'Choice and flexibility': how A/NZ distributors are rethinking their post-pandemic models

L-R: Andy Berry (Tech Data), Phil Cameron (Westcon-Comstor), Tim Ament (Ingram Micro).

With every major technological shift since the 1980s, distributors have been forced to refigure their roles and evolve their business models with lightning speed. 

First it was the dawn of software and subscriptions; then came the disruption of cloud computing in the last decade; and now in 2022, it is everything -- as-a-service. 

Admittedly, this trend, along with the continuous growth of cloud, "sounds obvious", but the signs are very clear, according to Tech Data vice president and country manager of Australia and New Zealand Andy Berry.

As a result, Berry said, this means "flexibility, the desire to be not locked in to either a long term technical or commercial arrangement and the pursuit of quick return-on-investment on projects is causing everyone to need to adapt." 

Heightened by the unprecedented explosion of remote working, the demand for flexibility has fallen on both businesses and employees alike, putting more need on technology to accommodate. 

Now, according to Gartner, 69 per cent of boards of directors say the effects of the pandemic crisis, the economic crisis and the social crisis are accelerating digital business initiatives, with McKinsey Global Survey claiming that digital transformation projects have been accelerated by up to four years.  

Speaking to ARN of these trends, Westcon-Comstor managing director Phil Cameron said businesses now cannot be "bound by traditional ideas of space and time when working together."

"Instead, we can shift our assumptions about work and embrace choice and flexibility," he said. "As we all adapt to new hybrid work models, business leaders and employees alike can rethink their operating model for a successful and sustainable shift to hybrid work that works for everyone." 

According to Ingram Micro A/NZ chief country executive Tim Ament, this shift has seen the distributor completely redesign its cloud organisation with a focus on partner experience.  

"This includes teams in software-as-a-service (SaaS), infrastructure-as-a service (IaaS) and in customer success teams to help our customers adopt, retain and expand on the subscriptions that have been purchased," he said. 

According to Ingram Micro, 2022 will be further fuelled by rapid data centre transformation, giving partners opportunities in the multi-cloud and hybrid cloud space, especially in the field of IaaS. 

Nevertheless, as Cameron points out, today's fleet of as-a-service solutions are "dynamic in nature," meaning partners will need to be on top form in terms of customer service.  

"The software development cycle is agile with updates added regularly, extending the useful life of the solution well beyond the initial sale," he explained. "However, this lifecycle now needs to be managed pro-actively to deliver ongoing value.  

"While the subscription model guarantees recurring revenue, it also empowers customers to switch or discard solutions quickly if they do not see measurable value. This has prompted the channel to pivot towards delivering the customer’s desired business outcomes by using a solution, not just once, but consistently every day of a solution’s life." 

Multi-cloud, multi-vendor 

Since long before the COVID-19 pandemic, enterprises with a long history and backlog of technology solutions have increasingly sought to find efficiencies and break down silos in their organisations. 

With huge swathes of the global workforce still working remotely or adopting hybrid practices, this need has hit tenfold. This, according to Ingram Micro Australia's director of advanced solutions Brett Armstrong, starts in the hardware itself. 

"We will see larger proportions of workloads moving to cloud giving rise to multi-cloud and hybrid cloud opportunities especially in the IaaS space," he explained. "This also means more opportunities in the professional and managed services space. For instance, deploy, manage and optimise the hybrid infrastructure on an ongoing basis. As a distributor, we want to add value by bringing in multi-vendor platforms to develop solutions for the partner community.”

The need for multi-vendor and cross-selling solutions was also echoed by Berry.

"Increasingly there is a need to combine multi-vendor solutions between large established vendor solutions and newer born in the cloud or independent software vendors," he said. "These have to be easy to consume and implement and not require enormous investments in people or certification in the early stages.

"Distributors who can be ahead of the solution curve and speed the partners adoption of incremental solutions will be the most valued." 

Meanwhile, for Ingram Micro's Armstrong, enterprise automation will be the next incarnation of operational efficiency that neither partners nor enterprises can ignore. This area has led the distributor to invest heavily in its global partnership with UiPath. 

"This partnership will give our channel ecosystem opportunities within enterprise automation," Armstrong explained. "Investments are being made by enterprise organisations because of the immediate and measurable return on investments coupled with improvement to staff and customer experiences.

"It will also assist our partners to generate new service models and create value added services within their customer ecosystems.”  

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For Cameron, operational efficiencies will be critical for businesses given the current environment of "multiple demand and supply stressors affecting supply chains world-wide". 

These include the global chip shortage, pandemic-driven disruptions to logistical supply chains and a pressure on talent and resourcing, especially in A/NZ. 

"This has led distributors to consider more logical and innovative ways to help future-proof these businesses," Cameron explained. 

Alongside the technology side of automation and digital transformation, these solutions also include a more holistic approach of employee wellbeing, collaboration and sustainability.  

"The digitisation and the use of digital technologies to transform existing business processes and drive customer engagement will be a critical asset of the supply-chain network of the future," he added.

"Today, if your business isn’t designed and optimised for resilience in the face of severe disruptions, natural disasters and pandemics, then you are severely limited in terms of how you can meet the demands and expectations of your customers. You are also restricted when it comes to your ability to scale and grow." 

Security 

Without a doubt, one trend that has fully made its way to the distribution table in recent years is security. 

For Berry, the biggest change is that security is now a part of every conversation, either as a pure play solution or as an integral part of securing any software, hardware or networking design. 

In the past, though, this was far from the case. As Cameron explained, products were previously delivered physically and software ownership was transferred to the end-customer, while product support was reactive at best. 

"These static solutions required wholesale upgrade or replacement at the end of their useful life," he explained. "Failure to do so left end customers at risk of cyber attacks or business interruptions." 

However, in the wake of multiple global cyber attacks, including several to hit Australia and New Zealand, proactive measures are now a must, Cameron argued. At the centre of this is securing a business’ core network and putting threat detection and visibility at the forefront. 

Areas for partners and customers to remain focused on include: 24/7 monitoring of end-point connections; robust security access policies; security orchestration automation and response capabilities, and a zero trust security framework to prevent unauthorised access to critical data. 

Yet given hackers' abilities to squeeze through the smallest of security vulnerabilities, Ingram Micro Australia's head of cyber security, Rod Lazarus, admits that securing customer networks is "increasingly difficult". 

"Security is fast becoming a topic for not only the CISO and CEO but also at the board level," he said. "It will require this level of oversight and governance to effectively build the right security frameworks that are needed to protect a company’s assets. 

"The edge of their networks is now in someone’s living room and not the office building or data centre. There are many products in the security market that each have their own strengths and weaknesses and it is hard to know what to choose. Sometimes, using the latest in the market may not always be the best fit." 

As such, he argued, organisations and partners should be looking at security frameworks such as zero trust, NIST or Australia's Essential Eight to provide protection, visibility and, crucially, ensure employees are full trained on correct protocols. 

Although building out a security practice has recently been touted as a way for managed service providers to gain new sources of revenue, Cameron reiterated that this "certainly isn’t something that can happen overnight". 

"The cyber security market is complex, fragmented and rapidly changing," he explained. "Building a security practice can require significant investment in new technology, processes and a security operations centre (SOC) among other considerations, which may be a risk with the current uncertainty generated by Brexit and the pandemic.  

"It also demands skilled cyber security professionals – while managed security services providers (MSSPs) can help bridge the continued cyber security talent gap within customers’ organisations, the same skills shortage is a major barrier in their attempts to recruit and retain security experts." 

While the MSSP route may not necessarily be the next iteration of the MSP model, that is not to say 2022 will not bring evolution of current partner business models. 

Returning to the as-a-Service question, Berry argued: "There’s a lot of discussion about everything-as-a-service (XaaS) models from mid-sized partners.  Some are investing, most are still figuring out what’s going to work for them." 

For Ingram Micro solutions development consultant Dave Leabeater, cashflow management will become increasingly top of mind for partners due to customers' demand for flexibility and its effect on their technology needs.  

"The flow on effect for both value-added resellers and MSPs is to protect cashflow, risks, upfront revenue, whilst maintaining the ability to move with the customers changing needs'," he said. "What we are seeing in the market is a greater request and increasing understanding of the benefits of a true OPEX model. An example would be how this model reduces risks of over funding in technology obsolesce.”