A recent survey shows that things are looking up for IT professionals for 2014. Many IT professionals are forecasting increased budgets as well as increased prospects for growth within their companies. As a result, IT professionals are looking forward to increased investments across the board– from hardware and software to managed IT services and the cloud.
IT Professionals’ Optimism
The survey, performed by vertical IT network Spiceworks in November 2013, took a close look at the spending priorities of 450 North American IT professionals from various small businesses, medium-sized businesses, and major enterprises. Spiceworks also surveyed their views on how their organizations will grow throughout 2014. So far, the survey has reflected plenty of positive optimism among IT professionals for the year ahead. Consider these survey results:
IT professionals plan to invest more than $300,000 on IT products and services for 2014.
Seventy-nine percent of IT professionals projected that their budgets for 2014 would either increase or remain constant compared to last year.
Fifty-seven percent of respondents expect revenues to increase, and 45 percent expect their company to take on new hires.
According to Spiceworks Voice of IT program manager Kathryn Pribish, “Improvements in the North American economy coupled with aging application and hardware infrastructures, such as Windows XP-based environments, are driving IT spending this year.”
Hardware Investments Take Priority
The “2014 State of IT Budget Report” shines an informative light on how IT professionals plan to spend their 2014 IT budget. According to the survey, hardware solutions have earned spending priority among IT professionals: 44 percent of respondents’ IT budgets will be dedicated towards hardware, whereas 31 percent will go towards software products.
Desktops and laptops are high on the list of hardware investments for survey respondents– at 79 percent and 71 percent, respectively. According to the survey, those hardware investments will account for a respective average of 26 percent and 14 percent of their hardware budgets.
Seventy-three percent of respondents also noted their intention to invest in networking solutions, while 69 percent indicated they will invest in new servers. This equipment will make up an average of 19 percent and 13 percent of IT hardware budgets, respectively.
IT Professionals Focus on Software Investments
IT professionals are also looking forward to software investments for 2014. According to the survey, nearly a third of annual IT budgets will be spent on software investments. Sixty-percent of respondents plan on purchasing operating systems and productivity suites as part of their software investments, while 50 percent plan on purchasing virtualization solutions. Software-based security solutions make up 49 percent of planned software investments.
The survey also found that an overwhelming majority of IT professionals plan to upgrade or maintain their existing applications. Nevertheless, of those looking to purchase new software for 2014, 39 percent of IT professionals would likely purchase virtualization software.
Cloud and Managed Services Also Gain Notice
Investments involving cloud and managed services made up a scant 14 and 11 percent of IT budgets, respectively. Unsurprisingly, IT professionals are staying the course by supporting existing services and infrastructure. Nevertheless, 32 percent expressed interest in purchasing new cloud-based productivity solutions, while 53 percent plan on purchasing connectivity and bandwidth services.
Overall, the survey’s overall outlook for IT professionals is exceptionally positive for 2014. As respondents begin their year on a relatively good note, it remains to be seen if they’ll be any unforeseen events that could shake this confidence.
The road to taking a product from the manufacturer to the customer is a long one. Manufacturers can’t sacrifice precious time and resources to scour a widening market for every prospective buyer of their products. Similarly, customers find it difficult to get to know every product or manufacturer. Added to that are the nuances that go with buying in an increasingly confusing IT marketplace. This is where VARs come in, bringing together the manufacturer and the customer.
VAR as the Perfect Go-between
In the world of telecommunications, details are often highly technical to the ordinary consumer. Since manufacturers are chiefly concerned with creating products, they don’t have enough time to reach out to each potential end-user or to have special solutions for every customer’s individual requirements. The next best thing to do is partner with VAR companies that can help provide added value to their products. In the process, manufacturers not only get to enjoy a welcome improvement to their products, but they also have the opportunity to expand their market as well by getting into the VAR’s customer base.
VAR partnering likewise establishes a solid connection between manufacturers and customers, where customers have easier access to product information and the producers of these products while satisfying their own needs. It is a win-win solution for all parties: the manufacturer, the VAR, and the customer.
Why Manufacturers and Customers Rely on VARs
Manufacturers can have more time creating products and improving their quality; meanwhile, VARs handle promotion, placement, and other marketing activities. Product relevance, product quality, and pricing are the main concerns of manufacturers, but marketing is equally crucial in order to turn their products into dollars. Manufacturers simply don’t have the time to sell directly to customers; they need VARs as sales partners.
On the other hand, customers are continuously looking for quality and cost-effective products. Often, they don’t have access to important product knowledge such as design, features, packaging, convenience, licensing, related services, and, most importantly, cost. VARs can help customers craft the best buying strategy and recommend solutions that meet their specific needs.
With VARs, manufacturers can be freed from building and maintaining a costly sales team while customers can have access to information abuot the products they need to buy. It is time that manufacturers and customers alike take advantage of the VAR advantage.
We all saw the now infamous post-game interview this past Sunday.A talented Richard Sherman, who had just made an outstanding football play to win the NFC championship, ripped the very competitor he was battling with seconds before.Twitter exploded with disgust and anger and general “WTF was he thinking”? He had an opportunity to praise a worthy opponent, to celebrate a remarkable game, to thank his teammates who all played a critical part in this greatest of all team sports.Instead he trashed the other guy and immediately lost the respect of millions.
We all work in a highly competitive environment.In fact, competition is foundational to this great country we all call home.We ask every day, how do we beat the other guy?How do we get smarter, faster, better, bigger than the guy we’re battling every day?
At Intelisys, we know exactly who our competition is, and yes, we talk every day about how we can beat them and how we can win.But it’s also accurate to say that we hold our competition in high regard.In our industry, along with fierce competition, there is mutual respect and admiration.We all appreciate how hard it is to do what we do.None of us have gotten where we’re at by dumb luck, or having something handed to us.We all battle every day in a free market that is big enough for all of us to be wildly successful.
I always look forward to our industry events where we get to catch up, swap war stories over some brown liquor, and learn from each other about how we can build a healthier and more effective channel.
Its always fun to see our competition show up at our trainings and drinking our booze and dancing at our parties.We welcome them with open arms. Could we lock them out, blast them in the media, tear them down in order to build us up?Sure, we could. But we choose the opposite path, knowing that while we’ll enter the arena to battle each other time and time again, we’ll always do it as respected peers.
Where we could easily be Richards, we choose to be leaders.And that’s a refreshing take on competition.
Most software companies opt to sell their products indirectly, utilizing a channel of resellers rather than going to the end customer on their own. In the industry, channel refers to individual companies that handle the different roles and obligations that occur while bringing a piece of software to direct customers. "Channel" itself is a broad term; a channel might just resell the software; it might deal with system integration; it could offer solution development; or it could provide training, support, consulting, project management, and customization. What all channels have in common is that they are an independent contractor, each of which operates in its own name, assuming its own expenses and risk.
While most software companies vend through channels, some find they are better off going to the market directly. How can a company determine what is right for them?
Reasons to Partner
The biggest reason most companies choose channels is because of scalability. However, there are many other reasons to go indirect; here are a few:
An appropriate channel exists.
An established customer base speeds up market access.
A reseller may improve the product and increase the reachable market.
Channels with experience in or based in a foreign region can usually reach its market faster, due to a lack of cultural and language barriers.
Indirect sales mean a smaller staff, less management, and a smaller investment.
Reasons to Sell Directly
Again, scalability is one of the largest concerns, but some of the reasons a company might choose to sell directly include these:
No channel currently exists for the software type.
Resellers are not interested in the business opportunity provided.
Customers see no benefit from or may refuse delivery through the channel.
Unprofessional channel performance can damage company reputation.
Lost gross margin.
Loss of market and data control.
The learning curve is too steep for the channel to hit the market quickly or effectively.
Making the Decision
Simple and well-known software that needs few auxiliary services are usually sold directly. Extremely complex products that require a lot of implementation and generate long sales cycles are also sold directly. Anything in between utilizes channels.
Remember that choosing to sell indirectly has a significant impact on the customer value proposition. A properly working company/channel relationship adds value, whether it’s extending market reach, easing access, or enhancing the product. If CVP (customer value proposition) isn’t increased, a company is better off selling directly.
Cloud computing and telecommuting are natural partners. With 34 million Americans already working from home at least part of the time and up to 63 million likely to do it in 2016, central offices are becoming less and less important. When employees don’t go to work, storing data in the cloud makes sense–and it also brings real benefits to the organizations that leverage it.
Companies still need infrastructure for their employees, but they aren’t providing it in a single centralized place anymore. With the cloud, a company still gives a remote worker access to data, applications, security, unified communications, and a connection to the company. However, it shifts the challenge and the cost of maintaining it to the ISP (Internet service provider) that the worker uses and to the cloud service provider that the company retains.
While telecommuting makes anywhere access a necessity, it isn’t the only time that companies need to have it. Offering business services everywhere also serves traveling executives, sales teams, and employees that work at customer sites.
Cloud computing also provides the same business continuity benefits as having a distributed workforce. In the event of a natural disaster or traffic issue, site-based companies could end up being shut down because their workers can’t get to them. Workers who don’t commute, though, don’t have to miss work. The cloud does the same thing for computing resources. Since cloud services get maintained by someone with greater resources for data and system protection, cloud services are more likely to stay online.
The cost structure for cloud computing also dovetails nicely with the nature of managing a telecommute-heavy organization. Companies with fewer facilities and fewer on-site workers have lower fixed cost structures and are able to avoid expensive capital expenditures to configure or purchase space. Cloud computing also allows companies to get access to the services and applications that they need without purchasing software licenses, servers, or data center space. Instead, the company pays only for what it needs and uses.
As companies continue to move into the virtual workplace era, piecemeal cloud transitions are also becoming obsolete. When a company moves the nature of its work to a cloud-like physical setting, transitioning as many of its IT processes and services into the cloud is the best way to keep its technology aligned with its workforce and its business.
Vertical markets represent a significant opportunity for telecom providers. Instead of just offering a single service — like mobile connectivity, bandwidth, or voice service — many telecom providers can offer complete packages that cover a company’s full set of communication needs and that touch on other verticals. While the packages are made up of individual products, the services and consulting that glue them together are what makes the difference for many end users.
In the old model, telecom companies competed on the basis of service and price. When a company needed a mobile communications service, it would traditionally shop handsets to find the right model and manufacturer at the right price. Next, it would look for a wireless connectivity provider and shop between them on the basis of service and price.
Telecom companies can go much farther than this. By becoming a communications partner for their customers, they are in a position to not only help their customers get better services at better prices but also to offer a better product. For example, a telecom equipment provider might help a company design a product network that uses its chips, switches, and devices. At the same time, it also brings in companies to provide the connectivity and other firms that install and configure the computer equipment at the company’s offices, letting them take advantage of the new data.
In this model, the company’s "main" product (equipment) is a small part of the overall scope of the project. Nevertheless, by adding consulting services, the company is able to sell its products, gain increased customer loyalty, and have the opportunity to potentially earn a piece of the other parts of the contract. The customer benefits, too, since the customer gets a single point of contact that helps throughout the process of getting the technology up and running.
As communications, technology, and other products converge, the line between telecom service providers and other types of vendors blur. While it’s rapidly becoming a given that services and equipment can be purchased together, going to the next step and adding in consulting services that cover related verticals creates a new set of opportunities for telecom providers.