Techaisle Blog

Intense India Focus

Indian government's Digital India campaign is getting the attention of almost everybody in the IT industry, be it the multinationals or the local players. Sensing the vast potential, Dell started early with its governing body inaugurating the entire launch of Digital India in Delhi. Summing up his excitement, Alok Ohrie, President, Dell India said, “It is one of those campaigns which I believe is going to really position the country to a point where clearly it will continue to become stronger as an economy and would help realize the dreams of the nation with regards to it being a knowledge based economy. This is one initiative from the government that's going to really energize spend on IT and it is also going to be a big play for most of the players in the IT industry”.

Dell in India is also beyond just domestic operations. Almost all business functions that exist globally are represented in India including an R&D setup of about 2,500 engineers and PhDs. The India-based R&D unit seems to have played a big hand in the development of Dell’s 13G server technology.

Capitalizing on privatization

Immediately after privatization, Dell executives saw the potential for an accelerated pace of execution of various initiatives at a global level as well as a whole lot of flexibility and encouragement to try new go-to-market models. This agility is what Dell India needed and as per its executives “has benefited Dell India big time”. In fact, they are quick to point out that the India operations have grown a little faster than the global business, “our growth in India versus the competition is five to six times faster”.

Midmarket businesses in India are listening and are accepting Dell’s end-to-end solution story and are expecting an advisory role and a consultative approach from Dell in their engagements. Many digital commerce businesses are also looking for Dell to help them define a blueprint for future with regards to IT deployment. Being private with an end-to-end solution orientation Dell’s India sales organization is neither getting limited nor getting constrained in its alignments with customer business objectives, nudging the customers to a future ready infrastructure capable of delivering a future ready enterprise. Playing an advisory role is also forcing the sales organization to be creative in its solution design, unrestricted as it does not have any legacy to protect.

The new GTM

In early 2014, Dell India rolled out a new GTM strategy for the India market. The new GTM strategy was first piloted in India and provides customers with a choice of being with Dell, either direct or indirectly through a partner. It is a GTM model that lends itself extremely well to improving Dell India’s engagement across different customer segments. This strategy brings a change from Dell India’s direct approach in the past with Dell introducing three RTMs: 1/Dell Led for direct sales engagement, 2/ Partner Led for business accounts with special pricing and products; and 3/ Distribution Led for consumer IT products.

Within the GTM model there are three different RTMs (routes-to-market). First is the Dell-led RTM which is Dell’s direct engagement with end-customers. Some of the account managers’ training modules have been modified to help them have deeper, richer, more mature conversations with customers in the form of advisory roles and consultative approaches. However, Dell-led RTM does not mean that partners are shut out from engaging in the same account along with Dell. The partners bring complementary skill-sets to work along with Dell solution experts. Dell asserts that it is more than willing to work with a partner and hence Dell has named the RTM as Dell-led and not Dell direct.

Within the Dell-led RTM, Dell has further segregated accounts into two: one that is more of reach, development & penetration consists of Dell India’s existing accounts and where a lot is already known about the customer; and in the other are those accounts that Dell calls as activation. There are close to 2,500 accounts in Dell-led RTM which are split into four geographies - the north, south, east and west.

The second RTM is the Partner-led RTM for business accounts with special pricing and products. Apart from the 2,500 accounts, the rest of the named accounts have been identified for partners to engage with by identifying, developing and addressing the opportunities. Dell is in a support mode in these opportunities.

The third RTM is distribution-led RTM focused on consumer IT products. This RTM was developed to expand reach into customers in tier 3/4/5 cities as well as customers who are not IT savvy. Dell currently has five distributors in India and a web of local distributors to reach into remote areas of India.

Disappearing Partner Conflict

Dell is recognizing the need to erase the perception of consistent channel conflict and hopes that the three different RTMs will help. Alok Ohrie points out, “anomalies have been removed through the new GTM model and it is a very, very predictable model for the partners”.

Techaisle’s India analyst, Gitika Bajaj and Arun Mishra crisscross the entire country directly meeting with channel partners. Not every Dell channel partner is happy but from an overall perspective there is obviously tremendous momentum and Dell’s RTM has legs. Comparing Dell with its closest competitors, channel partners say that “Dell's responsiveness is impeccable when a deal is being struck at the end user level”.

This is a two part blog article. The first part, published earlier, reviewed the predictions we made for 2015 and the second part, below, focuses on outlook for 2016 and for the longer term (2017 - 2020).

Top 10 Predictions for Year 2016

1. 2016 will see even more intense emphasis on “CIA-Plus”
IT Suppliers will begin to align their offerings with Cloud, IoT, and/or Analytics; products that do not address end-user needs in these areas will be positioned as infrastructure and integration services needed to capitalize on these technologies. This trend, like hybrid IT, will continue into 2017. In 2016, Cloud and Analytics will remain among the top five IT priorities of SMBs and midmarket businesses. IoT will inch its way up into the priority list, though adoption will remain limited.

2. Rise of IoT will be constrained by a lack of real-world examples
From a buy-side perspective, the rise of IoT will need to be fueled by real-world examples showing the benefits of automating tasks and processes within IT and in other sectors. Within the SMB community, we expect sporadic implementation and a lack of concerted effort towards creation of IoT strategy, even though IT suppliers will continue to push forward their solutions hoping to remain top-of-mind in order to claim leadership in this emerging space. Each IT supplier will create its own solution set causing decision and adoption inertia, despite the wave of innovation that we expect to see emerge from the smaller & more agile IoT providers that are able to more easily align IT expertise with real life solutions. Experienced consultants and system integrators in particular will hold sway in matching SMB adopters with suppliers.

3. IoT supplier success will be determined by ecosystem management
On the sell side, the rise of IoT will be accompanied by an intense wave of interest in ecosystem management. It is difficult to buy or sell a “box of IoT”, though providers will claim to provide complete solutions. Parenthetically, this constraint is not limited to IoT. While it is possible to sell a “box of cloud” under the right circumstances, only AWS really manages to do so. And while one can sell a “box of analytics”, the boxes themselves come in a lot of different shapes and sizes. To meet SMB and enterprise buy-side demand for IoT, sellers will assemble coalitions that provide the many products and services that comprise an IoT solution. This will make alliance management a key success factor in the marketplace. The last time alliances determined market leadership; SAP became the global standard in ERP. Niche value added reseller may find a new source of success in IoT.

4. Business transformation will continue to elude analytics users
Analytics users will find that they are not achieving the expected benefits, prompting divergent responses. Some SMBs will find that analytics has not been transformative, and will blame the technology; others will look to move past descriptive and diagnostic views, piloting predictive or prescriptive initiatives. One of these responses is clearly more sensible than the other, but that does not mean it will be universal, at least in 2016. Focus on visualization will increase (mine is better than yours), on how the technology can solve business issues and challenges for SMBs and midmarket customers. Simplified implementation of customer and social analytics will be key drivers of adoption.

5. “Hybrid” will be used more often in conjunction with “IT” than “cloud”
User organizations will accept the notion that their focus on cloud needs to evolve into a focus on hybrid IT, as firms realize that their platforms and management scope must encompass on and off-premise systems. Truthfully, there is still a lot of work to do in cloud adoption. But the nature of the discussion has changed from “what and how do we move to the cloud?” to “what do we do to build an integrated, manageable infrastructure?” In 2016, there will likely no longer be an infrastructure debate about use of cloud, but there will be an important emerging discussion around managing hybrid IT.

6. Collaboration will drive “silo” to the realm of four-letter words
Anywhere, anytime also means any type of collaboration. SMB & midmarket businesses will look for unified shared workspaces that allow employees to enter into the workspace from any entry point to work together, collaborate and interact. Collaboration solutions cannot be deployed on stand-alone platforms – they need to be viewed as a framework for integrating multiple capabilities, native to multiple applications.

December has traditionally served as the occasion for the publication of New Year forecasts. It’s understandable that we want to look ahead to the sources of opportunity that lie ahead. But in the business world, December also marks the beginning of the review season. And while detailed forecasts focus on the next twelve months, the planning horizon needs to look a little further, so that tactics provide support for business strategies, rather than simply delivering a series of course adjustments.

This is a two part blog article. The first part, below, reviews the predictions we made for 2015. Second part will focus on outlook for 2016 and for the longer term.

A look back – what was it we said was right around the corner, again?

Here are the issues we highlighted, “Ten predictions for 2015 – and five issues to keep an eye on for 2016 and beyond” and how we think we did in our prognostication.

The Top 10 for 2015

1. Hybrid arrives – not as a strategy but as the result of many discrete decisions

With the benefit of today’s perspective, we might fairly say that in 2015 and for several more years to come, a more apt description of hybrid is journey rather than destination. Digging into the detail, though, we believe our prediction that “an ability to manage hybrid infrastructure will become a key corporate IT requirement in 2015” has been borne out by the focus on tools and strategies (ranging from Docker to Agile) that we saw throughout the year. In Techaisle’ SMB Cloud adoption studies, there was a sense of growing ubiquity in the usage and plans for private, hybrid and public cloud. Use of hybrid cloud continued to increase as both a conscious strategy and as a reaction to use of both public and private resources within a single infrastructure; by the end of 2015, two-thirds of companies with 100-999 employees were using hybrid models.

2. Collaboration becomes a much bigger concept

In 2015, collaboration began to expand beyond file-sharing to become a necessary tool for driving decision-based agility, fostering innovation and extending customer intimacy. Collaboration is a process rather than a discrete outcome. Our key notion that collaboration “extends beyond the corporate staff (and as a result, beyond large enterprises) to include customers” clearly did reflect strategies and investments in 2015. Within the SMB segment collaboration is increasingly becoming a central component to virtually all business activities rather than a means to enable connections between discrete tasks. Other changes in this area will further reshape collaboration, but you’ll need to refer to the “forecast” part of the blog for that discussion.

3. Collabmobilicloud becomes a management reality

The core concept explained that despite vendor tendency towards defining collaboration, mobility and cloud as separate domains, both enterprise and SMB users have started viewing them as integrated components of business solutions. The user belief that collaboration, mobility and cloud should all be attributes of modern applications has become clearer, and even suppliers are starting to recognize the importance of an integrated collabmobilcloud approach.

Business decision makers (BDMs) are an intrinsic force in most midmarket organizations and are the primary decision makers in some high-growth technology areas, including collaboration, social media and analytics – meaning that increasingly, BDMs are ‘the boss of IT’. These BDMs view IT as a component of business processes, rather than as a stand-alone silo. Techaisle SMB & Midmarket Decision Authority data shows that twice as many BDMs as ITDMs (IT decision makers) in midmarket businesses say that it is critical for IT to understand how technology contributes to overall organizational success. These BDMs have specific objectives for technology usage, clear perspectives on adoption drivers and impediments, and tend to be influenced by information sources that are different from the inputs used by ITDMs.

This pressure from business managers leaves IT leaders scrambling to stretch limited budgets to meet seemingly limitless requirements, striving to deliver predictable, secure systems that respond to the increasingly varied needs of their business users and competitive environments. The growing divide between IT authority and responsibility, exacerbated by the fact that business perspectives on IT are shaped by information channels that are not part of the IT professional dialogue, has created an environment where businesses are struggling to develop the cohesion needed to promote or embrace new IT capabilities to achieve business objectives within existing IT and business process structures..

In a unique survey, Techaisle posed the same question, “expectation of associating business success factors to IT solutions” to both BDMs and ITDMs and probed to identify what each expected from the other. Techaisle data shows that BDMs tend to have higher expectations of IT; while business decision makers and technology decision makers are reasonably well aligned in some areas, there is a wide expectation gap in others, which may explain (at least to some extent) the continued proliferation of non-sanctioned, “shadow” IT.

The figure above provides a simplified view of differences between BDMs and ITDMs across several different factors. Although there is a tacit agreement that both business and IT management should understand business related success imperatives and should be able to associate IT solutions to achieving those objectives, closer examination of the data shows some important differences between the two groups:

• 53 percent of upper midmarket BDMs say that it is very critical for business success that ITDMs are able to identify and associate IT solutions with business efficiency, productivity & profitability. On the on the flip side, only 30% of IT executives in these upper midmarket businesses say that business executives should be able to associate IT solutions with business efficiency, productivity and profitability. Responsibility for delivery clearly rests with IT, and BDMs have very high expectations from ITDMs.
• Data also clearly shows that BDMs again have high expectations for support in using technology to build customer connections. Over 40 percent of BDMs believe that it is critical that IT has a grasp of solutions that enable beneficial customer & supplier interactions. In contrast, only 1/4th of ITDMs say that BDMs should have a grasp of such solutions.
• Employee productivity is an important aspect of business and in most cases businesses are expecting IT to understand and deploy core technology solutions to make employees more productive.
• Business process automation is an area where there is better alignment between IT and business. However, automation is a dominant need within the 100-499 employee size segment; nearly 40 percent of BDMs in the segment say that it is critical that IT can identify requirements for automation and associate IT solutions with these needs.
• Cross-organizational integration is recognized as being important by both BDMs and ITDMs in mid-size businesses: over 50 percent of both groups agree that it is critical for both business and IT to associate technology solutions with business demands. This is an area where both BDMs and ITDMs are fully aligned.

The trend towards increased BDM involvement in IT decisions is likely to accelerate further. BDMs are already active in shaping demand in core IT markets, and they are the dominant force in high-growth areas like collaboration, social media and business intelligence/analytics. ITDM and BDM divergence will continue and although there is cross-pollination they may as well continue to operate from different pods. Although it may be tempting to try to bring the various parties together, IT suppliers cannot successfully act as intra-corporate matchmakers: they have to come to grasp with the reality of selling to two different constituencies which have different expectations.