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The Margin Q1 2021

The Margin Q1 2021

What will this year bring? It’s hardto offer predictions in this timeof great uncertainty, but thebudget delivered at the end ofFebruary had some soberingnews. The economy contracted by 7.2%, andthe lockdowns have cost the country aboutR230 billion so far.

The deficit has increasedto 14% of GDP and the debt-to-GDP ratio isnow at 80%. Meanwhile, corporate incometax will be decreased to 27% in an effort tomake the country more competitive. There’salso the matter of the country’s public sectorwage bill, in which we really are world leaders.Still, it’s not a bad time to be in the business oftechnology, the reliance on which has neverbeen more evident. Analysts expect there tobe about 5% growth this year, but it’s clearthere’s little appetite for bold moves, withmany customers postponing or abandoning ITprojects.

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One person not afraid to stick his neckout and make predictions is Jay McBain, theprincipal analyst for channel partnershipsand alliances at Forrester. Writing on his blog,he says governments and customers quicklyrealised that partners were an essentialservice and would be vital in their abilityto respond to the pandemic. The channel,meanwhile, emptied the laptop supply chainand responded to demands for remote work.Customers, including mid-sized companies,enterprises and the public sector, signalled ademand for automation and e-commerce tools,and also accelerated their adoption of cloudservices.

This, writes McBain, left many in thechannel out in the cold, particularly among resellers and managed service providers.The partners that excelled were those withthe skills and pre-built practices around thebusiness needs of their customers. Systemintegrators also struggled. But Infrastructure-as-a-Service providers boomed, and all thehyperscalers recorded good growth.

He believes companies are now consideringa permanent shift in their business model,including relooking workflows, processes, andeven their investments in commercial property.This will require new levels of support,infrastructure, continuity and security.

He says security threats are intensifyingas our ways of working change; partners arenow obliged to provide more secure productsand services. This advanced protection isno longer bundled into the monthly fee forantivirus products and firewalls, but presentsthe channel with an opportunity to expandtheir offerings around edge, network andapplications. There’s again a special focusaround security in this edition, with pieces onthe managed security service providers, aswell as advice on how to implement at zero-trust network policy.

McBain says there’s a broad move tosubscription models, and large vendors haveannounced changes in their go-to-marketstrategies. Dell Technologies, like Cisco,announced they’d be pursuing a 100%subscription model, and in the case of theformer, are pushing $92 billion into a recurringbusiness. You can find out more about Dell’snew partner programme on page 24.

McBain imagines a future where distributorswill have to shift their traditional business models away from product-based economiesthat have been with us for decades.

“To be relevant in the new world ofbits vs atoms, bought via subscription andconsumption models through marketplaces,distributors with deep industry expertise mustreorganise themselves to aggregate, facilitate,and orchestrate ecosystems of value creation.”

Craig Brunsden, Axiz MD, understandsthis, and outlines the challenges he faces.He also realises that it’s very fortunate to beselling technology at this time, saying: “Wecan count ourselves lucky.”

Matthew Burbidge
Editor
matthew@itweb.co.za

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