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Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
computerweekly.com
NOVEMBER 2016INDISPENSABLE CHANNEL ANALYSIS
RAW
PIX
EL LT
D/I
STO
CK
Resellers reach
for the cloud
Channel firms seek help from vendors to
make the transition to cloud services
MicroScopeHome
microscope.co.uk November 2016 2
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
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EDITORIAL
Editor Simon Quicke 020 7186 1412 [email protected]
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Take charge of your digital destiny
It struck me as I sat in the bowels of the huge expo halls which staged VMworld in Barcelona this year that there was a sense that time was running out for those resellers that have not yet devised their own digital transformation strategy.
VMware channel executives spoke of 2017 being a year of “execution”, after the past 12 months had been spent talking everyone through its expanded product portfolio and business plans.
What might happen to those that didn’t manage to execute the strategy next year was not totally clear, but there’s every chance it might involve some other sort of execution.
Everyone is holding out a hand to the channel and urging resellers to grab hold and be led through to a different world. The problem is that every single one of those hands is pulling channel players in a particular direction.
VMware might want resellers to sell more than just virtualisation and to get more involved with security and cloud technologies, but who knows where its partners have identified their next opportunities.
If the channel masters its own digital transformation, then it is pos-sible to see a situation where it is the partners more than the vendors that know what they should be doing. As resellers come to under-stand their business – its strengths and its weaknesses – and move closer to their customers, there are going to be those that discover their own strategic path free of vendor influence.
That might be some way off, but the power seems to be shifting. The days when a vendor could urge a partner to sell more of the portfolio, or else, could be replaced by the need for a more tactical discussion about why a particular product does not fit into the reseller’s strategy.
Michael Dell might like to say that bigger is better, but being the best is the aim of most channel partners. The more they learn how to do that surely means the more they will be in charge of their own destinies. n
Simon Quicke, editor
EDITOR’S COMMENTHOME
MicroScope
As resellers come to understAnd their business And move closer to their customers, some will discover their own strAtegic
pAth free of vendor influence
microscope.co.uk November 2016 3
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
Traditional partner programmes face challenges as shift to services growsPartners moving to a service-led model has profound consequences for traditional approaches, says Simon Quicke
There has been a lot of focus recently on resellers coping with the shift toward the services model and the corre-sponding pressure on existing financial models.
The challenges of moving to a new world are not just limited to the customer-facing end of the channel – it has caused some issues for vendors as well.
Manufacturers’ channel teams are having to do a lot of thinking around channel partner programmes as it becomes even more of an art to identify and reward value.
Changing modelsIn his keynote at the recent Canalys Channel Forum, Steve Brazier, CEO of the analyst house, directly addressed the chang-ing models for value and reward.
“You are moving to services,” he said. “The vendors are telling you to move to services, but how do you get the rebate? You have to make a revenue target on sales. How do you get to the top level of the programme? You have to achieve certain revenue thresh-olds, or you can’t get better prices and additional services.”
Brazier said much more work needed to be done by the vendor community to find a solution to this ever-growing problem. “This is a conundrum the industry has not yet solved,” he added.
Resellers might be struggling to transform their business and try to keep on the right side of vendor rebate plans, but the current market transition has also had repercussions for vendors.
Iain Stephen, lead for datacentre and hybrid cloud at HPE, said that as some of the top-tier partners rebalanced their businesses, their revenue mix changed and the vendor had to keep track of a changing relationship.
ANALYSIS
“the vendors Are telling you to move to services, but how do
you get the rebAte?”Steve Brazier, CanalyS
microscope.co.uk November 2016 4
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
“Our platinum and gold partners are somewhere on that jour-ney,” he said. “They might not sell as much as before, and that is a challenge for the vendor. Some have dropped from platinum to gold as they are transitioning.”
Stephen said that as well as revenue, there was more reliance on other measurements: “There are thresholds, and one can be cer-tification. There is a trade-off between specialisation and scale.”
Dell has just revealed the details of its partner programme for the single Dell Technologies company, and those involved with putting everything in place before the launch on 1 February 2017 also accepted that it was a challenge.
Michael Collins, senior vice-president, channel business, at Dell EMC, said trying to reward some behaviour “becomes an algo-rithm that is pretty complex to manage”.
The organisation is aiming to take the best of the Dell and EMC programmes and roll them into a unified structure that promises simplicity and profitability for partners. n WEYO/FOTOLIA
Reward still has to stack up with the move to services
ANALYSIS
“our plAtinum And gold pArtners might not sell As
much As before, And thAt is A chAllenge for the vendor”
iain Stephen, hpe
❯Dell EMEA channel chief heralds exciting second half.
microscope.co.uk November 2016 5
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
VMware: Sell more than just virtualisationVMware has widened its portfolio considerably and wants resellers to take advantage. Simon Quicke reports
Most of the channel has come to VMware through a rela-tionship with its vSphere product and the classic virtu-alisation pitch to customers. But this is a business that
is changing and looking to encourage resellers to operate in its current three areas of focus: cloud, mobility and security.
VMworld in Barcelona saw various product announcements to back up activities in security and mobility, and also provided a platform for Amazon Web Services (AWS) to outline the benefits of its partnership with VMware, which will launch next year.
There was a sense that the groundwork has been done and now the channel will be encouraged to respond with positive action.
Jean-Phillipe Barleaza, vice-president, partners and alliances and general business, EMEA, at VMware, said the firm was expecting to see a change in the behaviour of channel partners next year. “Digital disruption is getting to a tipping point and our custom-ers and our partners are going through a transformation,” he said. “What we are doing with our partners is to build those solutions that can bring the innovation back to customers and help them go through that digital transformation.
“What we have been doing over the past 12 months is really working with our partners to broaden their product portfolio and
solution portfolio that we are working on together. We have seen very strong adoption from our partners.”
Barleaza said each partner was working out which path to take as they went through their transformation towards a services model, but there had been movement to sell more of the available systems. “Now we are ready and have enablement and common understanding of our objectives, and 2017 is going to be an execu-tion year,” he added.
Rolling out changesThat groundwork has been fairly extensive and included not just bringing out different products and forming partnerships with the likes of AWS, but rolling out changes to partner programmes.
Henry Godwin, manager, distribution UK and Ireland at VMware, said the company had expanded over the past three years to make sure of its position as a software-defined datacentre leader, but many partners still knew it for its virtualisation products.
“A significant amount of our business is not vSphere,” said Godwin. “We can go right through from the datacentre out to the mobile user and we can offer secure private cloud and secure public cloud, and elasticity between the two.”
ANALYSIS
microscope.co.uk November 2016 6
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
Godwin said the vendor was holding a series of roadshows over the next few months to reach more resellers across the country and was leaning on distribution to make sure that as many part-ners as possible understood its message and offering.
One of the changes is in the mobile space, where VMware has waived its requirement for vSphere accreditation, so those with-out that background can work with it in their area of expertise.
Also, from the start of August this year, it increased discounts on the deal registration system for those selling storage, network-ing, security, mobile or management options, to make it attractive for resellers to move into those areas.
“We are supporting our partners to be successful and they need us to be flexible,” said Godwin. “This just demonstrates how much we are focused on our channel.”
Channel ambitionsVMware UK has also made efforts internally to ensure staff are aligned with channel ambitions. David Phull, vice-president and general manager, UK and Ireland, said it had taken several steps to drive the conversation beyond the core virtualisation mes-sage. “One is re-education of our salesforce. Second, it is extend-ing our salesforce to have specific sales people who specialise in some of the other technologies,” he said.
“Some partners are more traditional on our core technologies, but some are niche and can see opportunities with other tech-nologies [networking, security and cloud products]. Some want to do everything and some want to do very specific things, and we work out what is best for customers’ needs.” n IK
TERN
A/F
OTO
LIA
VMware wants to be known for much more than virtualisation
ANALYSIS
❯VMware points to decades of hybrid cloud ahead.
microscope.co.uk November 2016 7
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
Have you been in a meeting with your boss today? If you have, here’s the important question: have you told the boss what he (it’s usually a he) or she wants to hear?
There is a strong likelihood that half of you will have done exactly that by not giving an honest opinion in a company meeting.
A recent survey by Lumi found that 28% of employees were deterred from giving an honest opinion because of their boss, and a further 23% were concerned that they might create a negative impression if they didn’t toe the company line. In larger meetings, 48% were worried that voicing a personal opinion could be held against them or they would look foolish.
In an age where, as Lumi UK managing director Peter Eyre points out, there is a focus on “improving internal communications and employee engagement”, it is striking that a large proportion of employees have little or no faith that the process allows them to speak up and contribute ideas or insights that might challenge their bosses or run counter to the company line.
Dominating viewsThe resulting imbalance ensures that, for all their enthusiasm for meetings with team members, managers and companies are only really happy because those meetings tell them what they want to hear. Indeed, their enthusiasm for such meetings might be because they nearly always validate their strategies, unaware that this is usually because employees have felt constrained from expressing their true views on them.
No wonder that the same voices tend to dominate the discus-sion and they frequently put forward views that chime neatly with
OPINION
Let’s have a meeting in the echo chamberThere is a real danger, according to some research that has come to the attention of Billy MacInnes, that meetings are failing in their purpose
microscope.co.uk November 2016 8
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
the company line. But, as Eyre notes, if only a few people dominate the discussion, “the group intelligence will suffer”. No surprise, then, that products such as Windows Vista, the Zune, the Apple Pippin, the Newton and the Blackberry Playbook are launched.
The survey also found that women were less likely to speak up at meetings than men for fear of looking foolish – but the fre-quent predominance of male voices can also be a hindrance to innovation, with Eyre citing research that shows teams with more women outperform teams with more men.
That research found the teams that performed best were those with members “who communicated a lot, participated equally
and possessed good emotion-reading skills”. In general. women had much better skills when it came to reading emotions.
So, according to the survey findings, barely half of all meetings are of any real value to the organisation, apart from massaging the egos of managers and providing confirmation bias to the com-pany that employs them. This is not a good thing.
There is a real danger that company meetings can just become an echo chamber for yes men (and women), but that’s not exactly new. However, it might be worth managers paying more attention to the number of staff who don’t speak up at meetings and asking whether their silence really is golden. n
OPINION
RAW
PIX
EL.C
OM
-FO
TOLI
A
If just a few people dominate a business discussion, the “group intelligence will suffer”
microscope.co.uk November 2016 9
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
Technology is part of everyday life. At work, we use tech-nology to be more efficient and productive, so it’s hardly surprising if we want the same benefits at home. Of the
25 billion internet of things-enabled devices that, according to Gartner, will be around by 2020, millions of these will help con-sumers automate their homes.
Security, energy, entertainment and convenience are the key categories driving interest in this area. Not surprisingly, home security has been one of the most influential drivers and is top of the list for many households. The ability to obtain instant mon-itoring with high-quality video direct to a mobile device from a small smart camera has clear benefits.
Similarly, energy saving is also a high priority, with the poten-tial to reduce costs with energy-efficient devices and monitor-ing systems. For instance, Nest says its smart thermostats can produce average savings of 12% to 15%.
Home entertainment and appliances are also prominent, with giants such as Sonos and Samsung influential. In fact, Samsung has said 90% of its products will be able to connect to the inter-net by 2017.
Compatibility challengeBut herein lies one of the barriers. Consumers face a huge array of products from a variety of brands across different categories. Their first step is often to make a single purchase in one cat-egory. There is an expectation that a future purchase will enable connectivity – say, my lighting will work with my security system.
EXPERT VIEW
Breaking down the barriers to smart tech in the homeChannel businesses can take advantage of the rise in smart technology aimed at the home by offering much-needed advice about the interoperability of devices, says Rod Slater
microscope.co.uk November 2016 10
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
But because there has been no standard protocol, interoperability has become a barrier. Several ecosystems have developed, such as Nest, Apple HomeKit, Samsung SmartThings and Amazon Echo, with products that do not talk to each other. To truly become mass-market, consumers need to be aware, at the point of purchase or from a professional installer, which products work with each other.
Exertis has helped resellers with this through a “works with” message and a matrix showing brand compatibility.
While a mobile device will have an app to control the smart home features of your appliances, this is probably acceptable when you have one or two smart tech brands in the home. But when each product has its own app, it gets complicated and time-consuming to control home smart tech from apps.
Voice-activated devicesThe ability to voice-activate smart devices by simple commands has many advantages. The launch of Amazon Echo in the UK and its voice assistant Alexa, along with Apple’s Homekit with Siri, is positive for this market. Alexa can work with brands such as Nest, Hive, Yale, Philips Hue and Honeywell, giving instant voice control over heating, lighting and security, for example.
Consumers will also want to know the products they buy will work with other products they own and that their privacy is main-tained. The IoT can gather and analyse data from the variety of sensors in products and this can be used by other products to make the home more thoughtful, convenient and personalised.
Certainly, presentation of data that informs the consumer about their cost savings simply by turning down the thermostat by a
couple of degrees or ensuring lights are switched off during the day, will encourage investment. In terms of privacy, any connected device is vulnerable, but this should be put into perspective and calculated on a risk-versus-reward basis. Choosing a trusted brand is good advice and taking care of basic security, such as changing default passwords and applying updates, is sensible.
Although you don’t need a new home to take advantage of smart home technology, there is every reason to expect new homes to be built with much of this automation installed. A growing num-ber of property developers are including smart home technology, networking and entertainment in their buildings.
A new home should be a smart home, and that requires devel-opers, architects, builders and installers to be aware of the oppor-tunities that exist and plan for them accordingly. Insurers can also play a role by reducing premiums for homes that have extra secu-rity features, or smart appliances that detect leaks, for example.
According to Statista, this market will be worth $43bn globally by 2020 – triple its value in 2014. Resellers need a distribution partner that understands the market, has access to the leading brands, and can keep pace with the opportunity. n
EXPERT VIEW
Rod Slater is head of smart tech and IoT at
technology distribution and service provider Exertis.
microscope.co.uk November 2016 11
There is a little black lining in the cloud success story for channel partners, with many suggesting that vendors are not doing enough to help them make the transition to selling cloud-based services, according to research
from the Cloud Industry Forum (CIF) and Intermedia. The study found that nearly half (47%) of partners want more
guidance on issues such as contracts and service level agree-ments (SLAs) and 44% need additional technical support.
The CIF research also identified three common roadblocks for channel organisations selling cloud services: as many as 82% see cultural changes within the organisation as a challenge, 81% admit having suffered from staff shortages and 80% say they have experienced difficulty with cloud marketing and positioning.
Alex Hilton, CEO of CIF, says the findings show that the chan-nel is “clearly struggling when it comes to cloud deployments and missing out on major opportunities as a result”. While user adoption of cloud-based services has exploded in recent years, the channel “has not been able to keep up with demand”, he says.
Meet customers’ demandsBut are the vendors listening? And what can be done to ensure partners are getting all the help they need to meet their custom-ers’ demands for cloud-based services?
Neil Bramley, director of Toshiba Europe’s B2B PC business unit, accepts the pace of cloud evolution has “provided some challenges for the channel”. The greater cloud market may exceed $500bn by 2020, according to IDC, but “a one-size-fits-all approach for cloud services has not been viable for some time”, he says.
Help wanted for cloud take-off
Resellers want vendors to do more to help them
sell cloud-based services, says Billy MacInnes
CLOUD SERVICES
HOMEJAROSLAV MACHACEK/FOTOLIA
microscope.co.uk November 2016 12
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
Bramley agrees it is up to vendors to ensure part-ners have “the right training and support, as well as providing new cloud services that help differentiate and aid new business working practices”.
Kevin Sparks, director of alliances and channels for Dell EMC UK & Ireland, says: “It is important that vendors help resellers to sell the right cloud services to customers and help resellers collabo-rate within their VAR and cloud service provider ecosystems. The priority is to provide complete cloud solutions that customers want from on-premise, off-premise and hybrid.”
Like Bramley, Sparks emphasises the importance of training and the move by some cloud providers to “include security in their SLAs to offer a guarantee of protection on data”.
For Albie Attias, managing direc-tor at King of Servers, vendors’ priority should be to provide com-prehensive training and marketing collateral for resellers to sell cloud-based services more effectively. In some cases, he says, salespeople at a reseller may have no previous experience selling cloud-based products, and selling hardware such as servers and networking equipment is completely different to selling these services.
“To a reasonable extent, it is the vendor’s responsibility to ensure its product is being sold correctly,” he adds. This requires full demos of the software and a dedicated session with the
reseller’s sales staff to ensure they are confident of what they are selling, says Attias.
But that doesn’t always happen, he adds, and “the absence of a face-to-face training session has been detrimental to developing the detailed under-standing required to do the selling job justice”.
Michael Frisby, managing director at Vuzion (and parent Cobweb Solutions), agrees the transition to
cloud service provider can be daunting for many resellers. “They need help keeping sellers current on evergreen cloud services, re-architecting solution implementation and customer support, through to implementing an efficient billing solution,” he says.
Vendors such as Microsoft are laying the foundations to help resellers make the switch, says Frisby, but resellers also need help
that traditional distributors aren’t set up to provide.
Frisby says providing partners with an easy-to-use transactional platform for ordering cloud ser-vices is just the starting point. “Helping resellers modernise their marketing by providing ready-to-go campaigns and customer
engagement content for use across multiple communication channels is key to help them acquire more customers,” he says.
Frisby says resellers should be aware of complementary ser-vices, such as billing-as-a-service and support-as-a-service, to help them move to the cloud with an efficient operational
CLOUD SERVICES
❯CISOs may be unfamiliar with cloud service-level
agreements, but they are still a necessary part of
enterprise security.
“to A reAsonAble extent, it is the vendor’s responsibility to ensure
its product is being sold correctly”alBie attiaS, King of ServerS
microscope.co.uk November 2016 13
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
platform. He points out, for example, that with more than 2,800 “billing counters in Azure, it is very easy for all the margin and more to be used up working out each customer’s bill every month.
Richard Lockey, UK country manager at Crayon Group, says close collaboration between vendors, distributors and customers is required for the move to a cloud-based service model. “Where contracts and SLAs are concerned, they need to be fully backed up with service offerings that deliver against the SLAs,” he says.
And vendors need to provide a level of flexibility where back-to-back agreements are needed, says Lockey. He adds that vendors must be aware that moving to a cloud-based reseller model “can cause some short-term pain, especially for those that have had to invest heavily in staffing and management platforms and can no longer rely on one-off infrastructure deals for cash flow”.
Diverse ecosystemSimon Skellon, UK vice-president at Mitel, says the onus is on vendors to support partners in an increasingly diverse ecosys-tem, “so they can respond to customer requirements”.
As part of its proposition, the vendor provides partners “with full contract and SLA backup to guarantee high performance”, says Skellon. It also provides training on the company’s technol-ogy, the various software upgrades and the benefits.
By using open standards-based products, partners can eas-ily integrate cloud services into other applications and industry standards, he says. “With Mitel cloud solutions, they can build their own bundles with partner-centric SLAs or they can offer white label products with market-based SLAs for cloud.”
CLOUD SERVICES
Simon Skellon, Mitel: The onus is on vendors to
support partners “so they can respond to customer
requirements”
microscope.co.uk November 2016 14
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
Skellon adds that with budgets shrinking across the board, ven-dors need to work closely with partners and fine-tune training so they are fully equipped to respond to these changes quickly.
Ankush Korla, EMEA vice-president for channel sales at Commvault, says partners are having to define their roles in a cloud-based future. “Are they going to be a cloud builder for cus-tomers or a cloud services provider – or simply a reseller?” he says. “Smart vendors should be delivering service and cloud ena-blement programmes based on advanced curricula and certifica-tions that allow partners to build deeper expertise and practices around cloud-based services through to health check services. This allows partners to enhance their value to customers.”
Constantly evolveGiovanni Di Filippo, EMEA vice-president channel sales at Riverbed Technology, says vendors must constantly evolve their cloud enablement initiatives, “just like the cloud market itself”, and enable partners to cross-sell as many technologies as pos-sible. “The more vendors offer their partners technology that integrates with other products, the easier it is for them,” he says.
Resellers need to know how to sell cloud consulting services as well as cloud solutions, says Di Filippo, and vendors and partners can work together to provide proactive customer support.
“Cloud requires high engagement from customers, and partners need to be ready to provide support at the drop of a hat if they want to avoid churn,” he adds. “Vendors can help with incentivised managed services and enablement programmes, comprehensive training and leading-edge subscription licensing methods.” n
CLOUD SERVICES
Ankush Korla, Commvault: “Smart vendors should
be delivering service and cloud enablement
programmes”
microscope.co.uk November 2016 15
Insurance is an essential and inevitable cost that businesses need each year. It shouldn’t need stating, but a large claim or loss could have catastrophic consequences for a business. Firms need to ensure they both have adequate insurance in
place and understand the obligations they owe their insurers.It is for these reasons that Simon Brooks, a partner and head of
insurance at the Eversheds insurance group, says firms need to know about the Insurance Act 2015, an important piece of legisla-tion that came into effect on 12 August 2016.
The changes the act brings in are the most significant reform to insurance law – it partly replaces the Marine Insurance Act 1906 – in more than 100 years. Since 2013, consumers have had the ben-efit of the Consumer Insurance (Disclosure & Representations) Act 2012 and it was thought right that businesses should also gain a fairer law to govern their commercial contracts of insurance.
“The act alters what businesses have to do to ensure that their insurance policies are effective and that claims are paid out in full,” says Brooks. “In part, it also seeks to address some of the perceived unfairness in the old law, which was viewed by many as favouring insurers over policyholders.”
Material factsWhen taking out an insurance policy, a business is under an obli-gation to disclose to the insurer all “material facts”. At law, these are facts the insurer would want to know in deciding whether to accept the risk and, if so, on what terms.
Brooks illustrates this with an example: “When taking out a motor policy, information about the driver is likely to be material
How to keep covered under new insurance law
Adam Bernstein explains the ramifications of the
Insurance Act 2015, which came into force this summer, for policyholders and insurers
INSURANCE
EVENCAKE/FOTOLIAHOME
microscope.co.uk November 2016 16
Home
Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
to the insurer. If this is not disclosed when the pol-icy is taken out, an insurer may be entitled to ‘avoid’ or cancel the policy, meaning that it is as if the pol-icy never existed and the claim will be uninsured.”
Clearly, this can be a difficult obligation for busi-nesses to comply with because they have to con-sider what information is likely to be relevant to the insurer (and not what is important to it). The pen-alty in the event of a non-disclosure, whether innocent or not, is cancellation of the policy, which can be very draconian from the policyholder’s point of view.
Duty of fair presentationUnder the new act, there is now a duty governing the informa-tion that a business must disclose to an insurer before the policy is taken out. This is called the duty of fair presentation.
Brooks emphasises the need for full disclosure: “It is very important that businesses understand the practical implica-tions of the new duty, as a failure to comply may give insurers grounds to refuse to pay a claim, or reduce the amount they are required to pay.”
Under this duty, businesses are still required to disclose every material circumstance that they know, says Brooks. “This key point hasn’t changed. A business still needs to ask itself whether it is aware of information that is likely to affect the judgement of a ‘prudent insurer’ in determining whether to cover the risk.”
It is good practice for businesses to disclose everything in their knowledge to insurers to make sure they fall within the rules.
The new legislation goes further – one of the most important changes introduced by the act is that a business will now need to disclose not only information that it knows, but also informa-tion it ought to know. “This is a new concept,” says Brooks. “Essentially, businesses will now need to disclose material information that should have been revealed by a ‘reasonable search’.”
The act does not set out exactly what will be regarded as “rea-sonable”, and this is deliberate because it is very difficult to legis-late what will constitute reasonable in relation to different types of business and different classes of risk. Brooks’ advice is that to comply with this part of the duty, individuals who are responsi-ble for arranging insurance within a business will have to consider where material information could be stored, and search for this information to the extent that it is reasonable to do so.
Searches of other organisationsInterestingly – and a point many will miss – the act says it may be “reasonable” in certain situations for a business to carry out searches of organisations other than its own. In other words, it may be considered reasonable to make enquiries of suppliers or professional advisers with regard to certain risks.
“Management will not be able to turn a blind eye to areas inside or outside the business where they suspect material information may be held,” says Brooks. “A failure to search for, and disclose, material information stored in these areas could amount to a breach of the new duty.”
INSURANCE
❯CIOs and IT departments in the insurance industry must
strive to create an environment that will support the business
focusing on future innovations.
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Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
The good news for purchasers of insurance is that the “old”, automatic remedy of avoidance of a policy in the event that a business fails to disclose material information to an insurer, has been replaced by “proportionate remedies” based on what the insurer would have done had a fair presentation been made.
Nothing has changed if a failure to comply with the duty of fair presentation was deliberate or reckless. The act says this may give an insurer grounds to avoid the policy.
However, as Brooks notes, if the failure was not deliberate or reckless, the insurer may:n Still avoid the policy if the insurer would not have written it had
a fair presentation been made;n Amend the terms of the policy
to those it would have agreed had a fair presentation been made, and apply those terms to the claim; or
n Pay only a proportion of the claim if it would have charged a higher premium had a fair pres-entation been made.
There is some industry discussion suggesting that the pro-portionate remedy for claims where there has been a material non-disclosure is not very fair. As is noted above, if the insurer would have charged a higher premium had it known about the non-disclosed material fact, it can reduce proportionately the settlement of a claim (and potentially previously paid claims). On small claims, this is not too much of an issue, but consider
the following example. The insurer increases the premium from £1,000 to £1,500 (50%) and the client has a claim for £50,000. The additional premium of £500 is disproportionate to the cli-ent having their claim settlement reduced by £25,000. There are a handful of insurers (Zurich and Hiscox, for example) that have contracted out of this rule and instead will charge the client the additional premium but still pay the claim in full. Other good insurers are likely to follow suit.
Insurance policies often contain terms such as “warranties” and “conditions precedent”. These are conditions an insured business must comply with. For example, a buildings policy may contain a warranty that the fire alarms need to be fully operational.
“Under the ‘old’ law, a breach of warranty automatically permitted insurers to refuse to pay a claim,” says Brooks. However, and this is a change for the better for policy-holders, the act has the effect of transforming warranties into “sus-pensory conditions”.
“This essentially means that the insurer will not be liable to pay any claims while the insured busi-ness is in breach of warranty,” says Brooks, “but if the business later remedies the breach (if that is possible), then the insurer is generally liable for subsequent claims.”
Under the old law, it might typically have been the case that a property damage/business interruption policy required the insured to have a working fire alarm at all times. In the event of
INSURANCE
“the insurer will not be liAble to pAy Any clAims while the insured
business is in breAch of wArrAnty”Simon BrooKS, everShedS
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Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
a flood, to the extent a working fire alarm was not in place, the insurer would have been automatically entitled to decline cover, even though the absence of a fire alarm may not necessarily have caused the loss. Under the new law, this is no longer the case.
“A further, and important, change is that an insurer will only be allowed to rely on a breach of a warranty or condition prec-edent in declining a claim if the loss is connected to the breach,” says Brooks. “For example, an insurer will not be able to rely on a breach of the fire alarm warranty, referred to above, in declining a flood claim. It could, generally, only be relied on in declining a fire claim.” This change is a real help to businesses that tempo-rarily lose sight of their obligations.
Brooks says firms should be familiar with, and understand, all the terms in their policy and comply with them. But the act means there may be occasions when an insurer will find it more difficult to decline a claim if a term has been breached.
Another change, and one that may not be obvious, is that in business contracts, the parties to a policy are free to contract out of any part of the act, apart from those relating to basis clauses – the declaration on an insurance proposal form or policy contract stating that representations made by the purchaser (the poli-cyholder) are true and accurate. “Contracting out removes the rights the new act has conferred on policyholders,” says Brooks.
But the right to contract out is not simple and the insurer must clear two hurdles. First, it must take steps to draw the term to the
business’s attention before the contract is concluded; and second, the term must be drafted so its effect is clear and unambiguous. This requires the insurer to explain the effect of the term.
The new rules go a long way to making a more level playing field between customers and insurers and, with the addition of the Enterprise Act 2016 (which comes into force in May 2017 and introduces the potential for damages being paid by insurers to claimants for late payment of claims), are a great improvement.
Brooks says the new proportionate remedies in the event of a breach of the duty to make a fair presentation of the risk should bring fairer claim outcomes. He also welcomes the changes on war-ranties and conditions precedent.
But he tells businesses: “Sit down with your insurance broker or lawyer when taking out or renewing policies to
ensure you fully understand what information you are required to disclose to insurers and what searches are needed to reveal this information. This is potentially a difficult area, involving some new concepts, and time may be required to bed down best practices.”
Remember – if you need your insurance to cover contractors working for you, any extra risks that they and their business bring to your insurance must be disclosed. Document the information-gathering process, including a list of who counts as senior man-agement and who has provided the information. This is vital if you are relying on what someone else has told you and this later proves incorrect. Firms that plan ahead will be on much safer ground. n
INSURANCE
“contrActing out removes the rights the new Act hAs
conferred on policyholders”Simon BrooKS, everShedS
microscope.co.uk November 2016 19
Tell us what you do for a livingI am responsible for ensuring that Aerohive’s international channel community is well supported with easy-to-understand, easy-to-execute marketing campaigns and programmes to help them drive pipeline and improve revenues.
Why are you the right person for this job?Working successfully in the channel is all about building trust, continually adding value and developing stable, reliable and lasting relationships with your partners and your internal team members. My true talent is establishing connections and build-ing robust, open relationships and lines of communication.
What gets you up in the morning?Usually my son, both physically and subliminally. Physically as he’s usually ravenous and noisily lets me know; subliminally because he’s the single biggest reason I’ve worked as hard as I have for the past 10 years.
What is the best or worst business advice you have received and from whom?It’s a cliché, but “always deliver what you promise and you won’t go far wrong”. That has always resonated with me and I always try my best to stick to it.
Who helped you get to where you are today?Both my parents were successful in business and have always supported me in my drive to excel professionally. I’ve also been
Jennifer CapewellAerohive Networks
MicroScope puts its questions to Jennifer
Capewell, senior international channel marketing manager
at Aerohive Networks
FIVE-MINUTE INTERVIEW
HOME
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Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
blessed with a series of brilliant business mentors in my career who have taught, guided, challenged and managed me.
What advice would you give to someone starting out today in IT?Keep learning but stay focused. The IT industry continues to evolve and develop at a crazy rate. Aim to become a specialist in a field, because you’ll never know it all.
What do the next five years hold for the channel?Solid growth as more and more vendors become “channel first” and resellers embrace those vendors that are leading the way. MSP programmes will continue to be important and terms such as SD-LAN and its delivery will transform the channel landscape.
Tell us something people don’t know about youI lived in New Orleans for a year and can’t stand jazz.
What would be your Desert Island MP3s?Canto della Terra by Andrea Bocelli, Green Eyes by Coldplay, Adagio for Strings by Tiesto, Faded by Alan Walker, and any-thing by Ed Sheeran, anything by Mozart. I have wide and varied musical tastes.
What is the best book you’ve ever read?In my youth I loved the classics, with my favourite being Wuthering Heights. More recently, I’ve retained my sense of romanticism and would say One Day struck a chord.
And the worst film you’ve ever seen?Not because it’s a bad film, but for me because it literally gave me nightmares for six solid months: The Grudge.
What temptation can you not resist?A good night out.
What was your first car and how does it compare with what you drive now?My first car was a beaten-up Volkswagen Polo. I was just start-ing out and commuting to London by train. Three times a week, without fail, the car broke down on the way to the station. These days I drive a Porsche, so things have certainly changed a bit. I would definitely describe myself more as a petrolhead than a handbag and heels girl.
If you were facing awesome peril and impossible odds, which real or fictional person would you most want on your side and why?It’s got to be Bond – Daniel Craig Bond. He always finds a way to win – classy, sophisticated and his wardrobe is killer.
And finally, a grizzly bear and a silverback gorilla are getting ready for a no-holds-barred rumble. Who is your money on and why?The gorilla for sure – solid physical power, much smarter, more skills, loyal protector. Very much like how a reseller should choose a vendor. n
FIVE-MINUTE INTERVIEW
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Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
Security concerns trump Brexit fallout fearsSimon Richards, managing director, Igel TechnologyWe live in times characterised by the “new normal”. Obviously there’s Brexit. Pundits, politicians and the chattering classes really didn’t see that coming and the fallout of leaving the EU has only just begun. Then there’s a possibility – albeit depressing – of a Trump win in the two-horse US presidential election race.
But forget the sideshow of Brexit and Trump, the real meat-and-potatoes mega-issue for business today concerns security. Consumer confidence has been shaken by this. People are on edge. You only have to consider what happened at Los Angeles International Airport to see how real it is – an actor dressed as Zorro initiated airport lockdown until it was realised that it wasn’t a terrorist attack.
Amazingly, Disneyland Paris has gone all gun-toting Van Damme, too. At a recent visit, it wasn’t Mickey and Pluto who caught my eye, rather the M-16-sporting military patrolling the rides in some Logan Run-esque new order following the attacks in Paris, Nice and Brussels.
Paranoia about security must be our “new normal” in the IT industry. Certainly the athletes hacked by the Fancy Bears will endorse that. We have to make technology work for us. Video conferencing, Skype for Business and Citrix’s Go to Meeting have all been around for years. The technology is there to help facilitate different and secure ways of working to minimise risks to staff and we must use it.
Also, locking down the desktop even more with thin and zero clients is not a nice-to-have IT option any more, but a necessity because it greatly reduces hacking, phishing and spamming by removing the necessity for users to even think about it. Security is then controlled centrally by professionals. And don’t think for a second that you can’t run modern multimedia applications in these types of environment. The game has moved on. You can.
The good news for the channel is there is money to be made by using the software thin client approach, plus the scope of the users’ virtual desktop infrastructure (VDI) budget goes wider. Our channel partners have proved that to us, and with solid margins on the technology. It’s a win-win for both users and channel partners.
CHANNEL COMMENT
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microscope.co.uk November 2016 22
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Editor’s comment
Traditional partner programmes face challenges as shift to services grows
VMware: Sell more than just virtualisation
Opinion: A meeting of minds or a massage for management egos?
Expert view: Breaking down the barriers to smart tech in the home
Partners keen to take off into cloud
How to keep covered under new insurance law
Five-minute interview: Jennifer Capewell, Aerohive Networks
Channel comment
Evolving cyber threats require disaster recovery rethinkPeter Groucutt, managing director, DatabarracksThere has been a significant shift in the types of continuity risks businesses face. Previously, the main causes of disaster were human error or hardware failure, but now cyber attacks are the dominant threat. Highly organised ransomware attacks, in the form of crypto viral extortion, effectively lock data and halt any activity until either a ransom is paid or the system is reset.
This poses a problem for the disaster recovery (DR) industry. Traditional DR services are not optimised for cyber threats, focus-ing instead on robust recovery from human error or system fail-ures. The replication software used for rapid recovery will copy any malware or cyber threat from the production environment to the recovery environment. While it is possible to revert back to earlier copies of the environment, these additional snapshots take up storage, so are limited to a relatively short recovery window.
In the case of ransomware, recovering any data beyond that point means reverting to backups and trawling through historic versions to find clean data and start a lengthy recovery process.
Continuity services are often considered a grudge purchase – the insurance policy you never want to cash in. But now cyber attacks are more than a risk – they are almost inevitable. Organisations need specific continuity plans in place to deal with cyber threats, and must have the correct technology to support them.
This is a major issue for the DR market and needs to be addressed from both sides. On the one hand, DR providers need to remain agile and innovative to adapt services to combat the cyber threat landscape – to neglect this puts their own and customers’ busi-nesses at risk. On the other hand, user organisations need to pri-oritise DR services, putting greater demand on their providers for more proactive services.
This is easier said than done in a market that is becoming satu-rated with one-stop-shop cloud providers that offer little special-ism in disaster recovery or business continuity. It’s very easy to back up and replicate your data, but recovering that data after a cyber attack is much harder and requires experience and skill that only specialist DR providers can provide. That will be the key for organisations to truly protect themselves against cyber threats. n
CHANNEL COMMENT
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