How the Cloud is Changing the Channel Landscape
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A talk at PartnerVIP in Paris that zeroes in on the change Cloud will create in reseller partners.Please download to open to read comments as in the speech I don't read from my slides but use them as visuals. My actual talk is in the comments below the slides.
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How the Cloud is Changing the Channel Landscape
- 2. How the Cloud has Changed Forever the Economy of the IT …and will continue to do so Bob Snyder Editor-in-Chief Channel Media Europe Ltd.
- 3. I Know How You Feel, I Know How You Feel About Cloud http://www.youtube.com/watch?v=aY9GBl7UmVs
- 4. “Squirrely”
- 6. How Fast Does Change Occur? The iPad was announced on January 27, 2010
- 7. iPad is Changing Television 88% of US tablet owners use tablets while watching TV at least once a month
- 8. iPad is Part of A Larger Trend • Apple is changing the IT landscape ...but it’s also changed another... mobile phones. • Mobility
- 9. Connected Devices According to GSMA • 9 billion connected devices in the world today. By 2020, there will be 24 billion and over half of them will be nonmobile devices such as household appliances.
- 10. More Smartphones Than People on the Planet Cisco predicts by the end of this year there will be more smartphones than people on the planet. The forecast also predicts by 2016 there could be 10 billion smartphones. That’s 1.4 mobile devices per capita.
- 12. Connected Age We are still learning what it means to live and work in the Connected Age vs the Information Age •Connected devices will be a US$1.2 trillion market by 2020.
- 13. The Very Way We Do Business is Changing
- 14. Our Future is Cloudy By 2020, there will be a shift from an IT department for end users to a "follow me" IT service provider mentality. In other words, IT itself will move to the cloud. The department that manages cloud services will become a cloud service itself.
- 15. What you describe as Cloud Computing depends upon where you stand in the industry, who your partners, customers and suppliers are.
- 16. How Cloud is Changing IT Integration • Cloud Advisors • Cloud Builders • Cloud Providers (as a Service) • Cloud Resellers (sell Cloud services from another organisation) • Cloud Integrators They construct ‘the glue’ between private and public Clouds or between traditional IT and other Cloud infrastructures
- 17. New KPIs 7 C’s • Cash • Churn • Client Pipeline • Consolidation • Concomitant Monthly Revenue • Customer Acquisition Cost • Customer Value over Life Time
- 18. Their Future is Cloudy More than 90% of the channel has cloud offerings in their portfolios. BUT, the channel has relegated itself to basic applications and services – backup, email, productivity apps, storage – and these offerings will commoditize quickly.
- 19. The Display Becomes the Computer...
- 21. IT’s ALL ABOUT VERTICALS
- 22. 2016: 30%, (9% in 2011) By 2016, 30% of Enterprise Architecture efforts will be supported as a collaboration between business and IT (up from 9% in early 2011), says Gartner Inc. Corporate I.T. networks will move from defence (infrastructure and cost-savings) to offense (building business opportunities and marketplace advantages.)
- 23. How Hard is the Climb?
- 24. How Cloud is Changing IT Integrators Forrester says cloud transformation will lead to the elimination of up to 15% of the channel. Gartner says attrition under cloud transformation will eliminate 40% of the existing channel
- 25. One Example: A Hotel Chain BEFORE: a solitary salesperson, sleeves rolled-up and ready for action and briefcase in hand...face-to-face across a desk with a hard-nosed buyer, playing that wellknown game of “How much? How many? When shall I call back?”
- 26. One Example: A Hotel Chain NOW: It’s about how the hotel builds the best customer experience for their business model, and you’ll be expected to know the business model, chapter and verse.
- 27. How Can We Survive? Forget everything you know about selling hardware and software. Software-as-aService will be about SERVICE, not software.
- 28. New Way to Evaluate Clients The End of Solution Sales by Brent Adamson, Matthew Dixon, and Nicholas Toman
- 29. …from The End of Solution Sales The New Sales Approach
- 30. 1. Establish Your Core Values & Skills.
- 31. 2. EVALUATE YOUR VENDORS. – PREDICT THEIR FUTURE – REGULARLY & IN FORMAL FASHION Bob’s Vendor Vector Matrix
- 32. Evaluate Your Suppliers • Innovation • Product line expansion: • Partner Programme • Logistics • Training & certification • Pricing & payments • Brand • Relationship • Commercial status The Vendor Vector Matrix needs to be consistently applied…
- 33. 3. RE-EVALUATE YOUR CUSTOMERS How profitable are each of my customers? Which vertical industries do I invest in?
- 34. 4. RETRAIN YOUR SALES FORCE
- 35. 5. ADD REAL MARKETING Many integrators lead with their vendors’ brands and reputation. Solution providers need to do a better job of marketing themselves and creating their own value proposition.
- 36. And It Won’t Be Your Father’s Marketing...
- 37. 6. VERTICAL INDUSTRY & SYSTEMATIC SALES
- 38. 6. Growth Is Not a Choice. • The channel is under- capitalized: an average integrator doesn’t have the financial resources to fund transformation. The only way the channel can transform is through growth. • Adding two or three jobs a month and a dozen or so netnew customers per year won’t do the trick. You need HYPERGROWTH.
- 39. Ask Yourself the BIG Questions. BEFORE • How will my business evolve? AFTER RE-FRESH • Where do I want to company to be five years from now? • Do I have the right talent (sales/tech)? • What is our value proposition and how does it distinguish us from competition? • Do I have the right customers? • How profitable are each of my customers? Which verticals/industries do I invest in this year? • Do I have the right vendor partners? • How profitable are each of my suppliers? How do I introduce predictable non-hardware revenue streams into my business?
- 40. I Know What You Are Feeling… But remember, in the end, the SQUIRREL is willing to JUMP, to LEAP, and CLIMB to get his reward. Even the squirrel is fearless and unrelenting in pursuit of a goal.
- 41. Thank you for Listening Thank you for Reading www.IT-SP.eu
Hinweis der Redaktion
- Good morning. I know how you feel this morning… I know how you feel about Cloud, I know how you feel about what it’s like to be an IT integrator chasing cloud… Let’s look at this video and see how well I understand http://www.youtube.com/watch?v=aY9GBl7UmVs
- That squirrel in the video was certainly persistent and dedicated and ran the gamut to reach his final reward. We have an expression in English, called SQUIRRELY… an expression used when something acts in an unpredictable manner, with high energy and frenetic. I pronounce cloud as: SQUIRRELY.
- And I am afraid it will only get worse before it gets…well, more worse… Let’s look into the future… not far…maybe just over a year from now…
- How fast will change occur? How different could 2015 really be? Let me remind you that the iPad was launched at the end of January in only 2010. Coming up on January 2014, it will be just four years that iPad is in this world…
- …And already iPad has transformed the way we view TELEVISION. 88% of tablet owners use it when watching TV. I know I do. So iPad, a product less than 4 years old, has dramatically changed the way we use another technology that has been around for nearly 60 years! iPad is just one example of how change is accelerating…and I believe this reflects the shift of innovation in our society from large business R&D to the consumerization of IT. When I was young, all the greatest innovation came from large companies. You had to work for large company to see it, to touch it…and it was very expensive…gradually trickling down to the consumer over the course of years. Hard to believe, but talk to me about the $15,000 3M fax machine I still have. My wife hates it but it cost me so much, decades later I still can’t bear to throw it out.
- Of course, iPad is part of a larger trend. And we can’t talk about cloud without talking about the mobile trend… the trend to 24/7, anywhere, anytime connectivity… Cloud is even more “squirrely” because you can’t separate cloud from mobility. Is it cloud driving mobility or mobility driving cloud? This is like asking what came first: the squirrel or the nut.
- The impact of mobile is impressive: 9 billion connected devices in the world said GSMA at this year’s Mobile World Congress…even our appliances will be connected to IP.
- AndCisco saysthere will be more smartphones than people on this planet by the end of the year…More smartphones than people…how clever is that? PRESS RELEASE Cisco's Visual Networking Index Forecast Projects Nearly Half the World's Population Will Be Connected to the Internet by 2017 Global IP Traffic Predicted to Grow Three-fold from 2012 to 2017 Cisco VNI Forecast 2012-2017 YouTube Animation VideoCisco VNI Forecast 2012-2017 Key Takeaways (sound bytes) Doug Webster, vice president of product and solutions marketing, Cisco Global Residential Device & Connection Trends Global Residential Service Adoption Trends Global Consumer Mobile Service Adoption Trends Documents Cisco VNI Forecast 2012-2017 Zettabyte Era White Paper (Trends & Analysis) SAN JOSE, Calif. – May 29, 2013 – The Cisco® Visual Networking Index (VNI) Forecast (2012-2017), published today, projects that global Internet protocol (IP) traffic will grow three-fold between 2012 and 2017. Global IP traffic (fixed and mobile) is expected to reach an annual run rate of 1.4 zettabytes ― more than a trillion gigabytes per year – by 2017. On a monthly basis, global IP traffic is expected to reach nearly 121 exabytes per month by 2017, up from about 44 exabytes per month in 2012. (121 exabytes is equivalent to 30 billion DVDs; or 28 trillion MP3's; or 750 quadrillion text messages.) This updated study includes global fixed IP traffic growth and service adoption trends, complementing the VNI Global Mobile Data Traffic Forecast released earlier this year. Global IP Traffic Drivers More Global Internet Users By 2017, there will be about 3.6 billion Internet users—more than 48% of the world's projected population (7.6 billion). In 2012, there were 2.3 billion Internet users—about 32% of the world's population (7.2 billion). More Global Devices/Connections By 2017, there will be more than 19 billion global network connections (fixed/mobile personal devices, M2M connections, et al.), up from about 12 billion connections in 2012. Faster Global Fixed Broadband Network Speeds Globally, the average fixed broadband speed will increase 3.5-fold from 2012 – 2017, from 11.3 Mbps to 39 Mbps. Globally, the average fixed broadband speed grew 30% from 2011 – 2012, from 8.7 Mbps to 11.3 Mbps. Increased Global Use of Video Services/Applications Global network users will generate 3 trillion Internet video minutes per month, that is 6 million years of video per month, or 1.2 million video minutes every second or more than two years worth of video every second. Globally, there will be nearly 2 billion Internet video users (excluding mobile-only) by 2017, up from 1 billion Internet video users in 2012. In 2012, 26% of Internet traffic originated with non-PC devices, but by 2017 the non-PC share of Internet traffic will grow to 49%. PC-originated traffic will grow at a 14% CAGR, while other devices/connections will have higher traffic growth rates over the forecast period―TVs (24%), tablets (104%), smartphones (79%), and machine-to-machine (M2M) modules (82%). As global service providers build out the Next Generation Internet, nearly half of the world's population will have network and Internet access by 2017. The average Internet household (globally) will generate 74.5 gigabytes per month. By comparison, in 2012, the average Internet household generated 31.6 gigabytes of traffic per month. The Forecast also reveals that the "Internet of Things" (the networked connection of physical objects) is showing tangible growth and will have a measurable impact on global IP networks. Globally, M2M connections will grow three-fold from two billion in 2012 to six billion by 2017. Annual global M2M IP traffic will grow 20-fold over this same period—from 197 petabytes in 2012 (0.5% of global IP traffic) to 3.9 exabytes by 2017 (3% of global IP traffic). Applications such as video surveillance, smart meters, asset/package tracking, chipped pets/livestock, digital health monitors and a host of other next-generation M2M services are driving this growth. Summary of Key Takeaways from the VNI Forecast Global IP Traffic Projections and Analysis By 2017, annual global IP traffic will reach 1.4 zettabytes (23% CAGR from 2012 to 2017). – A zettabyte is equal to a sextillion bytes. By 2017, more traffic will traverse global networks than all prior "Internet years" combined: 1984 – 2012: 1.2 zettabytes 2017 Forecast: 1.4 zettabytes "Busy hour" Internet traffic, (hours of the day during which traffic is highest), is increasing faster than average Internet traffic. Busy hour Internet traffic increased 41% in 2012, compared to 34% growth in average traffic. Metro traffic will surpass long-haul traffic in 2014, and will account for 58% of total IP traffic by 2017. Metro traffic will grow nearly twice as fast as long-haul traffic from 2012 to 2017. Content delivery networks (CDNs) will carry over half of total Internet traffic by 2017. Wi-Fi and mobile-connected devices will generate 68% of Internet traffic by 2017. Nearly half of total IP traffic will originate with non-PC devices (including tablets, smartphones, and televisions) by 2017. Standout IP Networking Trends Fixed/Wi-Fi traffic will grow at a CAGR of 26% between 2012 and 2017, compared to a 16% CAGR for fixed/wired traffic Globally, the average household had 4.7 devices / connections (including M2M) in 2012; the average household will have 7.1 devices / connections (including M2M) by 2017 (an 8.8% CAGR). Globally, there will be 8 billion IPv6-capable fixed & mobile devices/connections in 2017, up from 1.6 billion in 2012 (38% CAGR). Globally, 42% of all fixed & mobile networked devices/connections will be IPv6-capable in 2017, up from 14% in 2012. Regional & Country IP Traffic Projections Asia-Pacific (APAC) will generate the most IP traffic by 2017 (43.4 exabytes/month), maintaining its leadership from last year. The Middle East and Africa will continue to be the fastest growing IP traffic region from 2012 – 2017 (5-fold growth, 38% CAGR over the forecast period); MEA was the fastest growing region last year as well (10-fold growth, 57% CAGR for the 2011 – 2016 forecast period) in this category. By 2017, the highest traffic-generating countries will be the United States (37 exabytes per month) and China (18 exabytes per month). For fastest growing IP traffic at the country-level, India will have the highest IP traffic growth rate with a 44% CAGR from 2012 – 2017. Second is Indonesia (42% CAGR) and third is South Africa (31% CAGR) over the forecast period. Regional IP Traffic Growth Breakouts APAC: 43.4 exabytes/month by 2017, 26% CAGR, 3-fold growth North America: 40.7 exabytes/month by 2017, 26% CAGR, 3-fold growth Western Europe: 24.3 exabytes/month 2017, 17% CAGR, 2-fold growth Central Europe: 8.8 exabytes/month by 2017, 21% CAGR, 3-fold growth Latin America: 7.4 exabytes/month by 2017, 17% CAGR, 2-fold growth Middle East and Africa: 3.5 exabytes/month by 2017, 38% CAGR, 5-fold growth Key Consumer and Business Forecast Projections: Global Consumer Internet Video Consumption Globally, there will be nearly 2 billion Internet video users (excluding mobile-only) by 2017, up from 1 billion Internet video users in 2012. Internet video-to-TV traffic will increase nearly 5-fold between 2012 (1.3 exabytes per month) and 2017 (6.5 exabytes per month). HD and 3D Internet Video Traffic By 2017, 3D and HD Internet video will comprise 63% of consumer Internet video traffic. Advanced consumer Internet video (3D and HD) will increase 4-fold between 2012 and 2017. Global Consumer VoD Traffic VoD traffic will increase 3-fold between 2012 and 2017. Global Consumer Internet File Sharing Traffic Peer-to-peer (P2P) traffic will decline at a CAGR of -9%, while web-based and other file sharing traffic will grow at CAGR of 17% from 2012 – 2017. By 2017, global P2P traffic will be 65% of global consumer Internet file sharing traffic, down from 85% in 2012. Global Business IP Traffic Overall business IP traffic, which includes Internet, backup, VoIP, etc., will nearly triple between 2012 and 2017. In 2012, business IP traffic represented 20% of monthly total global IP traffic (consumer IP traffic represented 80% of monthly total global IP traffic). By 2017, business IP traffic will represent 18% of monthly total global IP traffic (consumer IP traffic will represent 82% of monthly total global IP traffic). Global Business Internet Video Traffic Business Internet video traffic will from 5.3-fold from 2012 to 2017. Business Internet video traffic grew 52% in 2012. Video will account for 58% of all business Internet traffic in 2017, up from 31% in 2012. VNI Service Adoption Highlights Also available today, and paired with the VNI research results, is Cisco's complementary study ―the Cisco VNI Service Adoption Forecast, which includes global and regional residential, consumer mobile, and business services growth rates. Topline Globally, the population was 7,160 million in 2012 and will reach 7,563 million by 2017 (1.1% CAGR). Globally, there were 1,996 million households in 2012; there will be 2,167 million households by 2017 (1.7% CAGR). Residential Globally, there were 1,832 million residential Internet users with fixed Internet access in 2012; there will be 2,459 million residential Internet users with fixed Internet access by 2017 (6.1% CAGR). Globally, there were 1,598 million TV households in 2012; there will be 1,744 million TV households by 2017 (1.8% CAGR). Consumer Mobile Globally, there were 3,789 million mobile consumers in 2012; there will be 4,635 million mobile consumers by 2017 (4.1% CAGR). Business Globally, there were 1,408 million business Internet users in 2012; there will be 1,965 million business Internet users by 2017 (6.9% CAGR). Globally, there were 495 million business mobile users in 2012; there will be 565 million business mobile users by 2017 (2.7% CAGR) Supporting Quote Doug Webster, vice president of product and solutions marketing, Cisco "Cisco's VNI Forecast once again showcases the seemingly insatiable demand for bandwidth around the globe and provides insights on the architectural considerations necessary to deliver on the ever-increasing experiences being delivered. With more and more people, things, processes and data being connected in the Internet of Everything, the intelligent network and the service providers who operate them are more relevant than ever." Cisco VNI Forecast Online Resources & Tools The updated Cisco VNI Forecast Highlights Tool provides key forecast predictions in short sound bites that can be chosen on a global, regional or country level (these include device, traffic and network speed projections). The Cisco VNI Forecast and Methodology, 2012 – 2017 White Paper provides the full detailed findings of the study. The Cisco VNI Forecast widget provides customized views of the growth of various network traffic types around the globe (revised for this 2012 - 2017 forecast period). The Cisco VNI Service Adoption Forecast White Paper provides a unique view into global and regional trends of next-generation residential, consumer mobile, and business end-user services and applications, underlying addressable markets and relevant devices and connections. The Cisco VNI Service Adoption Forecast Highlights Tool provides primary global and regional takeaways on user and subscriber, device and connection, and service adoption penetration rates. Cisco's Mobile Service Provider Abstract Network (M-SPAN) and Cable/Telco Service Provider Abstract Network (CT-SPAN) tools enable network operators to generate their own forecasts based on the VNI methodology and assumptions. The Cisco VNI Forecast mobile application enables iPhone and Android smartphone users to view global, regional, and select country-level forecast highlights from their devices. The Cisco Data Meter mobile application enables iOS and Android smartphone and tablet users to easily monitor their cellular and wi-fi data usage, test the performance of their network connection and more. Supporting Resources Cisco Visual Networking Index home page Join Cisco's VNI Forecast 2012-2017 webcast forum discussion featuring key findings, at 8:00 a.m. (PDT) at:http://cs.co/9007XIMx The inaugural VNI Service Awards program will announce the top five winners on May 30, 2013. Cisco received 50 inspirational stories across 108 countries. To access VNI Forecast 2012-2017 B-roll: http://www.corpbroll.com/broll/cisco; Login required; Access via ‘PR' link For more information about Cisco's service provider news and activities visit the SP360 Blog, follow us on Twitter @CiscoSPVideo, hashtag #VNI or SP360 SlideShare *Editor's Note Cisco welcomes press, analysts, bloggers, service providers, regulators and other interested parties to use and reference our research with proper attribution, such as "Source: Cisco Visual Networking Index Forecast, 2012-2017." Tags/Keywords Cisco, broadband speed, exabyte, IPv6, mobile data, Service Providers, Visual Networking Index, VNI, VNI Forecast, IP traffic, Internet video, networked devices, Doug Webster, zettabyte RSS Feed for Cisco: http://newsroom.cisco.com/dlls/rss.html About CiscoCisco (NASDAQ: CSCO) is the worldwide leader in IT that helps companies seize the opportunities of tomorrow by proving that amazing things can happen when you connect the previously unconnected. For ongoing news, please go to http://thenetwork.cisco.com. # # # Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco's trademarks can be found at www.cisco.com/go/trademarks. Third-party trademarks mentioned are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. Press Contacts Sara CiceroCisco Service Provider Video Technology Group+1 770 236 2181stutzes@cisco.com Investor Relations Contacts John ChoiCisco Systems, Inc.+1 408 526 6651johnchoi@cisco.com Industry Analyst Relations Vince VittoreCisco847 678-7604vvittore@cisco.com
- And that’s what driving the number two problem of CIOs in companies. Number One is always SECURITY, but Bring-Your-Own-Device is uniquely positioned to be a Security issue as well as a main user concern. It’s another result of the consumerization of IT that I mentioned. And another example of HOW FAST things change now.
- The advent of mobility leads us out of the Information Age and into the Connected Age. We still do not know “how connected” we will become…
- But we do know that the Connected Age changes the way we do business… as the technology enables us to bring innovation in the way we work…our customers will change the way they do business to exploit the new technology
- And Cloud is a major enabler of mobility, of the Connected Age. With Cloud, even the way the IT Department does business will change. They will change from a “Follow Me…” service provider to a Cloud Provider to their company. Their own services will move “into the Cloud.”
- Imagine you are standing outside Paris, far enough away from the city lights to view the sky in all its splendor…the stars, the constellaltions. Your friend in Australia who is also looking at the sky…How beautiful the sky is tonight, the stars, the constellations– your friend agrees. Both the stars and the constellations you see depend upon where you are standing. Yes, you both see similar phenomenon but nonetheless different. This is the problem when we start to talk about Cloud. What cloud means is shaped by who is talking and what role in cloud they play. Like in the natural world, there is not just one cloud.
- And just like there are different clouds, there are different roles that we in IT are to provide in cloud. We can be advisors, builders, providers, resellers and integrators. I especially think that integration of different cloud services will be an important role for us.
- But our entry in cloud will provoke the need for new Key Performance Indicators. We can learn here from the experiences in SaaS. There are at least SEVEN KPIs you will want to watch closely, systematically and formally in your IT cloud integration.
- IN the USA, one survey showed more than 90% of resellers already offer cloud…BUT the entry level, first generation of cloud will quickly commoditize. In this segment, you have to remember what they say about Software-as-a-Service: it’s not about Software, it’s about the SERVICE.
- WE need to mention here that as we move into the Cloud, the display becomes the computer. It’s important not to lose track of this last bit of hardware…
- …and especially because it means the IT industry is transforming into the Digital Signage business. Now, digital signage to you could mean RETAIL but it’s actually far more than that as cloud turns all the screens into a broadcast media as well as their local service. Think about how a Smart Building will use displays throughout the building. Or the fact that one of Bill Gates only personal patents is a system that allows him to control all and every screen in his massive home. Each screen will have the possibility to become an IP billboard…and this is the reason why Intel and Microsoft are funding their old, traditional partners like AOpen and Advantech to scale up and massively attack the divisive digital signage industry.
- With the shift to Cloud, to the Connected Age, Tier 1 IT vendors are changing the way they work with resellers and integrators. Now they desire, they covet VERTICAL INDUSTRY EXPERTISE . They will reward channel partners that have it or develop it: but penalize those who don’t. How do they penalize? By holding back funding, by denying certain certifications. Their thinking is that they can drive channel behaviour through classic reward-punish tactics. But why are they doing this?
- Because they believe Corporate IT will move from “defense” (building infrastructure as requested by business groups) to “offense” (creating new ways to do business, driving business group value through innovation). Gartner suggests that by 2016 more than 30% of the IT business will be done via this new collaboration between IT and business. Tier 1 companies, especially those based in Silicon Valley, move in herds when they see the Next Big Thing. And the NBT in channel is making sure your partners are prepared for the future, prepared to add value by adding vertical industry expertise.
- How hard will it be for the channel to get on board with what Tier 1 vendors want? How difficult will the climb be to the new partner requirements?
- It will be so difficult that Forrester says 15% of the channel will NOT make this transition into the future. Research company Gartner disagrees: they believe almost 40% of the channel will DIE in the next few years. Remember how fast the iPad change came on…
- Let me give one short example. The way you probably sold IT to a hotel chain. Your salesperson identified the client and met across the table with a buyer. The salesperson discussed business and tried to find a need, a hook that they buyer would see as a solution to his problem. Then the buyer asked for prices and either he oryour salesperson built an ROI case to justify the cost with his management. Now the change: today the decision-makers may be a group of people working in different countries collaborating on technology. They have already looked at you and your competitors on the web. They know the prices, the models. Heck, they probably even know the prices of the components going into your products. What Cisco wants, for example, is for their partner to know just as much (if not more) about what drives the hotel business. And the salesperson should act like a guru of business and propose innovation that leapfrogs competition. You no longer look for problems: you propose solutions to grow their business. For that expertise, Cisco will certify you and fiscally support your efforts in the hotel business.
- Let me give one short example. The way you probably sold IT to a hotel chain. Your salesperson identified the client and met across the table with a buyer. The salesperson discussed business and tried to find a need, a hook that they buyer would see as a solution to his problem. Then the buyer asked for prices and either he oryour salesperson built an ROI case to justify the cost with his management. Now the change: today the decision-makers may be a group of people working in different countries collaborating on technology. They have already looked at you and your competitors on the web. They know the prices, the models. Heck, they probably even know the prices of the components going into your products. What Cisco wants, for example, is for their partner to know just as much (if not more) about what drives the hotel business. And the salesperson should act like a guru of business and propose innovation that leapfrogs competition. You no longer look for problems: you propose solutions to grow their business. For that expertise, Cisco will certify you and fiscally support your efforts in the hotel business.
- How can you survive in a Cloudy world? Forget everything you know about selling hardware and software. When you see Software-as-a-Service, more and more your world will be about service. And service will be redefined to mean business enablement.
- You will evaluate clients in a new way. This is just one example, from the guys who wrote The End to Solution Sales. This form profiles your client. It no longer speaks of clients in terms of statistics… the way you have been tracking clients has been so 2-dimensional. How many employees, how many branch offices, how much sales volume…blah, blah, blah…that’s all just STATISTICS not a profile. Now you’ll be tracking the culture of the client’s company, how it operates, and whether it is a first-mover or a follower. Your big business, according to these authors who modelled it AFTER researching America’s most successful IT salespeople, will come from identifying and motivating companies who want technology as their differentiation in the marketplace. And, Cisco, as an example again, wants you to show you know this customer and how it will embrace technology.
- The New Sales Approach suggests YOU have be the one suggesting a provocative way to change their business. Remember you are no longer waiting for the client to show “pain points” that you can hang a solution on. No, we are no longer going to be playing a defensive game. We are going ouot on attack.
- Please let me summarize some of the steps you will need to take. First, establish your CORE VALUES and CORE SKILLS. You have heard this before and you’ve probably casually thought about, made a mental list or two. But today’s message is different. You need to systematize this self-profile, to embrace it and make it a formal procedure that you review with frequency as your employees and your business changes. You need to find your differentiator and woe is to your company if you don’t find a way to set yourself apart.
- 2. You will need to evaluate your vendors like never before. I call this Bob’s Vendor Vector Matrix. Most IT system integrators have little or no system in place to consistently evaluate suppliers. Manufacturers, on the other hand, have constant evaluation of their distribution partners—benchmarks driven by evaluation and performance. At least twice a year ( and maybe even quarterly), you should take a day to build your Vendor Vector Matrix. For a distributor that could be their “product lines,” but more and more in IT we’ll be selling cloud services and software so “manufacturers” and “product lines” will yield to a more all-encompassing word like “vendor.” Probably many of you evaluate what percent of sales and what percent of profit your manufacturers and service providers contribute. And that’s great as both are Key Performance Indicators. Yet these two simple vectors simply are not enough to capture the whole dynamics of a vendor relationship. We tend to bump along and pick up opportunities...like hunters taking game. Instead, we should be more like farmers, carefully picking our crops, growing them, and always conscious of crop rotation and market-value For any integrator, including a distributor, the “vendor” relationships you have are really no different than the hand of cards you may hold in a card game. In real life when we pick up something, like a product line, we tend to hang onto it because...well, because we are hanging on it. In business, particularly a business that integrates products and services from different vendors, you need to know when “to hold ‘em and when to fold ‘em”. And you also need to know when and how to pick ‘em. And that’s where your Vendor Vector Matrix comes in. In mathematics, a matrix is a rectangular array of numbers, symbols, or expressions. The individual items in a matrix would be called its elements or entries. But in our case we will use “vectors” instead of elements.
- “Elements” are too two-dimensional and too static to capture the magnitude and direction of your vendor partners. In IT, Gartner Research is famous for its proprietary “matrix” known by its brand name: the Magic Quadrant. Gartner defines each industry segment by using a Magic Quadrant that shows which vendor has momentum and leads the direction of that particular sector. So if you were to build a matrix of the vectors or tendencies that matter in a relationship between you and your suppliers, what else would you evaluate? We mentioned “contribution,” that is, how much sales and profit each vendor brings you. There are other factors that affect (and therefore predict) what will happen in the future in any given vendor’s contribution in sales and profits. Here are some suggestions Innovation: does the vendor innovate often and add more reasons to buy their product? Is it a leader or an also-ran? Product line expansion: where is the vendor’s product range going? Will it be entering into competition with any other of your vendors? Will they be demanding full range loyalty and penalizing you for anything less? Partner Programme: does the vendor offer a formal programme of cooperation that clearly marks out your commercial interests as well as theirs. Logistics: is the vendor good at getting you what you want on time? Training & certification: is the vendor offering free training? Do you have to buy certification? Pricing & payments: how stable is their vendor? How flexible are their payment terms? Brand: is it a known name and therefore easy to sell? Does it add a halo to your own company reputation? Relationship: How easy or difficult is it to work with this vendor? Does the salesperson working with you change too often? Commercial status: How is the vendor faring? Most of you don’t keep track of your vendor’s business success and that could be a costly mistake. Is the company profitable? Are its sales going up faster than its industry segment average? Is it a take-over target? Many of these points are common sense. In fact, when a company is young, and its founder has only two or three vendor relationships, the founder probably keeps track of all these factors without even realizing it. Twenty years later and now with 12 product lines... circumstances have changed. You need to install a formal process that captures these types of detail each six months, a process that puts it on paper with a ranking scale that allows you to evaluate from the last to the newest vendor review. Each review zeroes in on the details that help you decide on your own commitment to your vendor, to focus your energies on the most rewarding relationships, to consider dropping lines. (Yes, fire your unprofitable or problematic vendors. It’s for the best. Believe me, they would fire you if the shoe was on the other foot.) Part and parcel with this exercise, you will need to consider the context of the industry segment of each vendor. For example, if it’s a video security vendor, how fast is the entire market growing? Where does this vendor fit in to the overall market? Who are the competitors and which partners have they chosen to be your competition? And that should lead you to another important question in the vendor evaluation process: what other products or segments would be compatible and even desirable to further sales? For example, if a company takes on the distribution of displays...should you consider adding a line of display mounts? It makes no sense to go heavily after display sales without making money from the mounting. You should always want to know where your next step could go, based on each vendor’s vectors that show you where your vendor is headed (not where the vendor is today.) Much of this Vendor Vector Matrix can fit on two sheets of paper and you won’t have anything more valuable than those papers.
- I’ve already talked about Client Profiles and Evaluation but STEP 3 encourages you to FORMALIZE the procedure and implement this as a business process.
- STEP 4 will not be easy. Experts like Gartner suggest that 2 out of every3 salespeople you have today will NOT have a job tomorrow. Because they could not make the switch to selling cloud, to selling services, to moving to a business leadership role instead of solution selling. Solution selling today is as bad as box moving was yesterday. We are moving up the food chain to preserve profit margins and avoid the part of the cloud that will quickly—with iPad speed– become commodity. The move to verticals may find you firing and hiring, as you replace Old World salespeople with people who are already experts in vertical markets. How else will you add experience to your portfolio?
- STEP 5. You’ve been avoiding this for year’s. You prefer to rely on vendors doing the marketing for you. When you do any marketing at all, you push the vendor’s brand ahead of your own. Now it’s your turn…
- It’s your turn because it is no longer your father’s marketing. It’s not about print ads, radio ads, TV ads…although you may work yourself up to that level. Today it’s all micro-marketing…social media marketing…being a part of your client’s COMMUNITY. Does your customer have Twitter? Or maybe an internal chat messaging system? How you influence decisions will depend upon your ability to talk to Generation Y.
- STEP 6. We’ve talked about selling and here we can only add it is the systemization that we are looking for. The business process that links your selling with your new business mission of cloud and verticals. Once you’ve re-trained (or hired a new) sales force, the way they approach the market needs a process. I can’t tell you how many companies ask me where to find customers in other countries and I know they have never made a sales call on the hotel I am staying in. If I was an integrator, the first thing I would do is AUDIT every prospect with 50km. Historically we left this to a salesperson with a local territory or we depended on leads from our vendors: but I would own the responsibility to AUDIT my immediate market and make it part of the process that it is served first.
- Some experts are saying even seemingly spectacular growth numbers of 25%, 35% or 45% are not enough. Integrators need hyper-growth in the healthy triple digits to ensure sustained profitability and viability. If this shocks you, think about the early decades of the computer industry. How did an Ingram Micro, a Dimension Data, a Cap Gemini get so big? They didn’t do this by setting their goals on growing with 10 or 12 new customers a year. Cloud is a transformation, a new start, a refresh so to speak… a chance for new winners, a chance for challengers to outrun incumbents. Believe it first, then make it happen.
- And finally ASK YOURSELF THE BIG QUESTIONS for your company refresh to cloud.
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