Latest / Partnerships Unraveled / Steven Kiernan - AI, Cloud Marketplaces, and the Future of Channel Sales

Transcript

Steven Kiernan - AI, Cloud Marketplaces, and the Future of Channel Sales · Partnerships Unraveled

• 0:01
  Speaker 1: Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries about partnerships, and channel on a weekly basis.
• 0:06
  Speaker 1: My name is Alex Whitford, I'm the VP of Revenue here at Channext and this week I'm very excited to welcome our special guest, stephen.
• 0:12
  Speaker 1: How are you doing?
• 0:14
  Speaker 2: Yeah, not too bad, alex, Thanks for having me.
• 0:16
  Speaker 1: Yeah, I'm excited to have you on.
• 0:18
  Speaker 1: We've had Jay on and now it's time to speak to you as well.
• 0:21
  Speaker 1: Maybe, for the uninitiated, you could give us a bit of a background of who you are and what you do.
• 0:26
  Speaker 2: Yeah, no problem, I'll give you the short version.
• 0:28
  Speaker 2: Maybe we can get into the deeper background as part of the conversation Today.
• 0:33
  Speaker 2: I run the EMEA sales team for Omdia.
• 0:36
  Speaker 2: That's a relatively new role for me.
• 0:38
  Speaker 2: For the last six years I was running the global sales team for canalis canalis, world leader in partner ecosystem research and data and insights and events we were acquired by informa and we've come together with omdia and as part of that combination, I'm now running the, the amea team for omdia, still with a big focus on the partner ecosystem which we're glad to hear, because otherwise, you know I'm assuming if you were prioritized everywhere else, you'd have forgotten everything.
• 1:04
  Speaker 1: One of the things that I think is most interesting, and you sort of pointed out in your prep call, is you have an unusual background for someone who works in this partnership space, which is in journalism.
• 1:17
  Speaker 1: How's that shaped your sort of vision on how tech, sales and channel works?
• 1:24
  Speaker 2: Well, maybe I'll give you the sort of short version of my story how I got here, and then maybe I can give you some kind of parallels between tech, sales and journalism that hopefully are interesting for the audience.
• 1:33
  Speaker 2: So you're absolutely right.
• 1:35
  Speaker 2: I started my career in B2B journalism.
• 1:38
  Speaker 2: I'm an Aussie you might've picked up from the accent, but I started my career in media here in London where I am now Started actually in a different industry, the printing industry and sort of found my way through that career back to Australia running CRN magazine.
• 1:53
  Speaker 2: So I'm sure people know CRN.
• 1:55
  Speaker 2: Anyone listening to this who knows the channel will know them.
• 1:58
  Speaker 2: Once upon a time computer reseller news.
• 2:00
  Speaker 2: So for a time there I was the editorial director of CRN Australia and also IT News, which was more of an end user enterprise focus title.
• 2:09
  Speaker 2: My wife is English fell pregnant.
• 2:13
  Speaker 2: We decided to move back to the UK and so that was sort of how I ended up in Canalys.
• 2:19
  Speaker 2: Now I had identified that I knew we were going to try and move back to the UK.
• 2:24
  Speaker 2: I knew that was the plan.
• 2:26
  Speaker 2: We were trying for a baby.
• 2:27
  Speaker 2: Everything worked out well.
• 2:29
  Speaker 2: We moved back.
• 2:30
  Speaker 2: I'd sort of identified that Canalys was a good place for me to go, given my background as a journalist.
• 2:35
  Speaker 2: I'd attended their events.
• 2:37
  Speaker 2: Canalys runs the world's largest independent partner forums in APAC, in EMEA and in the Americas.
• 2:43
  Speaker 2: So I'd been lucky enough to go multiple times to the APAC event, always loved it and really loved the analysis and insight.
• 2:49
  Speaker 2: So I sort of always thought, okay, I'm going to leave Sydney, I'm going to leave journalism, I'm going to move to the UK and maybe Canales will be a good place to land.
• 2:59
  Speaker 2: It worked out.
• 2:59
  Speaker 2: I got the interview, I got asked and offered a role.
• 3:03
  Speaker 2: I assumed it was going to be probably as an analyst right, because there's quite a few journalists who have ended up as analysts.
• 3:09
  Speaker 2: In fact, some of our best analysts in Canalys have come through that background.
• 3:13
  Speaker 2: Instead they offered me the role to run the global sales team.
• 3:16
  Speaker 2: So after I kind of sort of reoriented my expectations, I went for it A bit of a change in career direction.
• 3:26
  Speaker 2: Six years later we more than doubled the size of the company.
• 3:30
  Speaker 2: The company was sold successfully, so obviously it worked out okay.
• 3:33
  Speaker 2: And then here we are today.
• 3:35
  Speaker 2: So I'll pause there.
• 3:37
  Speaker 2: I do.
• 3:37
  Speaker 2: Maybe you can talk about the parallels, but hopefully maybe you have any questions on the background before I dive in yeah, well, I think it's uh, something led them to give you a very different job than you were expecting.
• 3:50
  Speaker 1: How did that quite a seismic shift to go from head of sales, from analyst, to head of sales.
• 3:55
  Speaker 2: How did that transition happen, and what was the sort of uh confidence through the interview process that made people think, okay, actually steven should should be here, you know yeah, look, full credit to the co-founders and former CEO of Canala, steve Brazier, who is the one who kind of saw that in me and really made a huge difference in my career through offering me that role.
• 4:18
  Speaker 2: I mean, there's probably a few different reasons why I've ended up in that position.
• 4:21
  Speaker 2: If you ask Steve I think he said that one night at the APAC channels forum I was the last one at the bar and I was the first one up the next morning doing the five kilometers sunrise run and that was his reason.
• 4:35
  Speaker 2: If you can be up at the last one buying drinks with clients and then be up the next morning straight back into the networking, in this case running around the streets of Macau I think it was or maybe Bangkok then maybe you've got the sign of a salesperson.
• 4:48
  Speaker 2: I think it's probably not a bad testing ground if someone can do those things In the channel.
• 4:55
  Speaker 2: Relationships and face-to-face connections are so important.
• 4:58
  Speaker 2: I think, if I look back and reflect, I was speaking recently to one of our talent people here at Omdia we were recruiting and we talked a little bit about my background.
• 5:08
  Speaker 2: She said I was the first person she'd ever met who'd gone from journalism into a head of sales role.
• 5:14
  Speaker 2: Lots of people have gone in other kind of directions.
• 5:17
  Speaker 2: Lots of journalists end up as analysts or in comms or in marketing, but this was the first she'd seen, I said well, it might seem odd, but the reality is there's actually some really good parallels.
• 5:27
  Speaker 2: Journalists have sources and salespeople have clients and relationships.
• 5:33
  Speaker 2: Both of them are based on trust.
• 5:35
  Speaker 2: They're based on listening and understanding the other person's needs.
• 5:39
  Speaker 2: They're based on building that rapport and that relationship, and I think that so many of those relationships I've built as an editor are still relationships I have to this day, and in some cases they move from being sources who might've helped inform my research to being clients.
• 5:55
  Speaker 2: So we have a commercial relationship.
• 5:56
  Speaker 2: But the relationship is bigger than editorial, bigger than sales.
• 6:01
  Speaker 2: It is about trust and I think that's one of the key areas.
• 6:04
  Speaker 2: I mentioned listening Really important in sales.
• 6:08
  Speaker 2: Anyone who's got a sales team knows that one of the things you constantly try to drill into your team is just listen to the clients.
• 6:15
  Speaker 2: They will tell you everything that they need and then you'll be able to sell them what they're looking for.
• 6:21
  Speaker 2: And so sales is whatever the number is 80% listening, something like that, and so is journalism listening, listening, listening and then asking the right question at the right time with the right information.
• 6:33
  Speaker 2: There are probably others we could talk about.
• 6:36
  Speaker 2: I think maybe my last parallel would be social personal brand, having built up quite a large LinkedIn following.
• 6:43
  Speaker 2: You mentioned Jay McBain at the front.
• 6:46
  Speaker 2: I'm on the top of the call and I'm by no means where Jay is as an influencer on LinkedIn, but I have a decent following.
• 6:52
  Speaker 2: Journalists often do build up quite strong LinkedIn followings or social followings.
• 6:57
  Speaker 2: It's a critical part of media today Anyone in sales who's listening to this in the partner ecosystem, in any channel role, having a personal brand on linkedin is so critically important for your success and for me it's been incredibly valuable.
• 7:11
  Speaker 2: Um, please, if you're listening to this, connect with me, tell me you've heard this.
• 7:15
  Speaker 2: I'll make sure to tell the team and alex that, that you're a listener and um, yeah, look, my, uh, my connections are open and I look forward to connecting with you on LinkedIn.
• 7:25
  Speaker 1: I think especially on the listening side and sort of paying attention.
• 7:28
  Speaker 1: Attention is something I drill into the team constantly, as the customer has the answer Right.
• 7:32
  Speaker 1: And I think about that both from a how do we close deals and how do we build projects, but most importantly from sort of product or go to market improvements Right.
• 7:42
  Speaker 1: One of the things I absolutely love when we either close a deal positively or not, is sort of sit there and just zoom out and go how could we have done that better?
• 7:50
  Speaker 1: And we used to run those internally and now I'm just a much better, like I'll just call the prospect.
• 7:55
  Speaker 1: Hey, where did we screw up?
• 7:56
  Speaker 1: What went well, what could we have done better?
• 7:58
  Speaker 1: And it's amazing how quickly, um, you know, over a course of a few months, of doing that how, how seismically different, you end up running your business, maybe pivoting slightly towards the channel um, because I think getting feedback becomes even sort of more important when you start talking about partner-led sales, because you've got your partner's perspective, you've got the end user's perspective, sometimes you've got your distributor's perspective.
• 8:20
  Speaker 1: There's almost more information and more data that you need to gather.
• 8:24
  Speaker 1: So maybe even wearing some more of that journalism hat, I'd love to hear some more about how uh, we spoke a lot in the prep call around how the market's changing from sort of born in the cloud partners, maybe more msp partners, and how they're killing old style resellers and how some of all of those resellers who had that core go-to-market strategy absolutely nailed 10 to 15 years ago are now hard pivoting but because of the strengths of that hard pivot are really growing from strength to strength.
• 8:51
  Speaker 1: Talk to me about what you're seeing in that space.
• 8:56
  Speaker 2: You know I'm probably 10 or so years into the channel and I know there's people listening to this who's probably double triple my my length it's.
• 9:05
  Speaker 2: It's one of those industries where people have long, long tenures, but from the very beginning I remember the conversation.
• 9:10
  Speaker 2: You know it wasn't the current conversation is all AI, but we could backtrack 10 years.
• 9:14
  Speaker 2: It was all about cloud still is, but you know it was at that point much fresher and there was a big.
• 9:21
  Speaker 2: Every vendor we spoke spoke to would say things along the lines of we don't really focus on legacy box moving old school channel, we're interested in born in the cloud boutique ISV relationships.
• 9:35
  Speaker 2: Those conversations haven't gone away.
• 9:37
  Speaker 2: However, what I think, certainly I've identified and maybe this is part of a broader trend is you see the largest cloud vendors, the hyperscalers themselves, even some of the more SaaS-focused vendors or the fast-growing cybersecurity companies, all of them actively looking at I'm going to air quotes here for those who may just be listening, but they're kind of traditional partners quotes here for those who may just be listening, but they're kind of traditional partners and really building up distribution programs or programs to go after what would traditionally have been VARs or resellers, large solution provider partners, because those are the companies with customer intimacy, especially in that SMB, mid-market and corporate and commercial part of the business where the channel is its strongest.
• 10:23
  Speaker 2: I think that you often see this with startup and emerging ISVs where they go for those boutique or born-in-the-cloud partners because they think they're the only ones with the skills and it is true, and they can often be helpful to facilitate entry into those enterprise customers when you start out.
• 10:37
  Speaker 2: But realistically, those large partners the Insights and Computer Centers and CDWs and TD Cinex and Ingrams, and the list will go on and on and I don't want to try and say it all because someone will be left out but all of these partners who have been around very successful businesses, continue to be central and significant players within the channel, both for the more traditional for instance hardware part of the business, which continues to be a strong part of the industry.
• 11:06
  Speaker 2: Software licensing, under a lot of shifts and the changes with Microsoft recently, show a new paradigm in software reselling and software licensing that we could maybe get into if you'd like to.
• 11:16
  Speaker 2: They're still the route to market for everyone, from those traditional vendors to emerging vendors.
• 11:24
  Speaker 2: And I also think the point I would make is that the channel doesn't exist in a vacuum.
• 11:29
  Speaker 2: It doesn't exist in a point in time If partners of any description, whether that's resellers or distributors or MSPs or SIs if their core business is under pressure because of a new and emerging partner type, they don't just rest on their laurels and seed that market.
• 11:45
  Speaker 2: And we've seen that through the acquisition strategy of a lot of the larger partners.
• 11:48
  Speaker 2: There's many examples.
• 11:50
  Speaker 2: I think Insight buying SADA, google Cloud's largest partner, is probably a really good example.
• 11:55
  Speaker 2: Across the board we're large again.
• 11:58
  Speaker 2: Air quotes.
• 11:59
  Speaker 2: Traditional partners have seen a need to get into a more emerging part of the technology space and, whether through acquisition or organic growth, have continued to do it.
• 12:09
  Speaker 2: I think that will continue.
• 12:09
  Speaker 2: So you know, day to day I don't hear as much pushback from maybe newer cloud vendors asking for born-in-the-cloud partners.
• 12:19
  Speaker 2: I think they do see the value in the broad ecosystem, both the longstanding resellers and buyers and distributors, as well as those boutique partners who continue to play a really important role.
• 12:30
  Speaker 1: Yeah, it's very sort of new era, new wave right To sort of say, hey, the way that we've done business for 50 years is dead and, trust me, this new thing is going to be great.
• 12:40
  Speaker 1: And you sort of take a picture of how it was done and assume it's all going to stay the same.
• 12:45
  Speaker 1: But actually you know, to name some great businesses CDW Insights, softcat they have a huge customer base.
• 12:53
  Speaker 1: They have departments who really understand what their customers care about and they've segmented that from enterprise, mid-market and SMB.
• 13:00
  Speaker 1: And it's sort of arrogant to go, yeah, but they're either through M&A or through just sort of feet on the street going to learn how to do this.
• 13:09
  Speaker 1: They are actually it's easier for them to go and acquire a business that's very specialist and apply that specialism to their broad base than it is for a very specialist customer to go and acquire that broad base, because customer acquisition and retention is fundamentally the hardest and most valuable thing to achieve.
• 13:25
  Speaker 1: Driving specialism into that is always a sort of easy emotion and I think you know Cisco are a great example of this If you get really good at M&A, which a lot of these massive partners have got very good at you know.
• 13:41
  Speaker 1: I remember when Softcat and CDw started acquiring uh ev businesses so they could start to uh implement sort of installation on-site engineering.
• 13:49
  Speaker 1: It's much easier for them to sort of build this practice and just go brilliant, now we can outsource this.
• 13:54
  Speaker 1: But it's outsourced internally.
• 13:55
  Speaker 1: It's very quick to do that hard pivot and I think the inside examples are a perfect one.
• 14:00
  Speaker 1: Um, one of the areas that I'm sort of most fascinated I think we can sort of bring your microsoft point together is more and more we're hearing about brands trying to dominate in the smb space.
• 14:11
  Speaker 1: I think smb, the the market segment, is becoming more valuable as smbs consume more and more technology.
• 14:18
  Speaker 1: Um, I think it's also one of the most interesting and most complex areas to win, mainly because a lot of the SMBs buy from small boutique partners, regional resellers.
• 14:29
  Speaker 1: Talk to me about how you think brands are well-placed or best placed to go and capture that market.
• 14:36
  Speaker 1: Who's doing it well and why.
• 14:41
  Speaker 2: I might, I'll answer your question broadly.
• 14:44
  Speaker 2: I think I'm not going to necessarily name names because it changes.
• 14:46
  Speaker 2: It's almost impossible to answer.
• 14:49
  Speaker 2: But you know an SMB also.
• 14:53
  Speaker 2: You know you're talking to someone from an analyst firm.
• 14:55
  Speaker 2: So you know you put an analyst on the call and you say SMB.
• 14:57
  Speaker 2: They're going to say well, what do you mean?
• 14:59
  Speaker 2: How many seats do you mean?
• 14:59
  Speaker 2: Let's get to definitions, and vendors are like this too right.
• 15:02
  Speaker 2: So we've got to be clear what we're talking about.
• 15:09
  Speaker 2: I think the smb you're right that a lot of vendors will ask us can always help us to win in the smb market, because the only way to properly address that market is through the channel.
• 15:16
  Speaker 2: The fact is, if you are name any enterprise tech vendor, you are not going to employ highly paid direct sales people to go and sell into that market space.
• 15:26
  Speaker 2: The numbers just don't make sense.
• 15:28
  Speaker 2: Number one and we've seen this across the board with the you know it's the classic pyramid Get your enterprise sellers to sell into those, your direct sellers and those enterprise you know those enterprise clients and then leave the rest to partners.
• 15:42
  Speaker 2: So you know I clients and then leave the rest to partners.
• 15:46
  Speaker 2: So you know, I think that that's.
• 15:49
  Speaker 2: It will only continue to increase, that vendors will understand that their way to approach the smb market, which is such a significant part of the economy, is through the channel.
• 15:57
  Speaker 2: It's through distribution as well.
• 15:59
  Speaker 2: It's going to have to be a two-tier model to go after that market.
• 16:01
  Speaker 2: Um, I think that there are many different, myriad ways.
• 16:05
  Speaker 2: I know we talked on our previous conversation about the need to leverage MSPs, who are often especially in that really small segment, are going to be the right market.
• 16:14
  Speaker 2: There's a route to market, especially through some of the cloud distributors, the Pax8s of this world or Sherwebs or companies like that, who've been very successful at that kind of small smb or and larger kind of msp focused partner as well as just going through the traditional distribution route.
• 16:33
  Speaker 2: So look who's doing well, who's not.
• 16:35
  Speaker 2: I'm not going to get into naming names because I'll leave someone out, but, um, but I think the distribution of a big place to play and partners will always be the dominant force within that market segment.
• 16:46
  Speaker 1: Yeah, I completely agree, and, someone who's born in distribution, I think it's so easy to assume that you can touch all these end users by going right, we're going to go.
• 16:58
  Speaker 1: Cgw is a great example, right, amazing enterprise and mid-market business, but unbelievable from an SMB.
• 17:02
  Speaker 1: They do it, but even them, they pale in comparison.
• 17:06
  Speaker 1: When you start to talk about the tens of thousands, hundreds of thousands of local resellers and msps who you know.
• 17:13
  Speaker 1: They buy from dave because they've known dave for years, they trust dave and they play, play golf with dave, um, and so it's like okay, how do we filtrate?
• 17:20
  Speaker 1: And distribution has to be, or, or a cloud distributor has to be that aggregation mechanism.
• 17:25
  Speaker 1: I think the thing that I find interesting in terms of potentially and I'd love to get your view here how you think ai can potentially influence that part of the market my view is that marketing is the right way to win the attention of the smb end user and then use partners to drive the sort of facilitation and aggregation of the revenue and services.
• 17:46
  Speaker 1: And I think AI is going to play a really interesting role there in terms of how do you put the marketing in the right person at the right time with the right messaging.
• 17:55
  Speaker 1: How do you see AI playing a role in how channel go to market is going to change.
• 18:01
  Speaker 2: I mean, if I had a really good answer for it, I wouldn't probably be on this podcast.
• 18:04
  Speaker 2: I'd be on, uh, I'd be.
• 18:07
  Speaker 2: I'd be making millions with my.
• 18:09
  Speaker 2: I don't think anyone really knows perfectly the use case for ai and we've seen that across the board.
• 18:17
  Speaker 2: I know maybe not just to step away from your question slightly.
• 18:20
  Speaker 2: You can look at we put a great report out only last week looking at the largest global systems integrators who should be absolutely well-placed to capitalize on Gen AI and they have put billions of dollars into building Gen AI practices around consulting services to enterprise.
• 18:35
  Speaker 2: You should be the sweet spot for AI and largely a lot of those endeavors have so far been failures because everyone wants a proof of concept but very few people have managed to move that into production, other than the huge infrastructure build-out which is obviously driving particularly towards NVIDIA, but also the hyperscalers who are building out.
• 18:54
  Speaker 2: There's a huge amount of revenue being made there.
• 18:56
  Speaker 2: By the way, that is currently completely direct business.
• 18:59
  Speaker 2: The channel is not playing any part in that multi-hundred-billion-dollar rollout.
• 19:03
  Speaker 2: The channel is not playing any part in that multi-hundred billion dollar rollout.
• 19:06
  Speaker 2: So I think that, to ask a question, what is the successful AI use case?
• 19:09
  Speaker 2: Anyone who tries to tell you what it is.
• 19:11
  Speaker 2: They just don't know.
• 19:12
  Speaker 2: We're still trying to work it out, but we do think that, generally speaking, there's a couple of different use cases for the channel that we'll be keeping an eye on.
• 19:29
  Speaker 2: Different use cases for the channel that we'll be keeping an eye on, I think there's.
• 19:31
  Speaker 2: The basic one is just essentially still a reselling motion of AI products Copilot, copilot Plus PCs, things like this that partners will capitalize on, but essentially it's just a pretty standard motion.
• 19:38
  Speaker 2: With a new AI-driven product Then you'll start to move up to consulting services and also then more software development services wrapped around ai.
• 19:45
  Speaker 2: Again, there is an opportunity there, but even the big gsis haven't quite worked out fully monetize it as well.
• 19:51
  Speaker 2: Maybe more immediately it's going to be in the.
• 19:54
  Speaker 2: It's going to be internally, where those where those um success stories are.
• 19:58
  Speaker 2: I will.
• 19:59
  Speaker 2: I would be surprised that if there were any partners or distributors who weren't currently doing proof of concepts internally on how to leverage AI in their distribution, in their customer experience, all find that killer app that will drive Gen AI from being a novelty or something that we'll pay a little bit of money for to being the landmark earth-shattering technology.
• 20:20
  Speaker 2: It will come, but it still seems somewhat undefined.
• 20:41
  Speaker 2: I think probably a good example in that space is around AI PCs.
• 20:46
  Speaker 2: Ai PCs are something we're tracking very closely.
• 20:50
  Speaker 2: The rise of the premium AI PCs is driving and is influencing PC refresh, which is a huge part of the channel, but still Windows 10 end of support is probably a bigger driver.
• 21:03
  Speaker 2: The two things are going hand in hand.
• 21:04
  Speaker 2: But what we aren't seeing is there is one absolute I must have application that every customer needs to buy an AI PC that's driving them to pay more for that next, more premium level PC.
• 21:18
  Speaker 2: Again, we all hope it will come.
• 21:21
  Speaker 2: I'm sure it will, but today you tell me if you know what it is, because I don't think anyone's quite got that perfect answer.
• 21:28
  Speaker 1: Well, a bit like you said, stephen, if I think I had the perfect answer, I'd be driving a much nicer car than I do today.
• 21:33
  Speaker 1: But I think the thing that I find interesting about when I talk about AI and go to markets for the channel, there's sort of two ways you can view that structure.
• 21:41
  Speaker 1: The first is, I think, exactly what you talked about, which is, hey, how do each individual company implement AI as a sort of operational efficiency and effectiveness tool?
• 21:52
  Speaker 1: The bit that I also then find interesting but this is more as a tech nerd and a channel nerd, as someone who has a podcast channel is how does AI then glue the infrastructure of those disparate businesses together?
• 22:04
  Speaker 1: And I think that's one thing where I think the company that can do that bit well, they'll be driving a really nice car.
• 22:11
  Speaker 1: That's going to be incredible.
• 22:14
  Speaker 2: What Alex hasn't told the listeners is we're not really here.
• 22:17
  Speaker 2: This is just two AI bots talking to one another.
• 22:21
  Speaker 1: It's just two chatbots talking to each other.
• 22:23
  Speaker 2: I will say that you know there was something doing the rounds on social where the two AI kind of agents work out that they're both agents talking to one another and immediately switch from conversational to beeps and boops in code and it's just.
• 22:39
  Speaker 2: It's either the most amazing or the scariest thing.
• 22:42
  Speaker 2: As soon as the robots realize they can talk to each other, they start using a language none of us can understand.
• 22:47
  Speaker 2: So I guess that's probably the sign that we we are, we are still human, that we haven't we haven't switched over to a robot code.
• 22:53
  Speaker 1: That that that made me went full terminator mode.
• 22:56
  Speaker 1: I was like, okay, yeah, this isn't good news.
• 22:58
  Speaker 1: Um, we, we've touched on ai and I'm gonna ask you the forward-looking question in terms of what you think is going to change over the next five years, which I'd love to have an answer that doesn't start with AI, because I think we all know that's going to be a seismic change.
• 23:14
  Speaker 1: But what else do you think is going to be transformational?
• 23:17
  Speaker 1: And sort of, for the senior channel executives who are listening, where should they be looking?
• 23:22
  Speaker 1: Over and above, we know AI is going to change how we operate.
• 23:26
  Speaker 2: Yeah, so I would preface anything I say by for those people listening.
• 23:33
  Speaker 2: They are really interested in predictions.
• 23:34
  Speaker 2: You should go to canalescom.
• 23:37
  Speaker 2: You should look into our freely available research and get much more well-informed answers from a range of global analysts who can tell you what they think is coming.
• 23:44
  Speaker 2: And we've published, you know, each year we publish our kind of forward-looking predictions.
• 23:50
  Speaker 2: Look, I think from a channel-specific predictions, we are seeing continual landmark shifts in the way that technology is bought and sold through partners.
• 24:01
  Speaker 2: I think some of the specific licensing changes that we've seen from Microsoft are going to drive major shifts and some will be positive, but some will be hard for the larger partners to process.
• 24:15
  Speaker 2: They're going through this right now.
• 24:16
  Speaker 2: I think we're going to see this across the board.
• 24:18
  Speaker 2: I think that if we looked at what happened with Broadcom and VMware is a good example of what can happen as larger vendors take more of the enterprise customers into more of a direct motion.
• 24:28
  Speaker 2: The partners that succeed are going to be the ones where we talked about smb.
• 24:33
  Speaker 2: The smb market is still there and is an absolute huge tam.
• 24:38
  Speaker 2: It's a harder tam for um for partners to address.
• 24:42
  Speaker 2: It's much easier to sell to one large customer than to sell to hundreds of thousands and yet that will be the place that the channel has that unfair advantage.
• 24:50
  Speaker 2: So accepting that that is going to be the shift that will happen has that unfair advantage.
• 24:52
  Speaker 2: So accepting that that is going to be the shift that will happen on the software side of the business is something I think we'll continue to see accelerate.
• 24:58
  Speaker 2: Um look, I think from a.
• 25:00
  Speaker 2: You know we haven't talked about it yet, but cloud hyperscale cloud marketplaces is probably one of the biggest uh impact.
• 25:09
  Speaker 2: You know influencers having some of the biggest impact on the way that software is bought and sold.
• 25:14
  Speaker 2: You know we're seeing that at the moment.
• 25:17
  Speaker 2: I think there's maybe $350 billion of credits or commitments that enterprise customers have made to the big three hyperscaler marketplaces and now that those marketplaces are allowing third-party ISVs, security companies, data analytics, software vendors to sell their products through the marketplaces, that's driving a huge amount of business in that direction.
• 25:42
  Speaker 2: That's incredibly disruptive, particularly for distribution.
• 25:44
  Speaker 2: Distribution is responding and there are programs that the distributors are finding, but we will see a shift in the way that software products are bought and sold, with a big influence, particularly from AWS marketplace, but Azure and Google Cloud as well.
• 25:57
  Speaker 2: There continues to be a hardware business that will not be impacted by that.
• 26:01
  Speaker 2: There continue to be other ways in which partners and distributors can capitalize on that.
• 26:05
  Speaker 2: But I'm not really going five years out.
• 26:07
  Speaker 2: I'm probably talking 12 to 24 months out what some of the biggest impacts are.
• 26:11
  Speaker 2: I would say we could sit here and list all of the potential changes that will squeeze partners, but if I went back 10 years ago, we would have been saying the exact same thing about cloud, and what happened is partners built cloud practices, they built motions around cloud, they stayed close to their customers so that the cloud vendors had to sell through them.
• 26:32
  Speaker 2: So I'm I'm really an optimist around partners finding a place there.
• 26:37
  Speaker 1: But, um, but yeah, look, there's definitely some, some pressures that partners are having to to work through at the moment I think the thing that I find interesting about the sort of aws side um is uh, obviously we've talked about aws and its ability to sort of gain access the credit pieces is obviously extremely interesting when we talk about enterprise sales.
• 26:56
  Speaker 1: But that's sort of or it could appear that that's in conflict with your messaging around SMB, but obviously AWS is as keen as anyone else to access and sort of drive value into that SMB space.
• 27:08
  Speaker 1: How do you sort of see those two worlds coming together?
• 27:10
  Speaker 1: And I think the thing that's particularly interesting is obviously the marketplace via AWS was no distributions involved and now distributions re-involved.
• 27:19
  Speaker 1: Do you see that whole world?
• 27:21
  Speaker 1: Because it's sort of a big melting pot in terms of how you can go to market there.
• 27:26
  Speaker 2: So I think the important thing to recognize about specifically that big hyperscale marketplace trend is that $350 or $360 billion, I think, was the last number we quantified in terms of the commitments.
• 27:42
  Speaker 2: This is from enterprise customers.
• 27:43
  Speaker 2: Those are enterprise customers who said we are going to commit to spending this many billions of dollars on AWS infrastructure, azure infrastructure and Google to get the best price possible.
• 27:52
  Speaker 2: They've been unable to burn that down, buying native services, and so what they're doing is that they're finding ways to spend it on third-party services.
• 27:58
  Speaker 2: The hyperscalers win anyway because in many cases not all cases, but in many cases those ISVs are running on AWS.
• 28:05
  Speaker 2: So they're making money on the backend, regardless of whether they're selling a native service or a third-party service, but that is still an enterprise business.
• 28:14
  Speaker 2: Smb customers don't have big commits on AWS Marketplace.
• 28:18
  Speaker 2: They don't really know what it is.
• 28:19
  Speaker 2: They might be buying from AWS from Amazon Business and ordering things on Amazon, but that's not necessarily where the motion has been.
• 28:25
  Speaker 2: So I think it is okay that those things aren't in conflict, where you can see AWS in one case potentially competing with distribution for enterprise business.
• 28:38
  Speaker 2: That's still going to be partner-led on the one side.
• 28:41
  Speaker 2: Let me just come back to that partner-led piece on the marketplace.
• 28:43
  Speaker 2: When I finish my thought that could be going for the enterprise, while still the large hyperscalers can be looking to unlock distribution and partnerships to access those SMB and SMB can mean very small SMB, sme, commercial.
• 28:57
  Speaker 2: Those hyperscalers are actively working with Canalys, by the way, to build a strategy to grow more of their footprint within that and drive more of those SMBs towards cloud through partners and drive more of those SMBs towards cloud through partners.
• 29:15
  Speaker 2: I did have a thought on Marketplace but it's escaped me.
• 29:17
  Speaker 2: So if it comes back to me I'll get back, but I'll pause there and hand back to you.
• 29:27
  Speaker 1: I think, yeah, I find this world.
• 29:27
  Speaker 1: I sort of think about channels as sort of horizontal and vertical.
• 29:29
  Speaker 1: I did that the wrong way around.
• 29:30
  Speaker 1: Alliances in terms of how you build the tech integration.
• 29:33
  Speaker 1: For those of you who aren't watching yeah, then I did it perfectly For those of you who are watching.
• 29:38
  Speaker 2: Apologies, he didn't say vertical and do a horizontal line and say horizontal and do the Y-axis.
• 29:45
  Speaker 1: I think the thing that is sort of really interesting, and it's how do you drive the technical alliance together.
• 29:51
  Speaker 1: So how does AWS know aws, plug in its various isvs that are built on aws, but make sure they integrate together to to deliver a sort of whole felt solution.
• 30:00
  Speaker 1: The bit I then find doubly interesting is how do you build a go-to-market alliance around that, and I think that's where that's where the channel has a long way to go in terms of building joint propositions with some level of customization and tying that story together for partners.
• 30:14
  Speaker 1: I'm also, like you, extremely optimistic, because I think everything that the channel's gone through over the last 15 years would tell us that brands want to work less with the channel, and yet we see partners continuing to grow from strength to strength.
• 30:27
  Speaker 1: Maybe one message out to our listeners who are more on the partner side what would your advice or where would you think that they should start looking, apart from, obviously, on canalis?
• 30:36
  Speaker 1: Where should they start looking in terms of how to innovate their practices?
• 30:42
  Speaker 2: so I know.
• 30:42
  Speaker 2: Just one comment as I as I get there um, you talked around the right alliances, um, and I just want to use cybersecurity as an example.
• 30:55
  Speaker 2: We estimate there's 6,500 cybersecurity ISVs in the market.
• 31:00
  Speaker 2: No one can make sense of that.
• 31:02
  Speaker 2: No one can understand.
• 31:04
  Speaker 2: No customer can understand who really is best to breed, from the largest, from the CrowdStrikes and Sentinel Ones and Zscalers and Octas and Trends and all this of this world to the three five-staff cybersecurity ISV that started up in the US, in Israel, in Europe.
• 31:19
  Speaker 2: No one can make sense of that.
• 31:21
  Speaker 2: Customers it's the really best technology.
• 31:23
  Speaker 2: Certainly no partners either.
• 31:26
  Speaker 2: This is why, on the security side, we're seeing the platform story, because we'll see the world centralize around large platforms, then integrate into all of these other ISVs that make it easier for customers to buy and make sense of that.
• 31:38
  Speaker 2: The announcement this week of Google buying Wiz is an example of that.
• 31:43
  Speaker 2: Google will become one of those central platforms with the biggest acquisition, I think, in its history.
• 31:48
  Speaker 2: I think that parallels to partners, think in its history.
• 31:50
  Speaker 2: I think that parallels to partners, in the same way as just on security.
• 31:54
  Speaker 2: There's so much complexity, the technology space is so complex, so what are customers going to do, especially in SMB space, where they can never be experts.
• 32:07
  Speaker 2: They're going to go to the partner they know and trust and they're going to ask them.
• 32:11
  Speaker 2: You help us to make sense of this.
• 32:14
  Speaker 2: I think in every single different facet of this conversation we've had Alex, we've talked about trust, whether it was my example of moving from journalism to sales, whether it's what partners offer to customers, whether it's the hyperscalers working with partners, it's all about making it easy for customers to get access to technology by doing that through a trusted partner who can bring together the right technology products.
• 32:36
  Speaker 2: That's probably always been what the channel's done and that's going to continue to be the core of the market.
• 32:40
  Speaker 2: The brands will change, the motions will change.
• 32:43
  Speaker 2: Mckinsey would tell you that for every customer, there's seven partners involved in the life cycle of a technology technology integration.
• 32:51
  Speaker 2: So working out as a partner, which of those seven you are and who the other six are that you can work effectively with to wrap around that customer and get an unfair share is going to be critical.
• 33:00
  Speaker 2: But I think there's there's a huge demand for um, the services, the trust capability that the partners bring.
• 33:08
  Speaker 2: So I think the future remains remains very bright.
• 33:10
  Speaker 1: So we started with trust and we're going to end with trust as well, stephen, because we always ask our current guests to recommend who our next guest should be, and I know you have a couple of people in mind.
• 33:21
  Speaker 2: Yeah, so you know, I haven't actually asked them yet, so I do hope they stay yet, but I'm going to nominate Scott Frew and Nick Faroukios from iAsset, if I could just use this reference, maybe to draw to a few different strands.
• 33:37
  Speaker 2: We've talked about you and I started talking and end up on this podcast here, because your organisation is one of the hundreds of critical agencies and ISVs and providers that sit on the Canals ecosystem landscape, which again is freely available on our website if you wanted to go and look for it, and another one is iAsset friends of mine Now, but Scott and Nick actually are.
• 34:00
  Speaker 2: We talked about distribution, your distribution background.
• 34:03
  Speaker 2: They're also very successful distribution entrepreneurs who sold their first company to Westcon.
• 34:08
  Speaker 2: They sold their next company to Arrow Aussies, by the way.
• 34:11
  Speaker 2: So you know a bit of nepotism for the Aussies who I'm recommending.
• 34:14
  Speaker 2: And actually back when they ran Distribution Central, the company they sold to Arrow, the first ever industry event I went to when I got into the channel was hosted by Nick and Scott in Sydney and it was a co-op event with AWS, I think, equinix and NetApp right, and this is all the way back then.
• 34:35
  Speaker 2: So I think there's probably some parallels there between my role in journalism and the relationships I've built there that continue now that I asked as a client of Canales and a sponsor of our Canales forums.
• 34:45
  Speaker 2: Bringing back to the conversation we've had today, you asked about trust.
• 34:49
  Speaker 2: This is what the partner ecosystem is about.
• 34:52
  Speaker 2: It's about trusted relationships, and even as our roles change, even as the market changes and the conditions change, those things become even more important, and so I hope that 10 years from now, I'll be on a different podcast or whatever the future AI driven podcast.
• 35:08
  Speaker 2: Maybe I'm still a human, maybe I'm a bot, and I'll be recommending the same folks to you um or your ai version to to interview, because those relationships will will stand up for for decades more yeah, we'll just have all the avatars doing all the heavy lifting.
• 35:22
  Speaker 1: That's the, that's the girl.
• 35:23
  Speaker 1: Awesome, steven, that's been uh it's been wonderfully insightful.
• 35:26
  Speaker 1: We managed to dot from everywhere, from uh journalism to trust, all the way through to how avatars are going to run the world, and it's going to be a terminator light.
• 35:34
  Speaker 1: So I really appreciate you sharing your knowledge today.
• 35:36
  Speaker 1: Likewise, thanks for having me.
• 35:38
  Speaker 1: Thanks.