Channel Research Portfolio · very limited recurring revenue project based mostly SMB end-users high volume, lower prices “lifestyle” business Transformative: relationships with

1© 2015 IPED – The Channel Company

Channel Research Portfolio

Q1 Q3 Q12010 2011

Q2

Evolution of Technology Delivery Model: SaaS in the Cloud

Empirical survey of >300 North American Partners & >300 Customer

Customer Cloud Adoption: Drivers & Triggers by Market Segment

Empirical survey of >1,000 Mid-market and SMB customers

SaaS

Q3 Q12012

Q4

Interviews with >100 vendor and channel execs

Channel Cloud Migration: Issues and Trends

Evolution of Technology Delivery Model: IaaS in the Cloud

Empirical survey of >300 North American Partners & >300 Customers

IaaS

Partner Profitability in Hybrid Cloud Computing

Empirical survey of >300 North American Partners

Mobility in the Cloud: Partner Revenue Sources


Q3

Cloud Route-to-Market Migration Vendor Channel Investment Trends

Blind survey of >50 Cloud Solution Vendors

Changing Buying Behavior in the Cloud: Move to BYOD and LOBs

Empirical survey of >300 North American Partners & >300 Customer

Q2 Q12013 2014

2014 Channel Census

Empirical survey of 730 North American Partners

State of the Market 2013:Cloud and Managed Services in the New IT Ecosystem

Empirical survey of >387 North American Partners and 319 End-users

Enablement & Marketing:In the Channel


Vendor Benchmark & RTM Migration:

Vendor channel investment trends; Survey of 100 vendors

2015

Channel Research Portfolio

Annual Vendor Benchmark

Sales Model Transformation:

Empirical survey of 244 end-users and 442 solution providers

State of Emerging Technologies

The Role of Marketing in Creating a Services-led business model

Empirical survey of 305 solution providers

Empirical survey of 279 solution providers

Vendor channel investment trends; Survey of 100 vendors

The channel community’s trusted authority for growth

and innovation for more than three decades.

Enabling Technology Partnerships

Solution Provider Census Research Summary


Channel Census

Objectives

Broad overview of the demographics of the N. American solution provider community

Analysis of emergingsolution provider business models

Key insights into growth strategies, barriers and support expectations of each major partner type

Critical benchmark against which to measure channel breadth and profile

Methodology

Leverage most current Channel Company solution provider database and the CRN Channel Intelligence Council

On-line survey in Jan 2014 with research incentive

730 completed responses


Four Main Topics

BUSINESS

MODELS

TECHNOLOGY

INVESTMENTS

VENDOR

RELATIONSHIPS

GROWTH

STRATEGIES


Vendor Key Imperatives

Complete MSP Model Program Tracks

Know Your Vintage Partners

Create & Share Services Delivery IP & Enablement

Make a bet on Leading Service Providers

Invest in Next-Gen Selling Skills

Fuel the Engine, to Drive Growth



» Managed Services capabilities now broad & demands mainstream support; 25% of partners

» MSP is a service line and a function; not most often a unique business model

» Requires unique ROI and alignment with vendor’s Service Provider, direct & indirect GTM plan

» Identify your dependency on top Vintage partners

» Determine their plans for moving towards Progressive capabilities

» Target legacy infrastructure partners for addition of converged infrastructure & private cloud capabilities

Complete MSP Model Program Tracks

Know Your Vintage Partners


The N. American Solution Provider Universe

Based on selection of primary business model

Q: Which of the following best describes your current primary business model? (that which contributed the highest % of your revenues?)

» Honed 170,000 list

» “VAR/reseller” label on slow and steady decline as primary business model; shift to Cloud Reseller, MSP and Consultant

» MSP segment continues to grow; revenues <20% of total on average

» Consultant and System Integrator legacy business models sustain, driven by demand for converged infrastructure and private cloud adoption

» Dramatic increase in partner awareness & adoption of cloud business models; 78% of this community identifies with one or more cloud models

VAR33%

Consultant28%

SI12%

MSP/Hoster12%

Cust. Syst. Bldr.4%

DMR2%

Svs. Prov. Agent

4% ISV3%

Web Dev2%

BUSINESS

MODELS


33%

28%

12%

12%

4%

4%

3%

2%

2%

22%

24%

18%

13%

6%

6%

3%

3%

5%

VAR

Consultant

SI

MSP/Hoster

Custom Systems Builder

Service Provider Agent

ISV

DMR

Web Developer

Primary

Secondary

Q: Which of the following best describes your current primary business model? (that which contributed the highest % of your revenues?)Q: Which of the following best describes your current secondary business model? (that which generated the second highest percentage of your revenue?)

Primary & Secondary Partner Business Models:

MSPs now represent 25% of market; VAR role still critical to SMB markets and Consultants and SI’s driving migration to cloud

» Secondary business model relates to area for greatest future investment

» VAR role still critical in SMB markets

» SI and Consultant roles reflect rise in professional services revenue and integration work around private cloud & converged infrastructure

» 25% of solution providers now have MSP capabilities; % of revenue small but growing

» Commercial ISV business model moving to SaaS and mobile app. development; morphing with other business models as “products” become “services”

“We need to become mini business analysts, so my organization is not just seen as the tech geeks.”

MSP – Las Vegas, NV


Rise of MSP Business Model and Cloud Reseller/Agent drive growth in Transformative model

Q. How would you characterize your company's business culture today?

Vintage:

relationship with IT contacts

resale of on-premise

very limited recurring revenue

project based

mostly SMB end-users

high volume, lower prices

“lifestyle” business

Transformative:

relationships with LOB and IT

specialize in key vertical markets

significant % of overall revenues come from recurring revenue

offers a variety of cloud services or applications

understand and addresses business process

active in P2P collaboration

does some custom software development

Vintage Progressive Transformative

2014

Progressive: relationships with both LOB and IT

actively expanding # of end-users

some recurring revenues

adopted cloud services/MSP practice

pre-packaged services

relationships with service providers

sell or develop applications or extensions

Vintage Progressive Transformative

2013


Q: Which cloud business model(s) does your organization expect to utilize? (choose top 2)

VAR 1st 2nd

CONSULTANT 2nd 1st

SI 2nd (tie) 2nd (tie) 1st 2nd (tie)

MSP 2nd (tie) 2nd (tie) 1st 2nd (tie)

Cloud Partner Business Models

Cloud Solution Provider business models are adjacent to existing business models and core competencies

Leg

acy

Pa

rtn

er B

usi

nes

s M

od

els

» Business models transition aligns with historic functional focus and assets

» Cloud Agent/Reseller most popular new business model

» SI model splinters into widest variety of new models; supports blending of application, infrastructure and consulting capabilities in next-gen partners


Cloud Agent and Reseller programs now mainstay; Consultant role draws on Professional Services focus and private cloud pilots

PRIMARY ROLE:Build & manage

infrastructure for providing hybrid &

public cloud environments

Now 78% of solution providers clearly identify themselves with

one or more Cloud Solution Provider business models

Q: Which cloud business model(s) does your organization expect to utilize ? (choose top 2)

PRIMARY ROLE:Design & architecture of

cloud solutions for business outcomes

PRIMARY ROLE:Influence customers to adopt cloud solutions and sell (only) third-party cloud offerings

http://www.iland.com/

http://www.iland.com/

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=OtP9Sz3ptuVNlM&tbnid=AZLXyUrbCqiXKM:&ved=0CAUQjRw&url=http://www.appian.com/blog/cloud-bpm/appian-delivers-cloud-benefits-to-amazon-web-services&ei=99VBUvqgCOOUiALumYDoBQ&bvm=bv.53077864,d.cGE&psig=AFQjCNE3Vh14rE-MfiLHnQZc7cR8e-q4ZQ&ust=1380132719569647

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=OtP9Sz3ptuVNlM&tbnid=AZLXyUrbCqiXKM:&ved=0CAUQjRw&url=http://www.appian.com/blog/cloud-bpm/appian-delivers-cloud-benefits-to-amazon-web-services&ei=99VBUvqgCOOUiALumYDoBQ&bvm=bv.53077864,d.cGE&psig=AFQjCNE3Vh14rE-MfiLHnQZc7cR8e-q4ZQ&ust=1380132719569647

http://www.cloudsherpas.com/


http://appirio.com/

http://appirio.com/

http://www.agosto.com/

http://www.agosto.com/


Cloud Builder role evolving from legacy SI and VAR roles; Expect to see Broker role increase to manage multiple services

PRIMARY ROLE:Aggregate various

cloud solutions with integrated management

services

PRIMARY ROLE:Build SaaS applications

for public, private or hybrid cloud solutions

Q: Which cloud business model(s) does your organization expect to utilize? (choose top 2)

In , the Cloud Broker role was deemed “critical” by 27% of end-users; 52% were undecided

and only 21% said it was “not important.”

PRIMARY ROLE:Integrate & deploy technology to build

private or hybrid cloud data centers

PRIMARY ROLE:Aggregates cloud

services and delivers training and

management services to business partners



https://www.concur.com/

https://www.concur.com/

http://www.wtisystems.com/

http://www.wtisystems.com/

http://www.presidio.com/

http://www.presidio.com/

http://www.ingrammicro.com/

http://www.ingrammicro.com/


Biggest investment in MSP/hosting; Little divesting planned as partners hedge their bets for new revenues

Q: Which business model or practice area has your company most recently adopted or invested in (last 12-18 months)?Q. Which business model or practice area has your company most recently divested in, sold off or simple discontinued last 12-18 months)?

19%

18%

17%

15%

11%

MSP/hoster

Consultant

Reseller

None

Systemsintegrator

49%

11%

8%

6%

6%

None

Consultant

Reseller

Custom systems builder

Web developerinvesting

divesting

Supports growth in

Cloud Reseller/

Agent role

Consultant role evolving into cloud services & converged infrastructure architectures

Investing Divesting


The MSP Continuum

MSP Pioneer 250

Business model heavily weighted toward managed

services, focused on the SMB market.

MSP Elite 150MSP Hosting

Service Provider 100

Companies who are large, datacenter-focused solution providers

with a strong mix of on-premise professional services and off-premise

services that provide a recurring revenue stream.

Companies who own and operate their own

datacenters, proving a wide array of subscription-based

services.

92% of the SP500 list offered managed services

89% offered cloud services

Application hosting, Back-up & Disaster Recovery, Data Protection, Help Desk, IaaS, Managed Print, Managed Security, Managed Storage, Managed VoIP, Mobile Device Management,

Network Operations Center, Remote Monitoring, Virtual Desktop,


Consolidation of <$1m partners continues; 45% of large partners active with M&A with 1/3 absorbing an acquisition from

Q: Did your company have any corporate merger or acquisition activity in the past 12 months? (buying, selling or merging with another commercial business) (choose all that apply)

94%

4% 1% 0% 0%

83%

12%3% 1% 1%

79%

7% 10% 7%0%

78%

12% 9%

0% 0%

55%

9%

32%

5%0%

No M&A activity No - but we are formallypartnering

We acquired anothercompany

We merged with anothercompany

We were acquired

<$500k $1 - 4.9M $20 - 49.9M $50 - 99.9m $500m+

» Consolidation still steadily underway across the channel; driven by financial pressures and larger solution provider acquisitions

» Formal partnering is still nascent for all sizes

» Acquisitions distract execution, stalls financial investment; demands marketing & branding support

Had no M&A activity BUT

of largest (>$500m) acquired another

company in


Professional Services & Managed/Cloud Services continue to grow as % of revenue; largest SPs still most dependent on Hardware revenues

Q. What were your company’s total revenues?Q. What was your mix of revenue in between hardware product resale, software resale or original sale (your own applications), professional services (either pre-sale or post-sale) and managed services/cloud service?

30%22%

34%

14%

26%20%

40%

14%

Hardware Software ProfessionalServices

Managed or cloudservices

2013

2014

» Professional services growth driven by cloud and converged infrastructure architectures

» Managed Services now more than ½ of traditional hardware sales

» Largest solution providers still most dependent on hardware revenues

<$500k

$500k - 999.9k

$1M - $4.9M

$5M - $9.9M

$10M - $19.9M

$20M - $49.9M

$50M - $99.9M

$100 - $499.9M

$500M +

20%

28%

23%

25%

33%

30%

33%

41%

26%

16%

23%

19%

18%

18%

23%

21%

25%

31%

53%

34%

38%

41%

36%

30%

30%

24%

28%

11%

15%

19%

16%

13%

17%

16%

10%

16% Hardware

Software

Prof. Serv.

Managed or cloudservices

Revenue Mix (Aggregate)

Revenue Mix (Annual Revenues)


Create & Share Services Delivery IP & Enablement


» Profile and segment service delivery- capable partners

» Build and share prof. service & managed service IP (SOWs, pricing, methodologies) with target partners to collapse time to capability

TECHNOLOGY

INVESTMENTS

VENDOR

RELATIONSHIPS

» Choose Service Provider winners, negotiate internal support for their role in the field sales GTM model

» Invest in Alliance relationships to support their partner programs

Make a bet on Leading Service Providers


Strategic vendor relationships narrowing as leading vendors demand loyalty and investment; cloud solution providers more leveraged on strategic lines

Q: For each of the following categories of IT vendor relationship types, with how many vendors are you currently engaged and what percent did each type represent of your total revenues in ?

DEFINITION# OF VENDOR

LINES (MEDIAN)% OF REVENUES

STRATEGIC

Generating a significant amount of revenue, highly involved with them at the sales, marketing and technical levels

3 49%

TACTICAL

Generate a significant amount of revenue with these vendors; product alternatives exist and we are not strategically invested in these lines

3 27%

OPPORTUNISTICInfrequent and small purchases, reactive based on our customers’ demands 5 24%

55%

20%

(both 4 in)

VENDOR

RELATIONSHIPS


All business models have formal Consulting and Managed Services practices; Consultants have least focus on hardware resell/integration

VAR Consultant SI MSP

Hardware resell/integration

58% 22% 56% 53%

IT Consulting Services

51% 73% 59% 68%

Managed Services 40% 25% 37% 82%

Cloud Services(SaaS, IaaS, PaaS)

34% 31% 27% 59%

Network Design & Management

43% 28% 48% 56%

Infrastructure design & implementation

38% 20% 41% 51%

Security Services 25% 27% 31% 44%

» Hardware resell & integration services still fundamental for most business models

» Managed services well established; Cloud Services still emerging, driven by MSPs

» Traditional infrastructure skills not broadly translating to IaaS offerings

» Least formal offerings:

- ERP/CRM applications (9%)- Big data (13%)- Internet & voice solutions (14%)

Q: For which of these core business activities or solution/service areas did you have a formal offering during ? (must represent 10% or more of your revenues)

Top Solution & Services Areas -TECHNOLOGY

INVESTMENTS


Branded systems, storage & security remain top priority for Legacy & Emerging business models; focus on software infrastructure & applications lagging

Q: In which of these product or solution categories is your company planning to strategically invest? (“strategic investment” is defined as hiring specialized staff, bringing on new product lines, getting additional vendor certifications or conducting focused, outbound branding or demand-generation marketing campaigns):

38%

32%

30%

29%

28%

27%

23%

21%

21%

20%

19%

17%

Branded systems and servers

Storage

Security SW and/or appliances

Computing devices

Infrastructure as a Service

Software applications

Software infrastructure

Custom systems

Voice and data networking

Unified communications/VOIP

Hardware

Platform as a Service

VAR SI Consultant MSP

Branded systems &

servers

Branded systems &

servers

Software apps.

IaaS

Storage Security SecurityBranded

systems & servers

Security Software apps.Branded

systems & servers

Security

Cloud Reseller /Agent

CloudBuilder

CloudConsultant

Cloud Service Provider

Cloud Broker

Cloud App. Provider

Branded systems & servers Software

applications

IaaS IaaS Security IaaS SecuritySoftware

infrastructure

Storage Storage Storage Storage IaaS IaaS

Strategic Investments(Aggregate)

By Cloud Business Model

By Legacy Business Model


Rank VAR Consultant SI MSP / Hoster

Critical Vendor Relationships

Critical vendors reflect focus on building or selling infrastructure, with broadening of virtualization skills; converged infrastructure key priority

Based on top 10 mentions in general, then ratings of “critical”

Q: Please rate the relative importance to your business of these product lines for 2014 (rating scale: 1 – critical, 2 - moderately important, 3 - neutral, 4 - moderately unimportant, 5 - not relevant or unimportant)

Higher focus on storage solutions and custom systems; converged infrastructure vBlock and FlexPod offerings highlighted

Traditional infrastructure focus; paves way for IaaS migration

Virtualization and system vendors vie to be top lines for MSPs:

1) building their own physical or virtualized infrastructure, or

2) setting brand preference for their clients’ on-site or off-site managed infrastructure

VENDOR

RELATIONSHIPS

2014

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&docid=7ua21IzmRu6TOM&tbnid=gvcQt2OUYBOQxM:&ved=0CAUQjRw&url=http://www.logoeps.net/emc-corporation-logo-eps-pdf-files.html&ei=Xl8PU9_JDsKe0QGUvoGgBQ&bvm=bv.61965928,d.dmQ&psig=AFQjCNGYJHLvGEhY6afrbpPQ4SOqTXjIug&ust=1393602776549947


http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=FcpUhfluVZzsvM&tbnid=NdvGTwnwvrtF3M&ved=0CAgQjRw&url=http://www.rit.edu/news/story.php?id=49779&ei=WmEPU8_iFYr50wH-m4GwBg&psig=AFQjCNHr9lMYWGg9QrD6fsL3XBB1O4E_2Q&ust=1393603290404618







Software development platforms and virtualization dominate critical rankings in 2016; Google makes top 5 and Cisco elevated

Q: Please rate the relative importance to your business of these product lines for 2016 (rating scale: 1 – critical, 2 - moderately important, 3 - neutral, 4 - moderately unimportant, 5 - not relevant or unimportant)

Year Over Year Changes:

• Virtualization and software development platform dominance; software - defined “everything”

• Amazon up 8% year-over-year; Google makes top 5 list

• Cisco’s “internet of everything” attracts managed services/cloud business models

• SI’s still focus heavily on converged infrastructure

Rank VAR Consultant Syst. Integrator MSP/ Hoster

Microsoft Microsoft

= new to top 5 list from 2014

Critical Vendor Relationships Based on top 10 mentions in general, then ratings of “critical” 2016

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=images&cd=&cad=rja&ved=0CAQQjRw&url=http://blogoscoped.com/forum/123419.html&ei=zTIOU5KbGsa7oQS-ooD4BA&usg=AFQjCNHv5Bfk2-pOmn9m9OviiMmH9cq_lQ&bvm=bv.61965928,d.cGU

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=images&cd=&cad=rja&ved=0CAQQjRw&url=http://blogoscoped.com/forum/123419.html&ei=zTIOU5KbGsa7oQS-ooD4BA&usg=AFQjCNHv5Bfk2-pOmn9m9OviiMmH9cq_lQ&bvm=bv.61965928,d.cGU












Invest in Next-Gen Selling Skills


» IT as a service involves new buyers, new buying behaviors, new cost justification models; ultimately new sales models

» Update sales curriculum, if co-selling with direct sales with corporate sales methodology, update and train partners as appropriate

GROWTH

STRATEGIES

Fuel the Engine, to Drive Growth

Remove barriers to partner evolution:

» Build end-user demand for certified tech skills

» Tie MDF to specific re-partner branding and demand gen activities for managed/cloud services

» Capital for financing and selected investment in partners building new practices


• Enhanced sales methodology broad imperative across all partner types:

- Services vs. products- Annuity vs. project- Appeal to LOB and IT- Financially and outcome-measured- Demanding customer breadth vs. depth

• Branding and visibility #2 initiative

• Not significant amount of new hiring; retraining success is critical

• Market/vertical expansion not top priority; dependency on organic growth

Q: What are your top plans as it relates to the growth of your top-line sales? (choose top 2)

Enhance our sales methodology or approach

Increase our investment in company branding and market visibility

Enter a new market (customer) segment or vertical industry

Increase our sales staff (hiring)

Partner with a complimentary business to create and market a set of combined capabilities

Top-Line Growth Strategies

Plans for top-line growth diversified; enhanced sales methodology is top priority across all business models


Enhanced sales methodology key to revenue growth with old and new business models; cloud models prioritize marketing & branding higher to drive revenues

Q: What are your top plans for 2014 as it relates to the growth of your top-line sales? (choose top 2)

Top-Line Sales Growth Initiatives (by Cloud Business

Models):

Top-Line Sales Growth Initiatives (Legacy Business

Models):

Rank VAR S.I. Consultant MSP

Enhance our sales methodology





Enter a new customer segment or vertical

market

Partner with a complementary

business


Increase our attach rate of services to

products

Partner with a complementary

business

Enter a new customer segment or vertical

market

Expand into a broader

geographic coverage

RankCloud

Reseller/AgentCloud

BuilderCloud

ConsultantCloud

Service Prov.CloudBroker

Cloud App. Provider

Enhance salesmethodology

Enhance sales

methodology

Enhance sales methodology


Increasebranding & marketing


Increase branding & marketing

Increasebranding & marketing

Partner with another

company

Increase our sales staff

(hiring)


company

Enter a new market

Increase our sales staff

(hiring)

Enter a new customer

market

Enter a new market


company

Enhance our sales

methodology

Expand geographic coverage


41%

38%

30%

20%

20%

More effective maintain and upgrade thetechnical competency of our existing staff

Enhance our service delivery methodology

Obtain technical certifications in one ormore technology vendors' products

Cement a relationship with a newtechnology vendor

Begin a new practice area, focused on anew vendor brand or solution type

Technical and service skills require enhanced methodologies and refreshed technical talent vs. new products or certifications

Q: What are your top plans for 2014 as it relates to the growth of your technical or services-delivery expertise? (choose top 2)

Vendor dependencies of new products or technical certifications

rank below methodologies and skills maintenance

Can be impacted by vendor support: (work scoping, rate structures, reference architectures)

Not always measured by new certifications (new hiring, refresh training, methodologies)

Technical & Service Delivery Initiatives


Maintain & upgrade technical skills and service delivery methodologies critical to old and new business models; technical expertise measurement will not be new certifications alone

RankCloud

Reseller/AgentCloud

BuilderCloud

ConsultantCloud


Cloud App. Provider

Maintain & upgrade staff tech skillsEnhance our

service delivery methodology

Maintain & upgrade staff

tech skills

Enhance our service delivery

methodology

Obtain 1 or more vendor tech.

certs

Enhance our service delivery methodology


tech skills

Enhance our service delivery

methodology


tech skills

Enhance service delivery

methodology

New practice; new vendor or

solutionObtain 1 or more vendor tech. certs


Maintain & upgrade staff tech skills

Enhance service delivery methodology



Obtain 1 or more vendor tech. certs




Enhance servicedelivery methodology

New practice;new vendor or solution

Obtain 1 or more vendor tech. certs


Q: What are you top plans for 2014 as it relates to the growth of your technical or services-delivery expertise? (Choose top 2)


Plans for profitability growth focused on increase in recurring revenue services and better staff utilization

Q: What are your top plans for as it relates to the growth of your profitability? (choose top 2)

49%

37%

22%

17%

16%

16%

11%

10%

Increase overall percentage of (moreprofitable) recurring revenue services

Get better utilization out of our existingtechnical and services staff

Increase our attach rate of services to products

Charge more for our solutions and services

Maximize vendor rebates and incentives

Dropping under-performing vendor lines orpractice areas

Reduce overall SG&A expense ratios (opexefficiency)

Get better access to capital or financing

Not Higher??Points to remaining dependency on

branded systems and storage

Ties to enhancing sales methodology and services-delivery methodology

Cost management and access to capital isn’t a high priority

Pricing or vendor incentives don’t seem to be the priority; cloud and managed services growth changes front- and back-end pricing model dynamics completely

$$$

Partner Profitability Growth Initiatives

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=images&cd=&cad=rja&ved=0CAQQjRw&url=http://www.softicons.com/free-icons/system-icons/crystal-project-icons-by-everaldo-coelho/actions-attach-icon&ei=DXb-UsCKCMeEoQS04YHgCw&usg=AFQjCNEYC4ZjQiK-yfV8bYZaHmwcpLMamg&bvm=bv.61535280,d.cGU



Common profitability plans in old and new business models; increasing % of recurring revenues and better sales/technical staff utilization

Rank VAR SI Consultant MSP

Increase % of recurring revenue

Better sales & tech staff utilization

Increase our attach- rate of services / products

Charge more for our solutions and services

RankCloud

Reseller/AgentCloud

BuilderCloud

ConsultantCloud


Cloud App. Provider

Increase % of recurring revenue

Better sales & tech staff utilization

Increase our attach rate of services to productsMaximize

vendor rebates& incentives

Charge more for our

solutions

Q: What are your top plans as it relates to the growth of your profitability? (choose top 2)

Profitability Growth Plans - By Legacy Business Model

Profitability Growth Plans - By Cloud Business Model






Biggest obstacles focus on customer buying cycle and competition from diverse competitors; access to technical talent less of a concern

Q: Which three represent the biggest obstacles your firm will face in achieving your top business goals (choose top 3)

47%

38%

32%

29%

21%

20%

19%

Longer sales cycle/delayed customerbudgets

Competition from traditional peers

Competition from new market entrants(esp those focused on IT as a service

offerings)

Competition from vendors' direct salesteams

Access to qualified technical talent

Lack of capital for investment

Access to qualified sales talent

Longer sales cycles & delayed budgets reflective of transition to managed services & cloud; now over 50% of IT investments

Non-traditional business models pose new local and national competition; traditional “Vintage” VARs most at risk

Access to technical talent big historic issue; reflects re-focus on new practice development and sales methodologies

Business Obstacles


Combination of delayed customer budgets & longer sales cycles plus competition from all sides makes investment in new business models very challenging

Q: Which three represent the biggest obstacles your firm will face in achieving your top business goals ? (choose top 3)

RankCloud

Reseller/AgentCloud

BuilderCloud

ConsultantCloud


Cloud App. Provider

Customer longer sales cycles/reduced budgets

Competitionfrom traditional

peers

Competition from new

market entrants

Competitionfrom traditional

peers

Competition from new market

entrants

Competitionfrom

traditional peers


market entrants

Competition from vendors’

direct sales force


direct sales force


market entrants

Competition from vendors’ direct

sales force


direct sales force

Competition from traditional

peers


Customer longer sales cycles/reduced budgets

Competition from traditional peersCompetition from new marketentrants (esp. XaaS companies)

Competition from vendors’ direct sales Competition from new

market entrants (esp. XaaS companies)

Access to qualifiedtechnical talent

Obstacles - By Legacy Business Model

Obstacles - By Cloud Business Model




In a Cloud and Managed Services Market


This Research - In Context

Channel Census (2014)

• Business models

• Cloud adoption

• Services orientation

• Growth plans

• Overall challenges

Sales Model Transformation (2014)

• Staffing

• Compensation

• LOB vs. IT contacts

• Selling Methodologies

Marketing Transformation (2015)

• Spending

• Demand Generation

• Repositioning & branding

• Staffing

• Use of digital marketing & social media

Emerging Technology

→ End-user and Partners

→ Rates of tech adoption

→ Key practice investments

→ How cloud & MSP skills are helping

Emerging Technology


Emerging Technology Segments - Defined

Custom application development for cloud/SaaS and/or mobile deployment; can be either new or retrofit of legacy applications

Remote data access and security monitoring services for mobile devices, using corporately defined policies

Collecting, organizing and analyzing large sets of unstructured data to discover patterns and other useful business information

Managing network services through decoupling the network control and forwarding functions; network becomes directly programmable and the infrastructure abstracted

A vision for IT infrastructure that extends virtualizationconcepts such as abstraction, pooling, and automation to all of the data center’s resources and achieve ”IT as a service”

The policies adopted to prevent and monitorauthorized access (or denial) and identity on a corporate network; includes identity and access management and authentication

Delivery of voice communications and multimedia sessions via Internet Protocol (IP) and delivered as a cloud service with supporting management and reporting

A network of physical objects embedded with electronics, software, sensors and connectivity to enable them to exchange data with the manufacturer, operator and/or other connected devices


Emerging Technology Segments - Defined

Grouping multiple information technology (IT) components into a single, optimized computing package. May include servers, data storage devices, networking equipment and software for IT infrastructure management, automation and orchestration. From either a single vendor or multiple vendors.

Examples: VCE Vblock or Cisco and NetApp’s Flexpod

Integrated infrastructure delivered in a pre-configured appliance from one vendor. The server, storage, networking and software are software defined and all integrated such that the components cannot be broken out and used separately.

Examples: SimpliVity OmniCube or Nutanix Extreme Computing Platform HP ConvergedSystem 250-HC StoreVirtual CS250


Respondent Profiles

• $10.5m annual revenues (median) - $222M (mean)

• 570 employees (mean 4,478)

• 73% based in US with all also offices in US

• Key industries:

– Financial services

– Healthcare

– Manufacturing

– Non-profit

• Primary business models - VAR, Consultant, SI (top 3)

• Secondary business models - Consultant, SI, VAR, MSP – (top 4)

• Median annual revenue = $3m (mean = $242m)

• Revenue mix:

• 54% of revenues sold to companies with <$5m in annual revenues; 24% to companies with >$100m

• Cloud Solution Provider Models:• Consultant – 51%

• Cloud Service Provider – 38%

• Cloud Agent or Reseller – 34%

• Cloud Application Provider – 21%

• Cloud Builder – 19%

End-Users

N=244

Solution Providers

N=442

HW27%

SW20%

Project Svs.27%

Managed Svs.18%

Cloud Svs.8%


Shift in Revenue Categorization – New Research Methodology

Public Cloud

Private Cloud

Off-site ManagedService

On-site ManagedService

Customer-owned/onpremise

9%

13%

15%

31%

32%

Cloud Services (incl. SaaS & IaaS)

Managed (annuity) Services

Project-based Services

Software (on prem)

Hardware (on prem)

• More holistic view of product + services revenues

• Shows transition from on-prem. to cloud delivery models for both infrastructure & apps.

• Combines 2 types of managed services INTO ONE

CATEGORY

• Combines all cloud delivery models into one category (resale, agent, builder) and all types of cloud deployment (private, public, hybrid)

** Private Cloud budgets are grouped within “Cloud Services”.

Q: What percentage of your organization’s 2014 and anticipated 2016 budget was or will be spent on the following types of products or services?

**

Revenue Categorization – Prior to 2014

End-User’s 2014 Budget Allocation - New Categorization


Overall TrendsAccelerating shift to a software and services based Solution Provider role

→ End-users actively engagingMSP and Cloud Providers

→ Expecting SPs to playactive role in architecture and

pre-sales planning for new software and service-based

technologies

→ See Cloud and Managed Services fundamental to their success with emerging technologies

→ Represents radical change in software and services capabilities; average SP not yet prepared

→ Need to help solution providers accelerate Cloud,

Software and Services-delivery investments and

capabilities

→ P2P Collaboration initiatives critical to health of

ecosystem


Partners required to have a steep set of skills to take full advantage of emerging software and services-based technologies

CLOUD AND

MANAGED

SERVICE

SKILLS

PROVISIONING REPORTING

& ANALYTICS

CAPACITY & CONSUMPTION

MONITORING

L1/L2 HELP

DESK

CONTRACT

MGMT./SLA

DISASTER

RECOVERY/BU

VDIAND/OR

MDM

PROJECT-BASED

SERVICE

CAPABILITIES

PRE-SALES

DISCOVERY & ASSESSMENT

DATA

MIGRATION

APPLICATION

INTEGRATION

TUNING &TESTING

TRAININGAPPLICATION

CUSTOMIZATION

WORKLOAD

ASSESSMENTS

PROJECT & LABOR MANAGEMENT SKILLS

TECHNICAL

SKILLS

MULTI-VM VIRTUALIZATION

(SERVER, STORAGE, NETWORKING)

NETWORK

ARCHITECTURES

(E.G.SWITCHING)

STORAGE

ARCHITECTURES

NETWORK

SECURITYOPENSTACK

IT STRATEGY & ARCHITECTURE

BUDGETING STAFFINGOUTSOURCING

STRATEGY

MOBILITY

STRATEGY

APPLICATION

MODERNIZATION

SERVICE

DELIVERY POLICIES

CHANGE

MGMT.





Key Takeaways

1. Services now 40% of end-user budgets; Continued rise of cloud services as % of budget

2. Significant changes in customer buying process continues; CFO, COO decision makers now extremely influential

3. End-users reach out to Cloud Solution Providers and MSPs to guide their IT strategy and architecture

4. Private cloud deployments still high; act as foundation to future services-based technologies

1. High degree of investigation of all core emerging technologies; limited deployment of software-defined technologies

2. Highest deployment of network security and mobility applications/device management

3. Brand biases behind IaaS and SaaS infrastructure components less important to end-users than partners

4. Solution providers investing furthest ahead of customer demand on SDN


Continued end-user IT budget shift toward cloud services; nearly 40% of budgets now devoted to services

Hardware32%

Software31%

Project Services

15%

Managed Services

13%

Cloud Services 9%

Hardware31%

Software30%

Project Services

13%

Managed Services

13%

Cloud Services 13%

Q: What percent of your organization's 2014 and anticipated 2016 IT budget was or will be spent on the following types of products or services? (N – 244; Mean)

IT Spending IT Spending


End-users reach out to MSPs and Cloud Integrators increasingly to guide their IT strategy and architecture

0%

5%

10%

15%

20%

25%

30%

35%

2014 2016

• MSPs and Cloud Integrators’ projected influence increasing; approaching influence of traditional IT Consultant

• Hardware vendor direct influence down

• Software vendors more influential than hardware vendors; aligns to virtualized infrastructure and cloud applications

Q: What type of IT vendor or solution provider had the greatest influence in your organization's overall IT

strategy and architecture in 2014, and who do you project to have the greatest influence in 2016?

0%

20%

40%

60%

HW vendor SW vendor


Partners perceive much higher rates of decision making change than end-users; budgets shift to MSP and cloud providers and new decision makers continue to be involved

15%

10%

8%

18%

18%

21%

56%

12%

15%

15%

19%

27%

29%

29%

29%

Changes to procurement process

Shorter vendor evals

Longer vendor evals

Greater control by LOB to eval and spend

New vendor /SP eval process

New people in buying process

Budget shift to MSP and cloud vendors

No material changes

2015 2013

• Significant rate of change across the board in last 2 years

• Still significant difference in partner vs. end-user perceptions of change

• Continued, steady budget shift to MSP and cloud vendors

• Nearly 20% said LOB has greater autonomy to control & spend IT $$ - ties to rise in services revenue mix

Not in data

Q: Whattypesofchanges,ifany,hasyourcompanymadeinhowyoumakeITacquisition decisions now that ITcapabilities are available fromSoftware as a Service (SaaS)and Infrastructure as a Service (IaaS) providers?

34%

21%

40%

22%

Partner Perspective


Non-IT Line of Business decision makers now drive up to 40% of IT solutions & expenditures

0% 10% 20% 30% 40% 50%

1-10%

11-20%

21-40%

41-60%

61 - 75%

76%+

Respondents

% I

T p

rod

uct

s a

nd

ser

vice

s so

luti

on

s ch

oic

es a

nd

exp

end

itu

res

2016 2015

Q: What % of your IT products and services solutions choices and expenditures will be decided by Line of Business Managers or other executives outside of the CIO/IT Manager's reporting line in 2015? In 2016

Up to 40%of IT solutions and expenditures will be decided

by Line of Business Managers in 2016(84% of end-user respondents)

“Business users are now more comfortable with the cloud and are raising the issue

with their IT groups. We seecollaboration applications most often

driving this internal collision.”

CEO, $6m Built on the Cloud provider


Solution providers selling all services more frequently to COO & CFO; CIO and IT Directors still primarily driving cloud decisions

0% 10% 20% 30% 40% 50% 60%

CIO

IT Dir (general)

IT Dir Networks/Security

IT Dir Applications

CSO/CISO

CFO

CMO

COO or VP Operations

Software Hardware

0% 10% 20% 30% 40% 50%

Cloud Services Managed Services Proj. Services

• Selling all services more frequently to the CIO (vs. products)

• CFO involved more often with all services, especially cloud

• COO or VP Ops. involved more often with all services

• CIO and IT Directors more involved with cloud decisions than with managed or project-based services

Q: Which of these customer roles are your most typical point of contact when selling each type of product or services offering?


End-user emerging technology adoption aligns with partner practice investment; focus on network security and mobile applications

45%

36%

34%

40%

27%

44%

7%

7%

10%

31%

16%

37%

SDN

SDDC

Internet of Things (M2M)

Mobile Apps

Cloud based VOIP

Network security

Deploying Investigating

Q: Which of these emerging technologies do you anticipate either investigating or deploying in 2016? (N – 244)

• End-users investigating all technologies, with limited exposure to SDN and SDDC at this time

• Most mature technologies carry greatest rate of adoption for customers andsolution providers

• Customer demand aligns with partner practice investment

“We’re waiting out the hype on SDDC. The disruptors there today don’t have enough market credibility, especially with my enterprise customers.”$65m SI and FlexPod partner

38%

24%

28% (Mobile Apps. Development)31% (MDM)

17%

18%

23%

Partner Perspective


Last

12

Mo

nth

s

Private cloud implementation still high; end-users still think brands are important to infrastructure – using standard branded components

Q: Have you implemented a private cloud in the last 12 months?

Q: How would you describe the private cloud you implemented?

58%24%

18%

Standard branded servers, storage andsoftware tools from leading IT vendors

Vendor pre-integrated stack of servers,storage and SW tools built for private-cloudimplementations

Vendor appliance specifically for Private Cloud

51% implemented a private cloud in last 12 months

>50% implemented private cloud with branded components

“Private cloud implementation may not lay a foundation for SDDC and SDN, since a private cloud only has to offer traditional provisioning and management. SDDC is supposed to create the data center that can encompass all -- private, public, and hybrid clouds.”VCE Solution Provider

No, 45%Yes,

51%

DK 4%


15%

11%

29%

22%

49%

48%

7%

19%

END USER

PARTNER

Not Important At All

Neither Important nor Unimportant

Important

Extremely Important

End-users and partners both place high value on brands powering IaaS & SaaS solutions; cost constraints will encourage move to converged and hyper converged infrastructure

• 44% of end-users thought brands were not important or were neutral – applies to publicIaaS and SaaS solutions

• Partners place higher value on hardware and software brands for IaaS and SaaS solutions than their customers – 3x higher rating of “extremely important”

• SP perceptions likely apply more to their private cloud deployment trend, where brands are visible and/or on premise

Q: When making purchase decisions for Infrastructure (IaaS) or Software as a Service (SaaS), howimportant is it to your company which hardware and software brands are used to power these services?

“Piece parts or best-of-breed is still the best strategy for us. But best-of-breed can be very expensive. Great quality, but there’s constant price pressure from customers.”Regional VAR/MSP in So. Cal


Our Managed Services offering builds trust with our clients. Since we’re looking

at their IT operations every day and solving problems together they’re a lot more inclined to listen to us when we bring a new technology to invest in.”

President and COO, $40m MSP and Microsoft/Cisco VAR





Key Takeaways

• Solution providers believe their cloud and managed services skills are important to their success with emerging technologies

• Solution providers still in build-mode with their professional services to support their cloud practices; will lay foundation for services success with emerging technologies

• Infrastructure components for private and hybrid cloud moving toward converged; reluctant to invest in hyper-converged; prepares customers for consideration of software-defined architectures


Building recurring revenue streams is themost important issue for us in terms of our future investment in ANY technology area.

We are a very labor-intensive business today, and we need to transition this quickly.”

President and COO, $220m SI, VAR and Cloud Integrator


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Very or moderately important Neutral or Not Important

Solution providers see cloud and managed services capabilities fundamental to their success with emerging technologies

Q: How important will your cloud and/or managed services capabilities be to the success of these technologies practice(s) in the next 12 months to you and your company?

“To provide the ongoing analytics and trending to all the stores based on historical data, it would take longer than a month if it wasn’t delivered in the cloud. It would be a nightmare!”

$65M Big Data solution provider serving the textile manufacturing market


36%

55%

46%

29%

40%

34%

Designed

Sold

Implemented

39%

54%

51%

29%

35%

35%

44%

64%

53%

39%

49%

49%

Solution providers still in build mode on cloud project and professional services to support the growth of their cloud practices

Public Hybrid

2014

2012

2014

2012

2014

2012

Private

2014

2012

2014

2012

2014

2012

2014

2012

2014

2012

2014

2012

Still highest rates of pre- and post-sale services activity overall

Huge jump in selling and implementing hybrid solutions

Q: Which types of cloud consumption models did you design, sell, or implement with your customers in 2014?

Primary focus with public is resale/agent role


46%36%

18%16%4%

Standard branded servers,storage and software

Vendor pre-integrated stack ofservers, storage and software

(converged)

Vendor appliance(hyper-converged)

Although partners still care about brands for private cloud infrastructure, the use of converged and hyper-converged infrastructure has increasingly from last year

Q. How would you describe the primary method you used to implement private cloud solutions this past year?

79%

Shift away from build-your-own IaaS/private cloud with branded components

converged and hyper-converged infrastructure deployment still minority, but growing quickly

“Nutanix is a vendor that is so far ahead of its time. VCE is more mature. Nutanix has challenges. Some customers don't understand it. It can be difficult to sell. It can be challenging.” Owner & President, Strategic Storage Solutions (TX solution provider & Nutanix partner)

"From a visionary standpoint, it may be crazy to buy those big blocks of infrastructure when small solutions are more flexible." VCE partner

2015


The number of IT resources even in our biggest customers are being reduced dramatically.

What used to be 8 man shops are now 3 man, so they need our managed services even more.

They think CI or HCI are the “silver bullet.” But there’s always recurring services there for us.”

$30M SI/VAR with MSP practice, New England





End-users expect solution providers to take an active role in justifying new technology investment (pre-sales assessments and planning)

SP investments in emerging technologies focus on network and server based infrastructure offerings; (network security, MDM, VoIP)

SPs have modest expectations for high services attach rate and associated higher profits; indicates immature development of both project and annuity services strategy

Key Takeaways

Marketing and sales teaming top the list of solution provider key investments for emerging technologies; need to drive demand ahead of excess technical enablement

Vendor support requirements focus on core training and certifications; services enablement not a high priority, representing gap


End-users expect help with needs assessment, financial plan and demos in order to adopt emerging technologies

4%

6%

10%

21%

28%

31%

33%

66%

Manage the technology implementation,testing and tuning process

Do the internal training and changemanagement for our staff

Deliver and manage the technology in an MSPmodel

Present vendor/brand choices and makerecommendations for best

Determine an architecture plan forhow/when to deploy the technology

Do a POC or demo on recommended solution

Determine a financial plan or expected ROI

Do an internal needs analysis

(based on ranking of 1st or 2nd highest priority)

Lots of pre-sales support desired to build business case, esp. with lob decision makers so involved

internal needs analysis, scoping and financial plan

Less than 25% are ready for vendor/brand recommendations

“Many of our clients don’t have a predetermined IT budget. We work hard to help them build a strategic budget and plan, then maintenance of that plan and budget becomes part of our managed service.”$200M Cloud Integrator and MSP

Q: What are the most important ways in which you expect your IT solution provider(s) to help you evaluate or deploy these technologies? (N – 224)


Solution providers invested most in network security and mobile device mgmt. so far; several emerging technologies already being delivered in MSP or cloud model

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

IoT/M2M

SDDC

None

Big data/analytics

SDN

VOIP

Mobile Apps. Develop.

MDM

Network Security

Network security dominant infrastructure/on-premise skill; nearly ½ deliver in MSP model, preps for SDN investment

More than ½ of these technologies already being delivered in a managed or cloud service by partners with existing practices

MDM driven by customer demand and ties into MSP practices

SDN and SDDC standards still emerging; SPs not at critical mass yet

Q: For which of these emerging technologies has your company launched a practice in the last 12 months? (N- 440)

34% MSP

47% MSP

35% CLOUD 35% MSP

30% MSP 25% CLOUD

47% MSP 34% ON-PREM

ON-PREM MANAGED

SERVICECLOUD


Majority of SP’s expect only “slightly higher” profits on new tech. practices; highest expectations for increased profits aligned with SDCC and Cloud VOIP

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Mobile App. Dev. MDM Big Data/Analytics Network Security

Roughly on par Less profitable, due to investments of building the practice Slightly more Significantly more, due to high margin services attach rates Not sure

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

SDN SDCC Cloud VOIP IoT/M2M

May explain low rate of investment in app. dev.

Highest overall expectation for more profits with network securityHighest perceived

investment; detracting from profitability

Highest perceived margin opportunity


Between 40-50% of solution providers will leverage both new and existing vendor lines for emerging technologies

0%

10%

20%

30%

40%

50%

60%

Mobile app. dev. MDM SDN SDDC BigData/analytics

Cloud VOIP IoT/M2M NetworkSecurity

New Existing Both

Q: For each of these new practice areas, are you supporting technology from an existing vendor, a new vendor or both?

N - 121 N - 138 N - 102 N - 79 N - 98 N - 104 N - 121 N - 168

• Biggest leverage of existing vendor relationship –

• Most common outreach to new vendor –

• Most common category for leveraging both new and existing vendors -

App. Dev. new skill for many legacy IT solution providers

IoT requires existing infrastructure skills and new software capabilities

SDDC offerings available from many existing infrastructure vendors


Marketing tops list of key SP investments for emerging technology practice growth; GTM activities trump vendor certifications in the next 12 months

Q: In order to build a successful practice based on these emerging technologies, what do you anticipate to be the three most important investments for your company in the coming 12 months?

0%

10%

20%

30%

40%

50%

60%

SDN SDDC Cloud VOIP IoT/M2M

0%

10%

20%

30%

40%

50%

60%

70%

Mobile Apps. MDM Big Data/Analytic Network Security

Pre-sales technical staffing New vendor technical certifications A lab or demo facility

Field sales teaming with vendors New or enhanced marketing activities Customer success stories or references

Enhanced technical support (field or phone)

OVERALL RANKING

(AVERAGES)

1. New or enhanced

marketing – 52%

2. Field sales teaming

w/vendors – 48%

3. A lab or demo facility

– 48%

4. Pre-sales tech. staffing

– 47%

5. New vendor tech.

certifications – 45%

6. Enhanced technical

support – 44%

7. Customer references/success -

38%


SPs prioritize marketing as their #1 emerging technology investment; still need help to move messaging & demand generation from “products” …..


….. to “outcomes”


PRIORITY MDM BID DATA/ ANALYTICS SDDC SDNNETWORK

SECURITYCLOUD VOIP IOT/M2M

TECH. TRAINING TECH. TRAININGSALES/TECH.

CERTIFICATIONSTECH. TRAINING TECH. TRAINING TECH. TRAINING

POST-SALE

INTEGRATION

METHODS

FIELD ENGINEERSSALES/TECH.

CERTIFICATIONSSALES TEAMING

PRES-SALES

SERVICES METHODS.

POST-SALE

INTEGRATION

METHODS

FIELD ENGINEERS TECH. TRAINING

MARKETINGPRE-SALES SERVICES

METHODS.TECH. TRAINING

SALES/TECH. CERTIFICATIONS

PRE-SALES SERVICES

METHODS

SALES/TECH. CERTIFICATIONS

PRE-SALES SERVICES

METHODS

Top vendor support requirements are for technical training and formal certifications; lowest need for access to field engineers and “pull” marketing

Q: What support do you need most from the manufacturers of these emerging technologies in order to accelerate the success of this new practice area?

24%

15% 14% 12% 12% 12% 11%

GREAT TECHNICAL TRAINING

FORMAL SALES/TECH. CERTIF.

PRE-SALES SERVICE DELIVERY

METHODOLOGY

POST-SALE TECH. INTEGRATION

METHODOLOGY

ACCESS TO FIELD ENGINEERS

FIELD SALES TEAMING IN KEY CUSTOMERS

MARKETING PARTNER TO END-USERS

Ties to need for pre-sales influence

Ties to goals around recurring revenue

1

2

3


Training is Key. We only have so much time to allocate to “pie in the sky” technologies when we’re trying to keep the existing technologies supported. Give us training that helps us understand how to support your technology and enhance our managed or recurring revenue services at the same time. That gets our attention!”

$40M MSP and Microsoft/Dell/Cisco VAR


Marketing investment high – dependence on vendors low; training, certifications and access to sales/SE teams are top SP needs from vendors

11%

12%

12%

12%

14%

15%

24%

Marketing partners to end-users

Post-sale tech. integrationmethodology

Access to field engineers

Field sales teaming in keycustomers

Pre-sales service deliverymethodology

Formal sales/tech. certif.

Great technical training

SUPPORT NEEDS FROM VENDORS

38%

44%

45%

47%

48%

48%

52%

Customer references/casestudies

Enhanced technical support

New vendor tech. certifications

Pre-sales technical staffing

Fiels sales teaming w/vendors

Lab or demo facility

New or Enhanced Marketing

SOLUTION PROVIDER – KEY INVESTMENTS

Q: What support do you need most from the manufacturers of these emerging technologies in order to accelerate the success of this new practice area?

Pre and post-sale services mentoring underserved


#1 best vendor? Nable by Solarwinds. They have been just AWESOME to work with! They are Johnny-on-the-spot

with anything we need and are very involved in our strategic

direction across the board. We feel really important to them.”

What support expectations do you have of your leading vendors to help the growth of your emerging technology practice(s)?

We feel like we’re repeating the mistakes other solution providers have made, and we can’t afford to.” For example, how to exploit services implementation with the customer. The vendors see these wins/losses all the time, but they

charge us too much to collaborate on this stuff.”$200M SI, VAR and Cloud Integrator

$65M SI and Cloud Integrator specializing in manufacturing


Vendor Guidance

1. Continue to invest in pre-sales training and marketing tools around business-outcome and financial ROI selling

2. Enhance training specifically around pre-sales architecture services; include sharing of services methodologies

3. Build collaboration vehicles between successful MSP and cloud partners and legacy VAR/SIs

4. Continue to find ways to offset solution provider up-front costs for training and practice development in emerging technologies, with longer-term payback to you





Top Cloud Software Applications: By Delivery Model (End-users)

20%

20%

18%

18%

17%

13%

8%

6%

Payroll

Collaboration/Teamroom

Human Resources

Mail/Messaging

Customer relationshipmanagement

Office productivity

Content Mgmt.

Industry specific apps.

34%

29%

26%

25%

25%

24%

24%

23%

23%

21%

Mail/Messaging


Security

Human Resources

Content Mgmt.

Payroll

ERP


Office Productivity

Business intelligence

16%

16%

15%

14%

14%

13%

13%

12%

12%


Content Mgmt.


Security

Office Productivity

Mail/Messaging

Human Resources


Business intelligence

Public cloud services remain focused on non-mission critical SaaS apps

Q: Please specify which of the following applications your organization has already deployed or will deploy in 2015 via these three major cloud delivery models

Hybrid cloud used to blend mission- critical applications with

infrastructure scalability

Pu

blic

Clo

ud

Hyb

rid

Clo

ud

Pri

vate

Clo

ud

Private cloud used to scale legacy applications


Top Cloud Infrastructure Services: By Delivery Model (End-users)

30%

14%

13%

13%

12%

12%

12%

11%

11%

11%

11%

11%

10%

Storage Mgmt. BU an Restore

Web traffic mgmt.

MDM

Email Mgmt.

Security Services: Remote Email

Storage Mgmt. BC/DR

Storage Mgmt. Offsite Storage

Network/Infrastr. Mgmt.

Server Virtualization

Security Services

Security Services: VPN

Storage Mgmt.: Archiving

Storage Mgmt.: Infrastr.

41%

34%

33%

32%

30%

29%

29%

28%

27%

27%

27%

26%


Virtualized Desktop


Email Mgmt.


Security Services: RemoteEmail

VOIP Services


Storage Mgmt. BC/DR

Security Services

Help Desk/Call Ctr. Mgmt.


16%

13%

11%

11%

9%

9%

8%

8%

8%

6%

6%

5%

5%

5%

Email Mgmt.



MDM



VOIP Services


Web traffic mgmt.

Storage Mgmt. BC/DR

Peripheral Mgmt.



Desktop App. Mgmt.

Q: Please specify which of the following infrastructure services your organization has already deployed in 2015 via these three major delivery models.

Pu

blic

Clo

ud

Hyb

rid

Clo

ud

Pri

vate

Clo

ud

Public cloud use focused on storage, back-up & restore

Private cloud foundation is virtualized servers & desktop, moving into security services


End-User Decision Criteria Around Cloud Solutions – 2016

Q. Tothebestofyourknowledge,howimportantareeachofthefollowing decision criteria that may lead your company to deploy one or more cloud computingsolutions in 2016? Please rate on a scale of 1 to 5 where 1 means "Not at all important" and 5 means "Extremely important."

0% 10% 20% 30% 40% 50% 60% 70% 80%

Diversify IT systems

Compensate for lack of internal IT knowledge

Get access to new, innovative application functionality…

Provide competitive business advantage (faster time…

Control/improve profit margins

Offload maintenance/administration of applications

Move CapEx to OpEx

Enable flexibility or unlimited scalability of IT resources

Reduce new technology implementation time

Allow for data or applications to be accessed…

Add IT system redundancy

Provide business continuity and disaster recovery…

Most Important Least Important

• IT drivers around cloud still focus on operational efficiency & cost savings, disaster recovery and business agility

• Competitive advantage, faster time to market and innovation still not driving cloud deployment

• Reinforces solution provider focus on core infrastructure services


Top Infrastructure Services by Delivery Model: Solution Providers

Q: Which of the following infrastructure services has or will your organization influence, sell and/or implement in 2015, through each of these delivery models?

34%

34%

33%

33%

32%

32%

31%

29%

29%

27%

26%

26%

26%

24%

23%

23%

23%

22%

22%

18%



Storage Mgmt. BC/DR





Enterprise App. Mgmt.

Peripheral Mgmt.

Printer Mgmt.


Security Services

Virtualized Desktop

Web traffic mgmt.

MDM

Desktop App. Mgmt.

VOIP Services

Email Mgmt.

Security Services: Remote…


47%

45%

44%

43%

43%

41%

40%

40%

40%

39%

39%

37%

36%

36%

34%

34%

34%

33%

33%

30%


Storage Mgmt. BU & Restore

Security Services


Storage Mgmt. BC/DR

Virtualized Desktop


Desktop App. Mgmt.




Email Mgmt.



MDM

Web traffic mgmt.


Printer Mgmt.

Peripheral Mgmt.

VOIP Services

34%

33%

32%

31%

31%

31%

29%

27%

26%

26%

26%

26%

25%

24%

22%

21%

20%

19%

13%

12%


Email Mgmt.


Virtualized Desktop

Storage Mgmt. BC/DR



Security Services


MDM

Web traffic mgmt.


VOIP Services




Desktop App. Mgmt.


Peripheral Mgmt.

Printer Mgmt.


48%

42%

42%

36%

33%

33%

32%

31%

25%

24%

22%

19%

Mail/Messaging

Office Productivity


Security

Content or DocumentManagement

Business Intelligence


Industry Specific Applications

ERP

Supply chain management

Payroll

Human Resources

52%

42%

41%

38%

38%

35%

35%

32%

30%

27%

27%

26%

Security

Mail/Messaging




Office Productivity


Payroll


Human Resources


ERP

Top Software Applications by Delivery Model: Solution Providers

Q: Which of the following software applications has or will your organization influence, sell and/or implement in 2015, through each of these delivery models?

49%

47%

38%

38%

36%

35%

33%

32%

30%

28%

26%

24%

Security

Office Productivity

Mail/Messaging


Human Resources



ERP

Payroll




Documents

Channel Research Portfolio · very limited recurring revenue project based mostly SMB end-users high volume, lower prices “lifestyle” business Transformative: relationships with