Posted by CRN UK on October 26, 2018:
Resellers that aren’t embracing services and innovating will endure a tough time as market growth cools and more spend moves to the cloud.
That’s the warning of Jim Kavanaugh, CEO of global VAR World Wide Technology (WWT), who caught up with CRN this week during a visit to WWT’s London office in Canary Wharf.
Canalys chief analyst Steve Brazier struck a cautious tone at the analyst’s recent EMEA Channels Forum, warning that industry growth is likely to slow, at least for European channel players.
Asked for a global view, Kavanaugh said he had also picked up on the change in mood.
“What I hear from the general market at times is that the general reseller space is slowing,” he said.
“My own observation is that some of the slowing of the reseller space could be because certain things are moving to the cloud. There is a shift – not a compete shift – of some of the consumption on the infrastructure side.
“But my belief is if you’re not innovating and creating different value propositions and innovative services for your customers, then your business is going to slow down and potentially decline. And I think there will be additional margin pressures on a traditional reseller if they don’t focus on driving some type of innovation and being more focused on a services-led organisation.”
Kavanaugh claimed that $10bn-revenue giant WWT itself has moved well beyond its reseller roots, citing its investment in its Advanced Technology Centre testing lab and Asychrony Labs, a software development firm it acquired in 2015, whose headcount it has since boosted from 225 to 500 thanks partly to a UK hiring spree.
“We believe we are doing some things that are unique to a traditional VAR or SI. We don’t feel a lot of times we should be placed in that sector,” he said.