IDC predictions for 2018: mergers and acquisitions, multi-vendor cloud and intellectual property, on the rise
1 February saw the publication of the IDC predictions for 2018. A session where the consulting firm shared the main conclusions of the study: “2018 IT Channels and Alliances Predictions”. It also reviewed the extent to which the 2017 predictions were fulfilled.
How the channel performed in 2017
At the start of the session the IDC analysts stressed several aspects. On the one hand, the positive evolution and high degree of materialization of the following forecasts:
- Client commitment to digital transformation, as the cornerstone of partners’ business.
- The swift change of the channel’s business model. 30% of partners will have modified it by 2021.
- Increased focus on client satisfaction due to the sale of cloud services and recurring revenue.
On the other, they found less inertia in:
- The verticalization of the channel. In accordance with their forecasts for 2018, 20% of partners should have restructured around industries.The verticalization of the channel. In accordance with their forecasts for 2018, 20% of partners should have restructured around industries.
- The review by most top partners of their Go to Market strategy for 2018. Boosting their focus on digital marketing and their presence in marketplaces and “partner search” tools.
- The change in the role played by the organizations that manage Strategic Alliances to become trusted advisers for CXO.
- The adaptation of suppliers’ “partner programs”. Specifically, the need for a new type of channel and market reality.
According to IDC what awaits us in the future?
Intellectual property will be a strategic value
By 2020, intellectual property (IP) will define the business models, the relations between partners and the value of the distribution channel. And manufacturers will be “judged” by their capacity to integrate and extend the “IPs” of their partners.
Likewise, the Partner-to-Partner (P2P) activity will represent at least 30% of the revenue of the leaders in cloud service sales.
The IDC predictions also point to the creation of a specific partner segment. Specifically, in those centered solely on business creation via relations with other partners (P2P). The growth of the latter will drastically outshine that of conventional, solely customer-oriented partners. This capacity to associate will also be a key indicator of companies’ value in 2021.
Prior to this, since 2019 a fifth of the chief providers and manufacturers of services will develop formal working frameworks, best practice guides and contracting systems to develop business and cooperation between partners.
Multi-vendor cloud solutions
By 2020, the concept of “cloud aggregator” will account for over half of indirect sales.
As the demand by end clients of tried and tested, profitable multi-vendor solutions increases, technology aggregators will find themselves better positioned.
Their success will depend on their capacity to integrate the most successful and sought-after solutions. It will also depend on the help they afford partners to create customized solutions for their clients.
Aggregator services will simplify invoicing and ongoing management of these solutions. As a result of the above, the IDC predictions point to both distributors and aggregators becoming essential parts of the Go to Market strategy of cloud service vendors.
GDPR and security: the key figures
By 2020, partners with the necessary intellectual property (IP) to manage services in line with the regulatory framework (GDPR in particular) will be a priority for software manufacturers and cloud vendors who need partners at a local level.
Marketplaces will effectively become the centers of the ecosystem (partner, end client, vendor). As will the platforms through which technology is acquired.
Software and service vendors will focus their efforts on consolidating and commercializing their marketplaces. And cloud aggregators will supplement and/or compete with the vendor marketplaces.
IoT will become the chief support of the more traditional channel. Over 70% of partners focused on infrastructure will be involved in IoT rollouts. Over the next 36 months we will see exponential growth in the number of alliances and associations between partners and IT and OT vendors in order to offer comprehensive solutions.
In the same vein, Gartner predicts that by 2020, 50% of OT vendors will have signed alliances with IT providers to create their IoT proposal.
Modular, reusable business solutions
By the end of 2018, 25% of partners will have built their solutions using more modular, reusable architectures. This will enable them to achieve swifter, more customized and profitable implementations.
Vendor offerings will also become more modular. This will help partners to roll out the necessary components in a more effective manner. Thus, they will pay only for what they use.
IDC Predictions: mergers and acquisitions to strengthen verticality and cloud capabilities
Over the next 36 months, acquisitions will lead to a major transformation of the channel landscape. Vendors will focus their acquisitions on companies belonging to their community of partners or alliances. Their aim will be to strengthen their value proposition in certain industries or technologies together with their cloud capabilities.
The P2P sphere will also see similar mergers and acquisitions. Partners who have worked together will decide to take it further and formalize their relationship.
Lastly, according to the IDC predictions for 2018, the most innovative startups that have passed through incubators, have taken part in vendor-led programs or reached agreements and alliances with the major global integrators or large consulting firms will become the target. In particular, if these startups possess powerful vertical solutions, are companies with native cloud capabilities, in AI (Artificial Intelligence) or in advanced security.