Change is afoot in the channel – if the enterprise gets its way

This is a question, among many others, that TalkTalk Business sought to answer in a unique wave of research we conducted alongside industry analyst, Ovum, this summer. In polling 200 firms – ranging in size from 250 to 1000+ employees – we reveal the true state of the enterprise buyer’s relationship with the channel.

In publishing these findings, as part of a comprehensive new report, we hope to stimulate a period of careful soul searching and, ultimately, a fundamental change in the way that the SI/VAR community interact and serve British businesses.

That’s because the research supports the need for change on multiple levels. There’s no getting away from the fact that it will make uncomfortable reading for many operating in the channel – just as it should for the army of vendors that support it. But let’s not shy away from the need for change, just because it’s easier not to. The customer has spoken and it’s now incumbent upon individual SI/VARs to determine whether their current strategies are fit for purpose.

Deep-rooted dissatisfaction [Figure 2]
The study pointedly reveals significant end-user frustrations – mainly attributed to SI/VARs perceived failure to understand and act upon their business needs. And, although cost inevitably dominates the conversation, the concerns go much deeper and point towards an inherent mistrust towards the channel that is intensifying rather than dissipating.

In short, organisations are looking for considerably more transparency from their partner – and they’re not just whispering or hinting at it either. Most want to be actively involved in the SI/VAR’s vendor selection process, suggesting that the era of cosy preferred supplier arrangements is over for vendors and resellers.

However, this isn’t a one way street. Clients confess to their shortcomings too with the vast majority of technical and commercial buyers admitting that they have different and often conflicting agendas. The only thing they all agree on – naturally – is the need for cost reduction.

But cost control is not a new predicament for the channel, which actually makes it all the more surprising that partners haven’t adapted their commercial models more radically and much sooner to offer value in different ways.

Choice and transparency [Figure 1 & Figure 3]
Despite the growth in new players in the channel – from business consulting firms to networks with channel aspirations – by and large, most clients don’t think the SI/VAR sector has enough in its locker. This is especially the case when it comes to providing adequ

ate choice in their product portfolios.
The research suggests there is an inverse relationship between the growth in technology and the level of customer satisfaction. So, as more technology is brought to market, ironically, the channel/enterprise relationship becomes more strained. This appears to be a consequence of some SI/VARs adopting rigid product portfolios that starve clients of much needed innovation and value for money.

Of course, this is an accusation levelled at a range of suppliers, and not just SI/VARs, but CIOs are adamant that their partners should be more prepared to bring third party solutions to the fore. These must be best-of-best, truly business grade and not just standard off-the-shelf solutions delivered through preferred supplier networks.

No supplier can expect to cover all of the bases in the short to medium term, and business leaders understand this, but the channel has an opportunity to better serve the market through service aggregation, more agnosticism and flexibility of provisioning.

Crucially, those solutions need to cater to specific parts of the market due to their varying wants and needs. For example, mid-sized companies (500-999 employees) want improved technology, better partnering and more standardization – cost reduction does not appear in their top three priorities.

In contrast, larger (1000+ employees) and smaller enterprises (250-499 employees) expect a big uptake of cloud type utility payments models. While mid-size companies are much less enthused by this, around two thirds of large and smaller organisations expect to use PAYG in the future.

Network needs [Figure 4]
As more technology is brought to market and delivered through mechanisms like the cloud, the importance of the network becomes more pronounced and vital in the success, or not, of those deployments. We therefore took a look at what network priorities exist within the enterprise.

Nearly half of respondents are keen to have adaptable, ‘burstable’ bandwidth to support new technologies and applications. A similar number also want network management features, such as cost monitoring, performance and measurement.

Only a quarter are concerned with who is delivering the network, highlighting that clients are more preoccupied with performance and control rather than which brand provides the infrastructure. With decision makers leaning towards the need to be involved with the network operation, this suggests that connectivity is becoming more important to the enterprise and is no longer considered an afterthought.

There are likely to be few negative consequences from switching network supplier if you get the solution spot on – customers don’t have brand loyalty to legacy network operators and nor should you. The right end product at the right price should always come first and will be the key to forging closer-knit customer relationships.

Listen and learn
The headline findings from the research underpin the belief that there is a semi-dysfunctional relationship between the enterprise and the channel, which is removed from the close, interdependent relationship that clients enjoy with other vendors, such as telcos. This, perhaps, comes from operating with these suppliers’ services everyday and the level of understanding that inevitably follows.

As in all things in business, it’s important to know what makes your buyers tick and we hope that SI/VARs will take the rough with the smooth from this report to better inform their working relationships going forward. After all, a properly functioning channel, meeting the needs of the modern enterprise, can only be good for British business.

To download your free copy of the report, please visit:
http://www.talktalkbusiness.co.uk/systems-integrator