Generation Y has infiltrated the channel from every angle, shifting how the business of IT is approached from production to consumption. Also called "millennials," some of these young individuals have appeared in droves at the doorsteps of both vendors and VARs, full of ideas and hungry for jobs. Others have launched their own channel companies, challenging solution providers that have been in business for decades. And still others -- startups born in a dorm room or over beers at a bar -- are now multibillion-dollar enterprises and some of solution providers' largest customers or, in some cases, competitors.
In one breath, millennials have been praised for embracing change and propelling innovation. In the next, they have been chastised for undervaluing experience and requiring too many trophies and perks. The rise of this younger generation -- born after 1980 -- has been a source of confusion for a channel steeped in legacy and tradition but constantly striving to be ahead of the rapidly evolving technology curve. Some vendors admit they have not considered the "millennial effect" at all.
Gerard Gibert, CEO of Venture Technologies, a Jackson, Miss.-based solution provider, said to deny the millennials' influence on the channel is to ignore a revolution, one in which "millennials will drive the agenda that is consistent with what [the channel] is preaching and evangelizing in the marketplace." Gibert said the channel's agenda is to move the world's enterprises toward the most groundbreaking technology, despite those skeptics who prefer to stick to tradition.
"In our industry it seems like we are doing something every day we have never done before," Gibert said. The ability to embrace change, according to Gibert, is one of the millennials' most effective tools.
A NEW CHANNEL
Millennials who are succeeding in the channel have used an unstable economy as a launch pad into entrepreneurship.
"When I was getting out of school, a lot of people were ending up at Best Buy selling electronics," said Jesse Miller, CEO of San Francisco-based software startup Attachments.me and a millennial himself.
Miller said his first job out of college was at a software startup called Trans-Lucent Markets. "It was run out of a guy's basement. He hired three people fresh out of school and we got to build their entire product."
From Trans-Lucent, Miller went on to work as a software engineer for a handful of solution providers and for cloud accounting company Freshbooks. For the past three years, however, he has managed his own company, Attachments.me. Miller's company was born out of an idea to better organize, access and archive email attachments. Today, Attachments.me partners with DropBox, SkyBox, Google Drive, Egnyte and others and reported more than 590 percent growth from 2012 to 2013.
For Christopher Sammons, the 25-year-old director of technical sales at BizCarta, a Pittsburgh-based solution provider, the first job he had out of college was running a company he started himself.
"I ran my own company for three years," Sammons said. The company, named Dormzy, operated out of two 50,000-square-foot distribution centers in Columbus, Ohio, and Las Vegas and was an online retailer of nonperishable food, school supplies and more throughout the U.S. In 2011, Sammons led Dormzy to more than $1 million in annual revenue.
According to Sammons, his college education did not necessarily qualify him for an IT position. Rather, a longstanding interest in technology paired with a business education was enough to land him at BizCarta and launch his career in the channel.
Today, BizCarta has shifted its focus to building out its managed services division and Sammons said he hopes to hire 10 to 15 employees for its BizCarta Soloutions branch by the end of this year.
Sammons said one of BizCarta's best channel moves has been to partner with MokaFive, a virtualization and mobile management vendor based in Redwood City, Calif.
"MokaFive is just building out their channel program. With [MokaFive] we are going head on with Fortune 500 companies and we're winning," Sammons said.
A NEW EMPLOYEE
When it comes to hiring in the IT sector, potential employers say a recent graduation date and limited work experience could be a mark in favor of the potential hire, not against.
"This is one of the few industries where you may want someone that is somewhat younger to be involved on an IT endeavor or project than someone more experienced," Venture Technologies' Gibert said. "It's not like choosing a surgeon to operate in a life-or-death situation where you want someone who has done that surgery a hundred times."
Gibert said he generally expects a new hire right out of college to be "more receptive to learning, exploring and change" -- three areas he said are key if a solution provider wants to get ahead of its competitors.
As a millennial hiring millennials, Sammons said he would rather "pay someone less money on a salary base and let them have the opportunity to earn more on commission." Sammons classifies his fellow millennials as "hungry," noting they are "willing to make less money for the opportunity to earn more."
"Kids in their 20s are way smarter now than we were in our 20s," said Pete Koliopoulos, vice president of North American marketing for Arrow Electronics' enterprise computing solutions business, Englewood, Colo. "People are moving faster and can get answers faster. There are tools and technology and knowledge that [millennials] have much closer to their fingertips and they can pick it up. I think it's a great thing."
"They are not afraid to speak their minds, but their ideas aren't always mature," Clifton Steele, owner of Fort Lauderdale, Fla.-based solution provider Biztex, said of his experience with millennial employees. "Everyone wants their own perks, they want to work in teams, they want to work remotely. In previous generations, people did not expect to be catered to."
Steele said that the innovation and energy millennials tend to bring to the table do give the generation an edge, however. On the other hand, Steele finds millennials difficult to manage because of the extra attention they require in order to be content in the workplace.
Attachments.me's Miller said he has a similar experience with young employees, even though he is a millennial. "When we hire someone out of school, we have to make sure we have the resources we need to help them succeed," Miller said.
Miller said one of the best ways to cultivate long-lasting employees out of the millennial generation is to pair them with a mentor. According to Miller, younger employees are generally more excited and accepting of new technology but need the guidance of someone more experienced to keep them from making basic mistakes.
"Younger kids come in with what I call a 'hacker mentality,' " Miller said. "It comes from the nature of school. They are used to completing a project in a set amount of time and then never looking at it after their course is over."
More important than completing a project, according to Miller, is grooming a project. Grooming is a long-term initiative, involving updating, cleaning up, correcting and explaining, something with which millennials tend to have little experience.
"They need to understand how to slow down a little bit and take more time to treat [their job]," Miller said.
Said Gibert: "The most frustrating thing to us in the channel is when we approach customers about new technologies and we get push-back for no other reason than, 'We've always done it this way.' "
Millennials, according to Gibert, are where the push-back stops. Millennial customers embrace new technology, millennial employees drive the think tank for how to reach millennial customers, and millennial solution providers are more willing to be disruptive in the channel.
For good or bad, Gibert said, millennials are nothing if not "fearless."
A NEW CUSTOMER
Vendors and solution providers alike are faced with a new and growing customer base of companies run by the 33-and-younger crowd.
According to Matt Hutchinson, director of sales at San Jose, Calif.-based VoIP vendor 8x8, "Very innovative, new companies are popping up all the time." Hutchinson noted cloud and Software-as-a-Service companies as two startup hotbeds.
"[Startups] want to put their dollars where they can grow their solution versus their infrastructure. Cloud is the best thing in the world for them," Hutchinson said. He also said services around mobility are a major driver in the decision-making of young executives.
"What we are seeing is our partners going to market with small companies that have a good idea," he said. By the second or third round of financing, Hutchinson said small companies and startups are ready to look beyond things like Skype and begin talking with solution providers.
"We are adjusting our marketing and business delivery to cater to a younger generation who want to receive, consume and interact in different ways than older generations," Koliopoulos said.
Koliopoulos said Arrow Electronics is now faced with an IT audience that self-educates before they even enter an engagement.
"You spend less time talking about speeds and feeds and more time talking about return on investment and what you have that will help grow their business," Koliopoulos said.
Millennials are born in the cloud. According to Gibert, they are less likely to be concerned about cloud computing and security around mobility.
"They just don't have opinions rooted in legacy models," Gibert said. "It puts pressure on us in the channel to make sure we are staying a step ahead of them."
Miller said he has noticed a higher appreciation for design among millennial customers. "It's a huge shift, especially in enterprise. It used to be [an enterprise] mentality of, 'This is what we are using; get used to it.' That is no longer accepted."
Miller added businesses are changing their focus to meet higher expectations of end users who are not satisfied with products that do not function at high levels, lack advanced features and are not appealing aesthetically. The bottom line, Miller said, is enterprise executives are taking cues from their employees -- the end users of a device, app or solution -- and buying what those end users want.
Steele said he does not like having to sell to people under 30. "I feel like I'm being window-shopped," Steele said.
Steele, himself a millennial by only a few months, said he puts his heart and soul into preparing and presenting a solution to young customers. In Steele's experience, young business owners have a higher risk of changing their minds at the last minute and choosing another provider.
Channel chiefs of larger vendors seem to be less aware of the effects of a millennial-driven marketplace.
"I haven't really thought about it," said one executive on behalf of Hewlett-Packard. He said so far, millennials have not affected how HP goes to market as it relates to the channel.
Similarly, an executive at VMware downplayed the relevance of millennials on VMWare's strategy. "You hire and develop your own set of millennials. At some point, when the day comes, you want a millennial to reach a millennial," he said.
Hutchinson said it's the forward thinking, born-in-the-cloud companies that are catching on to how millennials are flipping the channel on its head. When it comes to the future of the channel and the advancement of technology, millennials are the drivers. "The millennials just 'get it.' "
PUBLISHED SEPT. 16, 2013