The Final Cut
By Steve Burke
IT-Telecom Convergence: 'All-Inclusive' Offering Changes The Game
September 30, 2013
ServIT Inc., a $27 million Kennesaw, Ga.-based solution provider, is a classic example of how IT-telecom convergence is recasting the traditional solution provider business model. ServIT has been experiencing 400 percent services sales growth in the past several years with its "all-inclusive" technology services offering.
ServIT's "CIO in a box" technology offering includes everything from co-location to managed cloud to managed backup to telecom services, and it's resonating with customers who are demanding a single throat to choke as they navigate the blinding pace of change that has come with the convergence of IT and telecom in the cloud era. "It is just on fire," said Allen Brooks, executive vice president at ServIT, of the technology services offering. "Our customers are asking us to either help them expand their workforce [with solutions driving sales growth] or replace their workforce."
ServIT's success is just one of many examples of customers moving aggressively to invest more in line-of-business, customer-facing offerings and less in IT-telecom administrative overhead. It's that trend that is driving more customers to outsource IT-telecom overhead to solution providers such as ServIT.
[Related: CRN's 2013 Network Connectivity Services Partner Program Guide]
"We take it all, we do everything," said Brooks. "It is all-inclusive. You pay us one fee for all your IT services, and the headaches go away." ServIT, which operates in 16 states, is one of the solution providers taking advantage of distributor Synnex's game-changing partnership with Comcast Business Solutions.
In a deal unveiled at last month's XChange conference, Synnex became the first IT distributor to serve as a master agent under Comcast's Business Solutions Provider Program.
The Synnex-Comcast deal is only one small part of the story. Our XChange conference was abuzz with solution providers moving aggressively to ramp up their telecom service offerings. The paradigm shift has solution providers teaming with master agents such as Intelisys and WTG, telecom providers such as AT&T, CenturyLink, Charter Business, Comcast, EarthLink Business, Time Warner Cable Business Class and Verizon, and cloud service providers such as Datto, Dropbox, Exablox, NaviSite, SaaS Markets, Sonian and Soonr. Brooks said his company's new relationship with Comcast via the Synnex deal is critical.
"No fewer than 50 times have we used a backup Comcast circuit and called 1-800-Comcast on behalf of our customers," he said. "For us, it's exciting, not just from a revenue perspective, but to have actually formed through Synnex a relationship with Comcast."
Brooks is planning to up the ante with a complete menu of telecom services based on broadband consumption, offering a number of options for customers including an all-you-can-consume service with help desk and business continuity services. "Every building, every business needs this [telecom service]," he said. "From a VAR perspective, this really opens up a lot of creative ideas."
BackTalk: Steve Burke writes a monthly opinion column on CRN.com. You can reach him via email at steve.burke@ubm.com.
Time To Grow Or Time To Die: Recasting The Solution Provider Business Model
August 26, 2013
Legendary Apple co-founder and visionary Steve Jobs once called death "the single best invention of life. It is life's change agent. It clears out the old to make way for the new."
Jobs' sanguine view of death says as much about companies as it does about human beings. It is a concept worth thinking about as we grapple with the creative destruction that is ripping the traditional solution provider model to shreds. In fact, more than 70 percent of the companies on the SP500 list in 2003 one decade later have disappeared from the 2013 list either through merger and acquisition, bankruptcy or through other means.
The rapidly accelerating pace of change recasting the solution provider business model and the technology services choices facing the channel is exactly why CRN through its parent company started the BoB (Best of Breed) conference three years ago. This year the conference, aimed at providing thought leadership to take the channel to high ground, takes place Oct. 15-17 at the Grand Hyatt Tampa Bay in Tampa, Fla.
[Related: CRN Exclusive: HP's Whitman On Enterprise Group Issues, Street Fight With Cisco And EMC]
Given Hewlett-Packard's innovative drive to rip up the old server model with its HP Moonshot server, it is no small matter that HP CEO Meg Whitman will be hosting a live question-and-answer session at the event.
If you want an example of just what kind of steps you should be taking to become a solution provider cloud power, look no further than GreenPages Technology Solutions, which has undergone a radical transformation under the leadership of CEO Ron Dupler. Most notably, GreenPages' Cloud Management-as-a-Service (CMaaS) platform, which was brought to market in January, is rapidly gaining momentum with more than 120 customers now running the service.
GreenPages, by the way, was No. 264 on the SP500 list 10 years ago with $78 million in sales. Today, GreenPages is No. 154 on the list with $126 million in annual sales. Some other good examples of companies that are making the grade in the cloud era: NWN Corp., which was founded in 2000 and was not even on the list a decade ago, is now No. 88 with $266 million in annual sales thanks to the vision of founder and CEO Mont Phelps; Compugen, which was founded in 1981 by current CEO and President Harry Zarek,was No. 164 on the list a decade ago and is now No. 58 with $443 million in annual sales; and finally, Denali Advanced Integration, under the leadership of founder and CEO Majdi "Mike" Daher, was only a $19.5 million company a decade ago, and is now No. 114 on the SP500 with $114 million in annual sales.
The lesson for solution providers that want to climb the ranks of the SP500 is simple: Change or die. That means making sure you understand the business and technology models that are ripping up your business, and adapting to them. That is what the BoB conference is all about. It's an investment that is sure to pay off. Those interested in learning more about the event can email Christopher Kopacko or call him at (508) 416-1161.
How Peeved Is Jeff Bezos At HP-Workday Deal?
June 19, 2013
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Hewlett-Packard COO Bill Veghte caused quite a stir when he closed the company's recent Discover conference with the announcement that HP had inked a deal that makes Workday a customer for HP's public cloud.
Amazon Web Services, for its part, was quick to point out that Workday remains an Amazon Web Services customer, and that the relationship between Amazon and Workday continues to grow. Pleasanton, Calif.-based Workday is not talking.
[Related: Big Amazon Customer Signs On To HP Public Cloud]
Two things are certain:
1. HP has won a piece of the Workday business.
2. Amazon CEO Jeff Bezos is an investor in Workday.
Bezos' investment in Workday came as an $85 million Series F round of financing in October, 2011 that included Bezos Expeditions -- the Amazon CEO's personal investment entity -- as well as T. Rowe Price, Morgan Stanley Investment Management and Janus Capital Group.
Bezos, of course, can be none too pleased that a SaaS company he is backing has inked a deal with a rival public cloud player. Bezos Expeditions did not respond to a request for comment as of press time.
The HP-Workday deal, in fact, represents a watershed moment of sorts for HP's public cloud business. First off, it shows that a high-flying startup like Workday, which bills itself as the enterprise cloud for HR and Finance, sees a significant return on investment from making a bet on HP and the HP "enterprise grade" public cloud. Second, it shows that HP has proven its mettle with regard to sucking up data from Amazon Web Services and making it work in a hybrid cloud-like environment. Third, it shows HP's public cloud story is resonating with cloud-based SaaS startups like Workday, a highly profitable Amazon customer base. That's bad news for Amazon.
Workday, interestingly enough, was co-founded by Dave Duffield, one-time PeopleSoft co-founder and former chairman, who knows a thing or two about enterprise software. Duffield built PeopleSoft into an on-premise applications power that was sold to HP rival Oracle. Now Duffield is competing against Oracle with a Software-as-a-Service platform aimed at displacing PeopleSoft. My bet is Duffield sees the writing on the wall with regard to the future of the SaaS model and that future is well beyond Amazon Web Services.
Justin Fielder, the chief technology officer of EasyNet Global Services, a cloud-hosting and integration business that is betting heavily on HP's public cloud infrastructure, said as much at the Discover conference in his endorsement of HP's cloud offerings. "We needed a real big-step change in our ability to deliver to our customers," he said.
HP's services capabilities were critical, said Fielder. "There is continuity," he said of the HP relationship. "The same people that built it are the same people that are running it."
Veghte, for his part, was quick to point to HP's services prowess as a big differentiator. "It is not just log in and go, and if the site has an outage or an issue or a problem there is no one to call," he said. That, by the way, is a not-so-subtle reference to Amazon's infamous release notes providing updates on all issues, resolved or not, on a website rather than through an on-site services team.
"That [website-based contact] is necessary and modestly sufficient in some situations, but it is not sufficient for what you do every single day as you support your users and your businesses," Veghte told Discover attendees. "That is how we [at HP] approach what it means to have a cloud that enterprises rely on."
The differences between HP's cloud offerings and Amazon are stark. The web services marketplace is about to see a step up in class thanks to HP. The Workday deal is just the beginning. HP is just getting started.
A Cloud Services Culture War: Dimension Data Vs. AWS
June 03, 2013
If you were pulling together a business plan to make Amazon Web Services irrelevant to corporate customers, it would be hard to beat Dimension Data's deadly combination of robust end-to-end cloud services combined with multivendor integration skills from a 21,000-strong tech-elite workforce.
The $6 billion CRN Solution Provider 500 global systems integrator, which is looking to double its revenue over the next five years, is doing what every solution provider on the planet should be doing: making big investments to build out its own branded cloud services anchored by its own multivendor systems integration portfolio.
So how fast is the Cisco enterprise partner moving to provide monthly subscription-based offerings within its traditional systems integration legacy business? The South African company on May 7 unveiled a tiered storage services that compares favorably to Amazon Web Services and then, just three days later, acquired managed security services provider Earthwave.
[Related: Dimension Data Joins Amazon, Rackspace With Three-Tiered Cloud Storage]
Both moves are game-changers for the company, which is adding 3,000 new employees a year as it moves to deliver a next-generation consulting/IT outsourcing/managed services portfolio. Think of Dimension Data as the ultimate business solution provider delivering a blend of off -premise, on-premise infrastructure and applications aimed at providing customers maximum performance and competitive advantage.
One big advantage as Dimension Data expands its cloud computing services footprint is the financial muscle of its parent company, Japanese telecommunications giant NTT. To its credit, NTT realized that the company's services culture was what set it apart and has built up, not torn down that culture. NTT has, in fact, provided financial firepower to dramatically increase Dimension Data's services footprint.
Amazon Web Services fancies itself as the "buy-infrastructure-on-your-credit-card" company for the "do-it-yourself" generation. Dimension Data, on the other hand, can provide self-provisioning, but it's a "get-it-done-for-the-customer" company.
The technology products, solutions and services have changed, but Dimension Data's people are what sets the company apart. Case in point: When Hurricane Sandy struck New York last October, Dimension Data was called in to restore voice service for a government agency. Dimension Data rushed into action, providing a critical "link up" that restored service in just two hours. It also was Dimension Data that kept the call centers for the New York Housing Authority up and running with additional capacity when Hurricane Sandy began racing up the coast. The team on that engagement worked 36 hours straight to get the job done.
"You have to have people that are prepared to go the extra mile," said Dimension Data CEO Brett Dawson. "It's not about just technology. It's about people."
It's about people. That's something that Amazon Web Services just does not get as it moves to grow beyond its infrastructure-for-startups heritage. That makes Dimension Data its worst nightmare come true.
BackTalk: Steve Burke writes a monthly opinion column on CRN.com. You can reach him via email at steve.burke@ubm.com.
A Big Data Partner Revolution: Maritz On Vertical Expertise, Education
April 22, 2013
Pivotal CEO Paul Maritz has some good advice for solution providers interested in establishing a beachhead in the big data market.
First and foremost, Maritz says solution providers must understand a specific vertical market segment. That business knowledge, in fact, is at the heart of building the big data services that will drive businesses in the future. It's a natural evolution of the solution provider model in an era where IT decisions and budgets increasingly are being driven by business units rather than IT departments. "You can't just go in and sell raw data capabilities," said Maritz in an exclusive interview with CRN in advance of the formal launch of Pivotal. "It doesn't help to go in and say, 'I can give you some of this big data.' You have to go in and say, 'Here is how you can transform your business by understanding larger and more diverse data sets.' So I would either try to partner with or acquire or develop that [business] expertise and then say, 'OK, how do I use that to pull through [these] underlying [big data] capabilities?' "
Maritz is advising solution providers to get educated on big data. EMC, to its credit, is offering courses on data science and big data analytics for business transformation, available at education.emc.com, to do just that.
[Related: CRN Exclusive: 20 Tough Big Data Questions For Pivotal's Paul Maritz]
Solution providers would be wise to heed Maritz's advice on getting business- and big-data-savvy—that is, if they want to succeed in the future. Big data services and applications are destined to determine new winners and losers in every single business.
What is exciting about the Pivotal initiative is Maritz is driving a big data platform that solution providers will be able to leverage to deliver game-changing business services. It's a far different play than any of the current Web services players, including Amazon, which is far more focused on driving a low-priced commodity platform than building a services platform that effectively becomes the operating system for a new era of big data services.
Amazon may have a strong Web services foothold right now. But my money is on Maritz and company to deliver a big data application services ecosystem that makes Amazon look like small potatoes.
If you want a sign of just what kind of big money there is in big data, look no further than solution provider Think Big Analytics, which has scored $3 million in funding from angel investor and former Cisco executive Daniel Scheinman and venture capital firm WI Harper Group. Not bad for a 50-employee company that is only three years old.
Ron Bodkin, founder and CEO of Think Big Analytics, which is advising companies on how to build and deploy big data applications, says sales have more than doubled each year since he started the business. "It's definitely an exciting time to be in this business," he said. "There is so much to be done. We are really enthusiastic about building our business and being a catalyst for tremendous value creation."
Business value creation is what big data is all about. Those solution providers that get it will thrive. Those that don't will die.
BackTalk: Steve Burke writes a monthly opinion column on CRN.com. You can reach him via email at steve.burke@ubm.com.
PUBLISHED APRIL 22, 2013
- IT-Telecom Convergence: 'All-Inclusive' Offering Changes The Game
- Time To Grow Or Time To Die: Recasting The Solution Provider Business Model
- How Peeved Is Jeff Bezos At HP-Workday Deal?
- A Cloud Services Culture War: Dimension Data Vs. AWS
- A Big Data Partner Revolution: Maritz On Vertical Expertise, Education
- Amazon's Blind Side: The Impact Of Service Outages
- GE Capital Ushers In A New Era Of IT Financing For The Cloud
- Retail Folly: Why Microsoft Surface Losses Will Result In A New Channel Strategy
- The Worst Channel Decision Of 2012
- Do You Have 'Channel Attitude?'
- A Cloud Computing Game-Changer
- HP One Year Later
- HP And EDS: A Tale Of Two Cultures
- A Cloud Storm Ahead
- Steve Ballmer Is Back
- Government Must Leverage Private Sector's Expertise
- Microsoft Partners Left Dazed And Confused
- Change Is In The Air At Apple
- Intermec's Three Channel Tenets
- M&A Madness: It's Not A Game
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