How to Prepare for the Future of the IT Solutions Industry9:00 AM EST Tue. Oct. 23, 2012
Digital technologies are rapidly enabling new offerings and business models across all industries, including IT. Cloud infrastructure and on-demand business models, connectivity and mobility, big data handling and analysis, and social and local technologies are driving the world’s largest IT companies to change their go-to-market operating models and launch new products and solutions.
IBM recently introduced its zEnterprise EC12 mainframe model, with features tailored to deliver the most in-demand digital computing services. Other major players, such as Cisco, Dell, HP, and Microsoft, are moving quickly to reduce the scale of their legacy IT organizations and reinvest in digitization-enabled offerings and capabilities. At the same time, emerging IT competitors such as Amazon, Google, and Box are quickly scaling up digitized versions of traditional IT offerings, seeking to capture an increasing share of new spending as they migrate end-users over to more efficient business models.
[Related: Future watch: Emerging Vendors 2012]
The IT giants are embracing digital technologies as the centerpiece of their own strategies, and IT resellers and solution providers must evolve along the same path. As the IT majors ramp up their digitized offerings, resellers and solution providers need to understand this new landscape, adopt a clear strategy for how they will play in it, identify where they need to invest in key capabilities, and aggressively prioritize those investments. Leaders at every IT solution provider and reseller should take the following steps to ensure their companies are in demand from the IT majors in the future.
1. Develop Foresight Quickly. To stay competitive, you too must become digitization savvy. In order to turn your firm into one that will find a role in this emerging world of digitized IT offerings, you need to make sure you understand what opportunities will surface, which products and offerings will cease to be viable, and where investment will flow.
2. Establish Your Migration Strategy. Armed with a view of where the industry is going, you will need to create a focused strategy that outlines how you will supplement the IT majors’ new capabilities and strategies. This includes profiling the cloud business solutions that are most relevant to the industry verticals and client companies you serve, defining where your existing IT partners are focusing their cloud strategies and where they are reaching out to third-party support, and using this information to identify the specific places (cloud solutions, industry verticals, types of customer, IT partners) where you expect to be able to build a real right to play.
Of the verticals you serve, you should also determine which will be early cloud and digitization adopters and which will lag behind. For the early adopters, carefully choose the customer niches you will focus on first to develop and test your new operating models centered on cloud and digitized offerings. Although you can afford to wait for customer niches that may lag, you should still think through what they may need in the future, before competitors begin offering their own approaches. Finally, as you explore your new strategy, consider the entirely new verticals or customer types that you may be able to target in the future, after the urgent niches are addressed in the short term.
3. Build new capabilities. The cloud and other digitization offerings represent different challenges for your clients—which means you need to develop new capabilities to serve them. For example, you will need to know how to best integrate a number of cloud offerings into solutions that can serve the unique needs of target verticals in pragmatic ways. You will need to shift your own field workforce to master digitized offerings rather than the portfolios of hardware and software they have traditionally focused on. You will likely need to develop your own service as a service business models and become expert at recruiting, training, scheduling, monitoring performance, and following up on your field teams. You may also find it helpful to use your own business as a learning environment, testing the very same offerings that you will migrate your own customers toward using. And you will need to develop digitized business processes, such as your own social and local marketing and service capabilities, if you want to be credible in helping your customers do the same in their own business.
4. Become Fit for Growth. Finally, you will need to streamline your investments and channel them exclusively to the right growth areas. If you don’t, your upstream providers will force this action upon you. Don’t wait for them to undermine parts of your business as they shift their emphasis; instead, move aggressively to exit those parts of your business that they will cease to demand from you, and reinvest these freed-up resources in building the new digitization-focused offerings that your customers need.
As digitization transforms every industry, major IT companies are also transforming themselves to compete effectively with next-generation providers like Amazon and Salesforce.com. The implication for IT resellers and solution providers is clear: Either evolve your traditional offerings or risk losing your upstream IT clients to the sure-to-emerge companies that can sell, support, and install the full spectrum of newly digitized offerings. Leaders at IT resellers and solution providers who move preemptively to build out their own capabilities will be the ones remaining relevant and in demand in this new IT landscape.