In the computer business in the UK, a channel is a path through which products and services are delivered to customers. This path can involve various intermediaries, such as wholesalers, distributors, resellers, and retailers, who play a crucial role in bridging the gap between manufacturers and end-users.
Tag: channel
Cisco abandons direct sales
Networking giant Cisco said it will move away from direct sales by the end of 2020 and export its entire product portfolio on a subscription basis.
The outfit claims it will make cost savings of $1 billion per year, including its core networking hardware portfolio.
The company said it will accelerate its transition of the majority of its portfolio to an ‘as a service’ distribution model, with a view to shifting the majority of its products away from direct sales by the end of the calendar year.
CEO Chuck Robbins, speaking to investors in the wake of fairly disappointing quarterly financial results, said that Cisco plans to accelerate its investments in key strategic areas including cloud security, cloud collaboration, increased automation in the enterprise, as well as application insights and analytics.
Only a third hitting channel sales targets
Only a third of vendors are hitting or exceeding their channel sales targets.
Beancounters at Investec have been asking around and found that just over half of vendors are frustrated with missing sales targets.
Channel becoming more customer centric
Agilitas IT Solutions has discovered that the channel is getting the message and becoming more customer-centric.
Agilitas research has found the majority of channel firms have understood the need to adopt that approach with 86 percent registering the need to relevant moving to a customer-centric model.
The firm has been looking into the current market landscape in its Channel in 2020 Relevance report and found that
Lenovo pulls up its channel socks
At a keynote speech at the Canalys Channel Forum yesterday, analyst-in-chief Steve Brazier said Lenovo had a poor set of tools for its partners and made decisions too slowly.
But senior executives at Lenovo told ChannelEye this morning that it’s already taken significant steps to turn that position round.
Lenovo said it recognised its tools and processes weren’t perfect, but said it had been investing and making improvements. It’s committed to speeding up the way it works with resellers and investing money to improve the matter.
“We’re turning things round – we need a more sophisticated way of helping the channel.”
Lenovo recognised that it’s a big investment that it has to undertake. It’s been working on the project for 12 months.
“We have further to go but we are making progress. We [now] have the ability to give split second decisions on deals and on pricing.”
It claimed it was getting good feedback from its distributors and channel partners on the improvements it’s already made.
It recognises that it needed to be more collaborative at sharing material with partners and need to be more agile and have a bespoke method of getting its product message tailored to the customers that they’re pitching to.
* The company said it is likely to be protected in the event of a continuing trade war between the US and China. It has a factory in China but also in other territories and has the ability to switch production if it needs to.
Red Hat’s channel revenue gets boost
Open saucy specialist Red Hat has said that at the end of its first quarter three-quarters of its services business is going through the channel
Red Hat’s channel business has continued to grow with the open source specialist reporting increases in indirect revenues.
The firm reported that 75 percent of its business now goes through the channel as of its fiscal Q1, which was up from 72 percent a year earlier.
The vendor issued its first-quarter numbers, for the three months ended 31 May, giving investors the mixed bag of a Q1 with a 20 percent revenue increase to $814 million.
The results show that Red Hat is a bit worried about the rest of the year because of exchange rate issues.
Red Hat executive vice president and CFO Eric Shander said: “We are focused on building our strategic partnerships within our mid-market customers. In Q1, our mid-market deals greater than $250,000 increased 138% year-over-year from 21 deals to 50 deals, with notable growth in Ansible and OpenShift.”
Channel firms dominante 2017 infrastructure shipments
Beancounters at Canalys have added up some numbers and divided them by the flight ration of a swallow carrying a coconut and reached the conclusion that channel firms dominated 2017 infrastructure 
sments worldwide and boosted the market to a record year.
The analyst outfit said that the market was worth $142 billion this year which is a seven percent increase on 2016. Servers grew 12.2 percent to $66 billion; networking grew 4.3 percent to $50 billion and storage 1.6 percent to $26 billion. .
Canalys principal analyst Matthew Ball said the channel continued to dominate infrastructure shipments, collectively representing 74 percent of the worldwide total.
Server growth was partially due to hyperscale cloud service providers’ “ongoing” datacentre expansion, Canalys’ announcement said. It noted: “The start of a new enterprise refresh cycle following the launch of the next generation of Intel and AMD processors increased server shipment value.”
The growth of Chinese and Taiwanese ODM server vendors selling large volumes to cloud service providers meant that direct sales grew faster than channel sales in the overall infrastructure market. Ball said that 34 percent of server shipments were direct sales (compared to 19 percent of storage and 20 percent of networking shipments).
“The massive CapEx planned by the data centre cloud service providers in upgrading and expanding existing data centres, as well as increasing their geographic presence, will maintain this trend in 2018”, Ball said.
Storage, meanwhile, saw a return to growth following “a period of disruption” from all-flash and software-defined, which Canalys says offset traditional HDD storage arrays’ drop.
Canalys highlighted the strength of datacenter switching and 11ac Wave 2 wireless LANs (WLANs) for campus and branch environments. It says ethernet switching grew seven percent and WLANs nine percent. Service provider routing stayed positive at one percent, while enterprise routing fell nine percent.
Cisco, Dell EMC and Hewlett Packard Enterprise (HPE) represented 50 percent of infrastructure shipments Cisco maintained a 20 percent lead thanks to its networking strength. Dell EMC grew its infrastructure shipments market share to 15 percent and “was one of the fastest-growing vendors through the channel”, Ball said. HPE controlled 14 percent market share.
Amazon plots New Year partner revamp
Amazon Web Services (AWS) is planning a New-Year revamp of its channel partner programme.
The big idea is to promise incentives for resellers which commit to specialising in its core cloud technologies.
Terry Wise, vice president of worldwide alliances, channels and ecosystems at AWS, told the assembled throngs at the AWS Partner Summit keynote at the cloud giant’s annual user and partner conference, Re:Invent, in Las Vegas, that the AWS Channel Reseller Programme will get a full rebrand in 2018.
It will be renamed the AWS Solutions Provider Programme, and will feature beefed-up benefits and support for partners, Wise said.
“What customers are telling us is they want AWS to actually recognise and incentivise a set of partners that provide more of the specialised services”, he said.
The bookseller will use a tiered incentive structure for its new-look partner programme, with resellers specialising in managed services, cloud migrations, DevOps and other areas set to reap bigger rewards.
“Further incentives and investments in partners working with us on the front end to bring net new opportunities to the AWS cloud are coming”, Wise continued.
Furthermore, resellers who go above and beyond from a customer support perspective will also have their efforts recognised via the programme, he added.
“We’re going to make changes in the support model by recognising our reseller partners (who provide a great high-quality support experience) with a different economic model, and a much more flexible way in which you can offer support to our mutual customers”, Wise said.
“Collectively, these areas are going to give our channel partners the opportunity to substantially improve the profitability of their business.”
More details will arrive early in 2018.
Channel wins from AMD push
Moor Insights and Strategy principal analyst Patrick Moorhead, says that the channel will be the winner from AMD’s push into the PC and server chip markets.
Moorhead said that the move will give channel partners more options for meeting growing OEM and customer demand for silicon supplier alternatives to Chipzilla. System makers and businesses have been wanting more choice when it comes to processor vendors. The thought is that more competition will accelerate innovation and drive down prices.
AMD’s upcoming chips should give them options in important segments of the PC and servers spaces, which will be a boon for partners, Moorhead said.
“AMD-powered PCs and servers bring more choice to the channel and, in some circumstances, differentiation for the channels who assort it. Ryzen Threadripper [for PCs] and EPYC [for servers] are unique in very highly threaded environments and EPYC in single-socket systems.”
Intel has long been the dominant player in both PCs and servers, with market shares of 90 percent.
ARM and IBM through its OpenPower efforts are also making a push for a greater presence in the server space, although this is of limited impact.
An AMD meeting with financial analysts unveiled more details about the company’s upcoming Threadripper and EPYC processors – as well as next-generation Vega Frontier GPUs for workstations – giving the industry greater hope for more competition in the chip market and a boost to the somewhat stagnant PC and server markets.
Threadripper is a high-end PC chip with 16 cores and 32 threads and scheduled for release this summer.
Meanwhile AMD is bring in Ryzen processors aimed at systems like 2-in-1s and gaming desktops, as well as low-end systems, which are due out later in the year and are based on the Zen microarchitecture.
AMD has also announced EPYC, codenamed “Naples” and based on Zen and that will offer up to 32 cores and 64 threads with bulked-up capabilities around interconnect and memory. It could also help reduce costs for large enterprises and cloud datacenters by enabling a single-socket EPYC server to potentially replace a two-socket system powered by Intel Xeons.
We are expecting to see more details at the Computex 2017 show next week in Taiwan.
Moorhead was confident Threadripper will do well in both OEMs and the channel.
“AMD announced that the Ryzen desktop [chip] would be in the top five desktop OEMs by the end of June, and I have seen models already from Lenovo, Acer and Asus. EPYC is newer, and I’m interested in seeing third-party testing. Intel has 99 percent share in servers, so there is a strong desire to have an alternative,” he said.
“The channel should take advantage of all the channel training AMD has available and also trial the products to get up to speed with how they work, Technical training is the fairest priority, followed by go-to-market training.”
The channel should use market development funds from both AMD and OEM, he added.
Channel is now cloud-ready
Ingram Micro’s UK Cloud Summit was told that the channel has understood the opportunities that cloud can deliver.
The Summit was told that while the Channel was slow most now accept that the cloud is an unstoppable force changing business and their approach to the market.
Ingram Micro’s UK Cloud Summit heard from the distributor and vendors about the trends in the market.
Ingram Micro director of cloud & software UK&I Apay Obang-Oyway said that it was one of the first times that he had seen that the Channel has got the message and people were nodding their heads.
He cited Blockbuster, which failed to spot the streaming revolution until it was too late, as an example of the risks of not adapting to change.
“A lot of CEOs are petrified of being Blockbusted. A lot of partners can see the changes.”
He said the industry was at the start of the fourth industrial revolution and technologies including IoT, big data, social and cloud were driving those changes.
“While it is all very good and exciting it is bringing a lot of disruption, which you can look at negatively or positively. Within that there is a load of opportunity for channel partners but you have to understand this is a different reality and it is no longer business as usual, its business unusual. The opportunity is huge and represents significant numbers,” he added.
Snow goes to channel first approach
Snow Software has announced it is setting up a channel-first policy to make sure all sales happen with partners.
Snow is a Software Asset Management outfit and it expects a channel will help it meet growing demand for software asset management support.
A SAM skills shortage is looming and as a result customers will be leaning more on partners to make sure they can help them plug the expertise gap.
To support the increased channel focus the firm has launched a partner portal, updated its programmes with more emphasis on joint marketing opportunities.
The company said that it will make sure the channel can perform the function customers will be looking for the vendor is encouraging partners to use its training facilities with the Snow Academy, which is an online learning platform.
Urban Bucht, global vice president partners at Snow Software announced that he will be developing partner relationships and he will be bringing on new partners to provide greater reach in the market.
Intexit McAfee looks to channel for new life
Having escaped Intel’s clutches, security outfit McAfee is looking to its channel to provide it with a way forward.
Intel bought McAfee for $7.7 billion back in 2010 and announced last September that it had agreed to sell its stake to TPG Capital for $4.2 billion. Thoma Bravo has also become an investor through an agreement with TPG and former Intel Security general manager Christopher Young has been named McAfee CEO.
McAfee is sticking with a current partner programme that runs through until 2018 along with its existing product plans.
But the outfit is claiming that the “new” McAfee will be reacting differently to threats and creating more opportunity for its channel partners.
The firm has a well-established and loyal channel and a brand that is already well known by partners and customers.
Young indicated what could lie ahead saying that as a standalone company with a clear purpose, McAfee gains the agility to unite people, technology and organisations against our common adversaries and ensure our technology-driven future is safe.
Europeans will lean on tech
Good news for the channel as research from Ricoh Europe suggests that companies want to lean more on technology to improve their fortunes.
While the world is feeling rather uncertain at the moment, many feel that the way the work will change in the near future as a result of digital disruption, economic uncertainty and political turbulence.
More than 95 percent of people thought their business would benefit from the changes.
Most people that were asked for their opinions by Ricoh saw technology as the best way of making sure they could improve the fortunes of their business. On the wish list were using IT to improve customer communications, increased productivity and simpler business processes.
The weak point was that most felt that there will be even more of a scramble for skilled staff.
Ricoh Europe CEO David Mills said: “How people relate to, engage and execute their work is fundamentally changing. In the years ahead we’ll see businesses fall into two distinct camps. Firstly, those with strong fundamental processes which empower employees by enabling them to do their best work, adapt and thrive. Secondly, those businesses which shy away from change and unfortunately set their employees up for failure.”
“As the world feels the impact of unprecedented change, business leaders must ask themselves where they see the most beneficial return on bringing more innovative technology into the company. To enable their business to stay focused on its long-term goals, and remain competitive, often the best place to start is with their employees,” he added.
Resellers are being bombarded with advice from vendors to get more involved in the trend.
Softcat gets the cream
Channel outfit Softcat is reporting some rather good figures for its first public full year.
The channel player reporting strong results and a £28m special dividend. The firm saw a 12.8 percent increase in revenues to £672.3m and gross profit coming in at 17.5 percent up on last year at £120.7 for the year ended 31 July. That gross profit number was helped by a one-off procurement saving of £3.4m.
Softcat saw a 7.5 percent increase in customer numbers and increasd its staff by 21 per cent to support its growth plans.
The channel outfit went public in November last year and the share price has consistently outperformed the initial valuation.
Martin Hellawell, Softcat CEO, said that the last financial year had seen it open an office in Glasgow, add 133 to the workforce and pick up a clutch of best partner awards from leading vendors.
“We are pleased to report continued strong organic growth at Softcat with 12.8 per cent revenue growth, 17.5 per cent growth in gross profit and 15.2 per cent growth in adjusted operating profit, achieved against a backdrop of very modest growth in the UK economy which has equally been reflected in the IT market,” he said.
“We have continued to win large numbers of new customers and earn increased spend from our existing customers. This has been achieved by our relentless focus on customer service, which is in turn driven by an excellent and engaged team of people at Softcat,” he added.
UK’s tech channel bewildered over Brexit
The UK’s tech channel is in a panic this morning as its managers try to get their head around Friday’s Brexit decision.
Gartner has forecast that Britain’s tech buyers will now stop spending in 2016 and 2017, turning earlier growth numbers negative and the industry will fall into recession. There is also a fear of the cost of hiring EU workers, taxes and tariffs which is enough to send the industry into a tail spin.
Still at least we won’t have those nasty foreigners telling us what to do, we can just sit around muttering there will always be an England as the French start turning off the power.
Most of the tech companies have said that they needed Brexit like a hole in the head and are wondering how they can recover their position. Basically the issue is that global business value chains are more integrated, while Brexit envisages a market which was out of date 40 years ago with Britannia ruling the waves.
SAP has said that things might be alright if the country pulls finger quick and makes its escape as fast as possible.
However, outfits like Alfresco Software moan about the huge uncertainties which gets more than half its business from the EU.
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