IT budgets for the coming year and only 10 per cent forecasting a decline.

“This is obviously a good news story; however, the market has been buoyant before and we didn’t see this behaviour then so what’s different this time?” Iles asked.

Within the context of IT budgets, EDGE Research asked customers to outline where the overall total spend on technology related initiatives and projects was controlled within internal departments, with findings highlighting the emergence of a new breed of technology buyer.

Do you know your new customer yet? Because it’s not the CIO

Partners within the channel have proven to be remarkable change-agents, both in front of customers and internally — Forrester principal analyst Jay McBain outlined the next end-user hurdle to overcome during EDGE 2017.

Jay McBain - Principal Analyst of Global Channels, Forrester Research
Jay McBain - Principal Analyst of Global Channels, Forrester Research

Thinking about the amount of churn in the channel over the past 35 years can be downright dizzying. Starting from the first disconnected PCs to the recent WannaCry ransomware attacks, channel partners have transitioned their skills to dozens of new technology opportunities.

At the same time, they have transformed their business models from resell, break-fix, installation, maintenance, to solution providing and recurring managed services, among others.

The one thing that has stayed relatively constant over these decades is how customers decide and procure technology.

Led by CIOs and IT departments, channel partners and vendors have fine-tuned their product and messaging mix to capitalise on this customer buying journey.

Over the past couple of years, driven by cloud and the growing acceptance of software-as-a-service (SaaS) business ecosystems, this journey just took a hard-right turn.

EDGE Research 2017
EDGE Research 2017

Similar to local EDGE Research findings, global analysts are now reporting that 72 per cent of technology decisions are influenced and/or made by line of business executives.

These leaders of departments such as sales, marketing, finance, operations and HR are increasingly taking ownership of their own digital transformations.

In fact, it is predicted that this number will rise to 90 per cent by the year 2020, according to Gartner.

Here are some other startling numbers that are reflective of this new buying journey:

  • 29 per cent of technology decisions have no involvement by the IT department - business executives are building solutions without internal help and in many cases are using external talent to advise on security, back-up, compliance, disaster recovery etc (Forrester)
  • 52 per cent of business executives are using business-unit budgets to buy technology as opposed to assigned technology budgets from IT departments (CompTIA)
  • 58 per cent of business executives are significantly involved in deciding and hiring third party services firms to implement and integrate these projects (Forrester)
  • 73 per cent of B2B buyers prefer buying from the web or self-service functionality from the vendor —reselling technology and taking a margin will soon become a relic of the past (Forrester)
  • 68 per cent of purchases through distribution are now categorised as simple or transactional — buyers are doing the upfront research, building the solution and in the absence of self-service options, are purchasing at the part number level (National Association of Electrical Distributors)

Business leaders are clearly looking for full-service solutions and are putting together the resources and teams to make it happen.

EDGE Research 2017
EDGE Research 2017

They are increasingly relying on a new set of influencers including SaaS ecosystem partners, industry-based professional services firms, ISVs, born- in-the-cloud firms, and the start-up community - these shadow channels are discussed in more detail in the next round of EDGE Research.

In my opinion, this change is more difficult than adding a new technology practice or specialty to the line card — I even think this is harder than changing a revenue model.

Working with a completely different buyer, with different preferences, motivations, requirements, and levels of influence will profoundly challenge the channel like nothing before it.

Project focus

EDGE Research asked customers to document how many projects and programs of work were scheduled to be delivered this year, with 48 per cent planning to use more external providers than 2016.

Specifically, 57 per cent of local businesses are aiming to deliver more projects than last year, ahead of 19 per cent of organisations seeking to deliver less, while 24 per cent of companies plan to deliver the same.

EDGE Research 2017
EDGE Research 2017

But who are customers going to call?

According to findings, 38 per cent go customers consider brand “unimportant” when selecting a new provider, with five per cent of customers reporting greater satisfaction with their main IT providers today.

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Tags forresterMark Ilestech research asiaEDGE 2017Jay McBain


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