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Is bimodal IT the future of the channel?

Speakers at CompTIA's ChannelCon 2015 said channel partners will increasingly face the need to balance legacy business and new digital platforms.

CHICAGO -- In CIO circles, bimodal IT has been a conversation starter: How can an enterprise's information leadership balance the necessity of keeping the lights on against the challenge of adopting emerging, business-changing technologies?

That same discussion is now surfacing in the channel. Speakers at this week's CompTIA ChannelCon 2015 here suggested the possibility of partners becoming bimodal and the difficulty involved in doing so. This struggle can be seen in the cloud as MSPs and other solutions providers attempt to meld "as-a-service" offerings  with their existing business lines. But channel partners also have a decision to make regarding the adoption of other digital transformation technologies: mobile, social and big data, for instance.

Projected customer spending patterns suggest partners should begin cultivating those promising technologies. Practicality and the psychology of previous investment suggest they should also remain engaged in their traditional practice areas.

Kevin Murai, president and CEO of Synnex Corp. and Wednesday's keynote speaker, suggested partners should indeed attempt to cover both bases. Murai cited IDC research to make his point: What IDC describes as second-platform technology, essentially PCs and client-server architecture, will represent 57% of the total IT spend by 2020, while third-platform technology -- cloud, social, mobile and big data -- will soak up 43% of the spend. He said it's his understanding that IDC may upwardly revise the third platform's share of the market.

"Don't forget that legacy is still a big piece of where the IT spend is," Murai advised. "But the growth is going to be in the third platform."

In light of that expansion, he said partners should direct their investment dollars to sectors such as cloud, big data analytics, social media and mobile.

Bimodal IT strategy: Two speeds

Tiffani Bova, vice president and distinguished analyst at Gartner, said partners -- along with their customers and vendor allies -- are running at two speeds. She compared mode one -- keeping the lights on, managing long-term projects, pursuing waterfall deployments -- as running a marathon. Mode two, meanwhile, calls for innovation as partners deliver products and services in new ways and to non-traditional customers such as line-of-business managers. Bova said mode two is a sprint, noting that organizations experience a conflict between mode two and mode one.

"They don't know how to run a bimodal organization," she said. "They struggle to do both at the same time."

Bova suggested that channel companies will face discomfort as they straddle two ways of doing business.

"Mode one is where we are very comfortable," she said. "The traditional channel is not as comfortable" with mode two.

But partners that fail to pursue mode two, the path to digital business platforms such as mobile, social and cloud, could be looking at a shrinking market.

Bova said companies that completely ignore the cloud, which she said is pervasively making its way into the small and medium-sized business (SMB) market, can tap only 40% of the market opportunity.

"I still have opportunities in front of me, but the size of the pie is getting smaller and smaller," she said of such companies.

Murai also noted the cloud's importance.

Murai said cloud uptake has been relatively slow in certain market segments such as SMB, but added that adoption in that segment is accelerating.

"We have had time to figure out how to adjust our business to the cloud, but that change will accelerate at a more rapid pace going forward," he said.

Advice for the third platform

Murai offered some advice for partners considering a transition to the expanding third-platform technologies. For starters, a company needs to have an understanding of what is happening in the market today and what the market will look like in three years. With that knowledge, the partner can adjust its business model to take advantage of opportunities and mitigate risk, he said.

In addition, a channel partner must get a handle on its competitive position. Fifteen years ago, most channel companies had similar business models, Murai noted. That's no longer the case, however.

"The challenge today is there are new entrants to the market," Murai said. "Your competitors don't look like what you look like today," he added, citing "born-in-the-cloud" channel partners as an example.

"How do you effectively compete against some of the new entrants that don't necessarily have the same legacy anchors that you have in your business today?" Murai asked.

Partners also need to define what success looks like and have a clear and measurable plan for getting to the finish line, he added.

"Know what success looks like a year from now," Murai said. "What do you want your headline to be?"

Todd Thibodeaux, CompTIA's president and CEO, said channel companies hoping to retool their businesses won't find it an easy task.

Thibodeaux informally polled attendees during his keynote address to gauge the extent to which digital transformation has impacted their businesses. The results: Most attendees report managed services have had a major influence on their businesses but have seen less impact from cloud, mobility and health IT.

"The bottom line here is there is no magic bullet," Thibodeaux said. "What it takes is a lot of hard work."

Next Steps

Watch a video on Schindler Group's digital transformation.

Read about digital transformation and the systems of engagement.

ChannelCon 2016: Unigma, Datto, Intronis make moves.

Dig Deeper on Traditional and emerging business partner models

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