Tech Data is urging solution providers to adopt four key technologies they traditionally have eschewed as a bridge to cloud computing, reminding them that customers are going to get those technologies from competitors if the VARs don't act quickly enough.
The push to get solution providers to get active with consumer electronics, mobility, software, and data center technologies, and in the process becoming a customer's partner in cloud adoption, is a key theme of Tech Data's Channel Link conference, held this week in Los Angeles.
The cloud represents a tremendous opportunity for Tech Data, said Bob Dutkowsky, CEO of Tech Data.
"It's not something we're afraid of," Dutkowsky said. "We're mobilized for the cloud. We've spent millions of dollars on the cloud, and will spend millions of dollars more."
Tech Data's message about adopting consumer electronics and mobility for the cloud strikes at the heart of what solution providers should be doing, said Joseph Ebneyamin, systems analyst and co-owner of C A Computer Systems, a Los Angeles-based solution provider focuses on the accounting software market.
C A Computer Systems has been looking at how to meet the increasing need for mobile access of its customers for the last year, and two weeks ago started coding mobile access into its software user interface, Ebneyamin said.
The move was pushed by the fact that increased mobility has made it easier for customers' sales and services personnel to get the information they need from their software, Ebneyamin said.
"I'm moving to adopt mobility already," he said. "But I'm glad to hear the Tech Data message. It confirms what I'm doing. If a company like Tech Data is doing this, I know I'm going in the right direction."
Dutkowsky said Tech Data's main business today remains the broadline traditional servers, networking, and other products that were best sellers ten years ago, and accounts for about $10 billion of his company's revenue every year.
However, he said, solution providers should focus on four new key areas which typically have not been on their radars as a way to capture future customer opportunities.
The first, and the least complex, of those four areas is consumer electronics, which has already become a $2 billion-plus business for Tech Data.
Dutkowsky said to consider the convergence between consumer and business technology currently happening, such as how the smart phone has become a central part of users personal and business lives. "The lines have been completely blurred. . . . That convergence is going to touch all of us," he said. "And it's going to radically change how we do business."
The second key focus for solution providers is mobility, which is also a $2 billion-plus business for Tech Data, Dutkowsky said.
Mobility has become a part of the business equation for every solution provider, whether they realize it or not, because of the business potential from all the applications required by users, he said. "For every 600 cell phones sold, the world will consume another server," he said. "For every 180 tablet PCs sold, the world will consume another server."
The third area on which solution providers should focus is software, which Dutkowsky called a $4 billion-plus business for Tech Data. Software is probably the most difficult business environment for resellers because of the difficulties of managing customer licenses and updates, but as VARs' businesses migrate away from product sales to solutions, software will be at the center, he said.
Next: Making An Impact On The Cloud For VARs
The fourth area of focus for solution providers going forward is the data center, especially networking and security, which for Tech Data has become a $6 billion-plus business in only five years, Dutkowsky said.
Those four areas are where the bulk of innovation is being done today, Dutkowsky said. "If you partner with us, I believe in the next five to ten years we won't be caught flat-footed by innovation," he said.
The biggest example of the impact those four areas of focus will make is in the cloud, Dutkowsky said.
"If you're not involved in consumer electronics, what are you going to attach to the cloud?" he said. "If you're not involved in mobility, how are you going to connect to the cloud? If you partner with us, we'll make sure you are ready for the cloud."
After his keynote presentation, Dutkowsky told CRN that he does not see the cloud as a unique departure from the computing continuum, but instead is a part of a slowly evolving process.
"With every generation of new technology, people think the older technology will disappear," he said. "Well, guess what? IBM last quarter has its best mainframe sales quarter ever."
Client devices can be seen in a similar vein, Dutkowsky said.
"Everybody says the tablet will replace the PC," he said. "I don't think so. PCs are built for specific purposes. When the market moves to providing more and more content, the PC is not the ideal platform. It's bulky to carry around. But try to watch a movie on a smart phone. It's too small. So there are tablets. Customers will need all three types of devices."
Furthermore, customers will continue to use cloud-based applications and "ground-based" applications, Dutkowsky said. "My daughter runs a small retail store," he said. "She runs her business on the ground, but her backups are done in the cloud."
Much of the investment in the cloud is still on the hardware side, giving solution providers many opportunities to help customers, Dutkowsky said. For instance, he said, 18 months ago there was no iPad, but now it's ubiquitous.
"That's hardware connecting to the cloud," he said. "Or look at Google buying Motorola. That's all hardware. The world needs hardware to deliver content and performance. You will still need devices to manage and deliver the content."
Twenty years ago, the tech agenda was set by the office, Dutkowsky said. "Now the agenda is set by the customer," he said. That's why it's so important for a company like us to be in consumer electronics."
Tech Data and Dutkowsky are showing that distribution is ready for the future, said John Convery, executive vice president of vendor relations and marketing at Denali Advanced Integration, a Redmond, Wash.-based solution provider working with Tech Data and other distributors.
"As the industry is changing, they're changing with it," Convery said. "A VAR like Denali has a small team. To scale, we have to leverage distribution. Tech Data is looking at the key trends and making the investments needed to support us. All distributors are positioning themselves this way."