Digital transformation is everywhere today with worldwide spending forecast to reach $1.7 trillion by the end of 2019, a 47 per cent increase over 2017. Yet the gap between those leading the way and industry laggards is reportedly growing. This should be great news for the channel as it represents a clear opportunity to lift these firms out of a “digital impasse” and set them on the path to success.
With the right approach, resellers and distributors can support a growing demand for cybersecurity solutions and “as-a-service” offerings to help organisations achieve their digital transformation goals. Yet first they may have to overcome some challenges of their own.
Digital means risk
Digital transformation is no longer a preserve of the early adopters, it’s fast becoming an essential to stay competitive as a modern business. It’s all about driving growth through greater agility, innovation and responsiveness to changing market demands, whilst promoting the organisation as an attractive, environmentally friendly place to work. Digital transformation involves more than simply adopting new technology, of course — process and cultural change are usually also necessary within participating organisations. Yet technology plays a huge role: everything from cloud and mobile to IoT, AI, big data and social platforms.
Digital transformation means heavy investments in new infrastructure and services, and will demand these be matched by spending on cybersecurity. The new digital-centric world creates new cyber risk that must be managed. Think about complex multi-cloud systems, for example. The blend of on-premise and public cloud from multiple vendors, can create security gaps if not managed correctly. Cloud-ready security must be pushed further into the datacentre, potentially as-a-service.
But security also need to be plugged in at every other layer, especially the endpoint, where an explosion in IoT devices threatens to overwhelm security teams by increasing the corporate attacks surface exponentially. According to Gartner there were 8.4 billion connected things in operation last year, with over four billion in the enterprise.
A huge opportunity
Cybersecurity has therefore become a vital pre-requisite for digital transformation. It’s even mandated in regulations like the GDPR, which states that organisations must wrap it into everything they do, in what is termed: “data protection by design and by default”. There’s a huge appetite not only for security solutions themselves but also help and advice from trusted partners, which smart channel players are already capitalising on.
Many end user organisations, for example, may not fully appreciate the extent of their responsibilities for security in the cloud, and how these can vary according to which model they deploy. It’s an important area to get right, especially as the GDPR will not allow any organisation to outsource accountability in the event of a breach. This is where resellers can really help end customers by becoming trusted cloud advisors, adding value with extra security services when necessary to support transformation projects.
A difficult transition
However, not everyone is grasping the opportunity. Market analyst CONTEXT’s latest annual ChannelWatch report claims that more than half (58 per cent) of respondents had not sold any cloud services in the past six months — a trend repeated across most of Europe. Ironically, security (42 per cent) was given as the biggest barrier, when it should be seen as a major opportunity.
Part of these fears may stem from the lack of in-house knowledge and resource which afflicts many resellers. As we’ve discussed in the past, Europe is facing a projected shortfall of skilled cybersecurity professionals of 350,000 by 2022 and the channel is certainly not insulated from this shortage.
However, there are other reasons why the channel may have historically been slow to tap the opportunities presented by digital transformation. Many boil down to the practicalities involved in selling “as-a-service” offerings. In the past, things were more straightforward. Resellers sold physical kit and it was easy to dole out commission to sales staff. Now a sales manager might see their order split into 36 if it’s a three-year deal. Of course, once recurring sales have built up this ceases to become a major issue. But it can make the transition from a CapEx to a service-based model tricky to begin with.
Similarly, the reseller itself may find it challenging to transform part or all of its business into effectively that of a service provider. How do they manage the billing? What are the cashflow implications? There are a number of business complexities which can become a barrier to digital adoption.
Help at hand
The good news is that help is available for those resellers ambitious enough to make the leap. Distributors can provide financial assistance in terms of leasing out infrastructure, and some like Tech Data may even offer online Cloud marketplaces which allow partners to buy and sell software and applications as-a-service. They take care of all the tricky back-end operational stuff so the channel partner can focus on growth and value-add.
Distributors are also here to help either train up reseller teams to build that important in-house resource, or ‘plug the skills gaps’ and provide outsourced expertise.
There may even by out-of-the-box packages available to help resellers set-up new business practices in fast-growing areas like GDPR compliance, ransomware protection or IoT security.
Resellers can’t expect to be experts in everything. But with the right partnerships and cybersecurity focus they can ride a wave of digital transformation across Europe which will benefit everyone.
David Ellis, VP, Security and Mobility Solutions, Tech Data
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