TOP 10 MONEY MAKING TECHNOLOGIES
Even with the economic downturn, businesses of all shapes and sizes are still purchasing technology. Some in the hope it will provide a competitive advantage while others seek to reduce costs and boost efficiency. Following a straw poll of several experienced channel partners, industry experts and analysts, we have compiled a list of hot technology areas for 2009 with the potential to unlock closely guarded IT budgets.
#1) Virtualisation
Although not a new technology, virtualisation is currently one of the hottest topics within IT. The meteoric rise of VMware from dotcom darling to revenues of $1.8bn in 2008, highlight the potential for the technology. For customers, the ability to get better utilisation and more flexibility without adding more servers is pretty compelling.
On paper, this may seem like a bad deal for hardware sales and corresponding data from analysts like IDC indicate the worldwide server market has declined. This is largely due to the current economy but virtualisation has also helped slow down demand. However, few organisations have the internal resources required to successfully migrate to a virtualised environment and this knowledge gap is where the channel can add value. Although VMware is the industry heavyweight, rivals such as Microsoft, and even open source alternatives such as Xen, provide a lot of scope for value-add.
#2) Green Technologies
Awareness of green issues is still extremely high across almost every business sector. A number of governments are set to launch Carbon trading schemes while many large corporations have made previous commitments to reducing their carbon footprint which now need to be met. Going ‘Green’ also offers tangible cost benefits while providing opportunities for IT systems integrators. For example, less air travel for staff reduces carbon footprint and expenses while increasing demand for videoconferencing solutions. While software like Verdium and hardware solutions like ByeBye Standby allow organisations to automatically power down computers and office equipment to reduce energy consumption and related carbon footprint.
For the channel, everything from low-energy consumption desktop PCs based on Intel Atom processors all the way through to teleworking solution all have a potential green element. While a plethora of online calculators for carbon and energy saving can help support the case for green purchases on a much more practical costs saving basis.
#3) Cloud Computing
Cloud computing deserves it place in any hot technology list simply for its domination of news feed column inches and its industry changing potential. For all the hype, it is unclear whether anybody other than Amazon and Google is actually making any money from it. In essence, the cloud delivers computing environments, infrastructure or whole applications as an internet based service. The promise is a utopian utility model where IT is a simple as turning on a tap. A world where you only pay for what you use, systems can scale easily on demand and somebody else worries about all the service delivery, resilience and disaster recovery issues.
Unfortunately for the channel, many cloud computing vendors are pitching this relationship directly with end customers. Although in reality, few end customers have the desire or knowledge to migrate. Many potential customers also express doubts that these big vendors will provide the levels of customer service they expect. So the channel has an opportunity to act as the middle man for enabling cloud computing. Both as trusted advisor and value-added reseller of tailored cloud computing services. The cloud is still a pipe dream for many, but channel partners who get in early could well carve themselves out a highly profitable revenue stream.
#4) Storage
Based on recent technology trends, the quote by Benjamin Franklin that “In this world nothing is certain but death and taxes,” should add the amendment: “…and more data”. With almost every business activity now backed by IT systems and requirements for sharing and retention mandated across every industry, the sheer volume of data is growing almost exponentially. Even small businesses regularly store several terabytes of critical business information while larger organisations are now looking at multi Petabyte data archives.
Over the next few years, hi-def videos and requirements to archive audio are likely to push demand even higher. Although vendors like EMC and NetApp have strong and established channels, alterative rivals like Isilon and Panasas in the clustered space offer a compelling argument for certain vertical markets. While the SME sector is becoming increasingly savvy over data backup with firms like Buffalo, Synology and Cisco with its Linksys brand all pushing low cost, high capacity storage. Although storage is a highly competitive sector, it is still growing and offers steady returns even during these tough economic times.
#5) Web 2.0 security
Much like its equally hyped driven cousin ‘cloud computing’, Web 2.0 is another technology term often confused, misused or misunderstood. The simplistic approach would be to categorise any website that offers a social networking element as Web 2.0, some may argue with this definition but c'est la vie. The problem with Facebook, Twitter, Bebo, Youtube and the other hip kids in the Web 2.0 playground is that they can potentially introduce risks into secure environments. Not just simple vulnerabilities but also social engineering risks that prompt normally sane people to breach company rules on internet access or information disclosure.
The security vendors have spotted this concern and launched a range of products that aim to allay these fears. Newer vendors like Palo Alto and Websense are set to flourish while the old guard like Symantec and Sophos are quickly repositioning existing technology to fight this new perceived thereat. For the channel, somewhat cynically, Fear Uncertainty and Doubt (FUD) is still an effective sales tool. FUD will also grow as many of these Web 2.0 technologies become more complex and pervasive. Channel partners also report bursts of enquires after new vulnerabilities are announced or a Web 2.0 site is implicated in a security breach. Considering how few organisations have defined formal policies to deal with Web 2.0, the market for related security product could well be huge.
#6) Compliance Solutions
The supposed failure of international regulators to limit risk taking by the financial firms has placed compliance high up on the agenda for many organisations. Guidelines such as PCI, mandated by the big credit card companies, have serious penalties for failure. Many imported regulation like Sarbanes Oxley (SOX), Markets in Financial Instruments Directive (MFiD) and Health Insurance Portability and Accountability Act (HIPAA) are forcing UK companies with trading links to the US or Europe to get complaint.
The opportunity for the channel is obvious but it’s not an easy path. Gaining competence in providing compliance solutions requires an investment in people and training. However, many of the large ERP, finance software, and security vendors are offering products and training around selling compliance and demand is likely to grow, especially within financial and government sectors. Channel partners who specialise in a particular vertical market that either has, or about to get a compliance framework, are best placed to transition horizontally and successfully break into these new areas.
#7) Call Management
Voice over IP made a few channel partners very rich. The technology provides a quantifiable business benefit backed by some decent industry standards to help interoperability and promote adoption. Many organisations are still slowly moving to VoIP but the big headline accounts have already switched and major new implementations are less common.
However, call management is a related area that still offers clear benefits with decent margins for VARs. Although a broad category, call management allows organisation that have adopted either pure VoIP or a mixture of legacy PBX and IP technology to get more out of their investment. This can range from cracking down on fraud, securing voice channel against eavesdropping or better integrating mobiles into corporate telephony and billing.
One immediate benefit for the channel is that vendors like Tiger Communication and Mind CTI only require partners to sell while they handle implementation directly with the customer or as a sub contractor. Although most of the FTSE 100 already has some form of call management, many midsized organisations still don’t or are using often limited tools provided with the original PBX or VoIP installation. As all communication converges around IP, call management will become a necessity not luxury for a significant customer base.
#8) Managed Services
Over the last decade, as direct vendors decimated the traditional hardware market forcing margins to drop, many VARs turned to managed services for revenue. Although the headlong rush into services was possibly ahead of actual demand, the current climate of cost cutting has made it far more attractive. The IT industry has also changed with a whole host of vendors offering channel partners pre-packaged managed services to sell on with minimal additional responsibility. The range is extensive and diverse and includes data backup, remote monitoring and hosted telephony. By removing the cost of developing managed services in house, the channel can concentrate on selling and delivering the modest integration processes these services require.
Even though individual customer revenues are often quite small, churn is still low and these monthly residual revenues can quickly mount into a substantial income with little ongoing costs. One major concern is the fear that key vendors will simply take their product direct and marginalise the channel but if previous experience is anything to go by, end customers still prefer to deal with a trusted local supplier than direct vendor when it comes to critical IT systems. A lot of the smaller and more agile vendors including A-server, TeleWare, and Nimsoft are exclusively targeting VARs keen to convert to MSPs with low barrier to entry solutions. In the background, the bigger players like HP and Cisco are gearing up for change but are still wrestling with concerns of their huge and vested channels.
#9) Thin Clients
Intel’s co-founder, Gordon E. Moore, successfully predicted that processing power would double approximately every two years. Moore’s law envisaged powerful computers that would solve supposedly impossible physics problems or help create spectacular special effects for Hollywood blockbusters. However, for the last two decades, the world’s most popular business software namely Microsoft Word barely uses five percent of the available processing power on a typical PC. “Moore’s Law” seems like a bit of a waste. However, with the rise of virtualisation and green computing, organisations have become more conscious of doing things efficiently. Although less glamorous than Intel’s latest quad processor behemoth, the market for thin clients has grown nicely over the last decade. Vendors like Wyse, Blueberry and even HP have all quietly expanded their footprint for low powered, efficient and highly secure thin clients.
For the channel, going thin can help respond to a RFP with an unrealistic budget if you offered a only a traditional desktop PC approach. In some cases, low power consumption may swing it for a green focused customer while the easy with which thin terminals can be secured against client side breach makes them attractive in high security environments. Getting into this market is relatively easy as the hardware is pretty standardised although convincing an entrenched customer to go from fat to thin still requires the skills of a persuasive sales person. Even so, Analyst Gartner expect annual demand for thin clients to reach 20m units by 2012.
#10 Open Source
A few years ago, Open Source would have been much higher up a top ten tech list, or maybe even not even mentioned in any list related to the value-added reseller channel. The notion of free software, created by the people, for the people, has been anathema to Microsoft, other large enterprise vendors and all their respective channel partners. How do you compete against free? Well, the reality for the channel is that you don’t. Instead, the smart partners have sold expertise and implementation skills instead of licences and tin. The key to offering a credible open source portfolio is investing in training and developing expertise and moving to a service based model which is at odds with box shifting.
The channel needs to watch open source and be ready to respond with a credible offering that accepts that the gravy chain of proprietary software is no longer certain to dominate. Ostrich-like avoidance is not an option. Some channel partners now routinely provide an alternative “open source” responses to RFP’s that uses a licence free alterative to reduce headline cost while still delivering good margin in professional services. Organisations that fail to consider viable open source in areas like mail and web servers or even low-transaction count databases risk being priced out of the shortlist.
