It’s been an interesting year for the BI channel – and 2016 looks set to be no different
Here are our predictions on what we believe next year has in store for the channel, in particular for the data and analytics industry.
- 1. Cannibalisation of the channel
Next year will see many vendors looking to take back control, rather than invest in their channel partners. The danger for the channel is that this will result in vendors keeping good deals or redirecting services projects back to themselves. Platforms such as Amazon Web Services and Microsoft Azure have grown exponentially this year. Another risk is the continued trend of vendors developing hosted solutions, via platforms such as these that cut out their channel partners. In response to this, the channel needs to look for vendors with a transparent indirect strategy in place and form mutually beneficially relationships.
- 2. A desire for simplicity
Negotiations between vendors, channel partners and clients can be complex, particularly if there are multiple layers to deals. For example, when it comes to BI solutions, a large corporation won’t want to purchase different licenses for different types of users, or for access to different types of functionality within a product, as this can be confusing and expensive.
As the market grows and new BI offerings become more competitive, 2016 will see greater demand for a streamlined selection of reporting and analytics tools and deals based on single, simple all-inclusive licensing types will become more popular. Channel partners that can offer an all-encompassing platform and reciprocal licensing model, which enables large deployments, will prove popular with businesses. This all-inclusive and simplified approach will allow clients to benefit from pervasive analytics at every level of the business without complexity or extra cost.
- 3. Widespread cloud adoption
As expected, 2015 saw the accelerated adoption of cloud-based deployments due to a range of proven benefits, including improved flexibility, scalability and value. Amazon Web Services and Microsoft Azure have seen particularly strong growth. This greater acceptance of the cloud across all sectors has further increased the obligation for channel partners to turn to the cloud themselves, rather than sticking solely to traditional on-premise product sales.
The channel should be looking to partner with vendors who assist them to develop and deliver their own hosted solutions to meet bourgeoning demand for cloud-based solutions.
- 4. Pervasiveness of Business Intelligence
Named by Gartner as the top investment priority for CIOs in 2015, demand for BI and analytics today is still growing steadily. We can expect IT channel players in the UK, who are not currently selling BI tools, to expand into this area over the coming year as demand across all major industries for reporting and analytics continues to increase.
Rising demand across most industries has also seen a rise in the number of specialist channel partners offering BI and analytics services and implementations to specific vertical sectors. Simultaneously, we are also seeing more ISVs embedding analytical applications into existing solutions to quench end-client thirst for analytics.
- 5. From simple implementation to ongoing service contracts
As demand for core enterprise technology – particularly surrounding data and analytics – has grown throughout 2015, we’ve seen a shift in the nature of doing business. Relationships with customers are changing for channel partners. Sales cycles are increasing, spurring a bigger need for more closely managed accounts. With this, 2016 will see channel partners striving to enhance relationships and further increase customer lifetime value by delivering a high-quality, personalised experience. To do so, we can expect to see the re-architecture of marketing and delivery capabilities, and the implementation of loyalty programs to drive affinity.
In order to increase customer value and offer continued support to customers throughout the relationship cycle, the channel will need closer partnerships with vendors. A stronger VAR-vendor relationship is more attractive to clients as they know they have a true channel to the vendor, if required. And, by having closer relationships on both sides, resellers will be better equipped to propose tailored offerings and truly help customers solve real business problems with technology.
- 6. Customer demand will continue to be king, but resource planning is crucial
On a similar level, we believe the channel will respond to customer demand in 2016, partnering with vendors who are delivering solutions that customers want – as opposed to products vendors are trying to push where there is unknown demand. This strategy makes business sense and will further enhance customer relationships and value.
However, there is a slight danger that UK channel players will spread themselves too thin. As such, resellers need to be careful about where they put resources – in terms of salesforce and investment – as they go into 2016. Channel operators will need to prioritise resources to meet both customer demand and fuel sectors where they have significant expertise.
2015 has seen significant change in the technology market – in terms of both consolidation, such as the EMC/Dell acquisition, and disruption, such as the HP split. As a result, the most successful channel players of 2016 will be those that are strategic about where they invest. Strategically investing time and money in this manner will enable channel operators to manage portfolio overlap while also responding to disruption in the market to identify and capitalise on expanded sales opportunities with loyal partners.
Pete Baxter is managing director EMEA at Yellowfin