idc partners of the future

Partner of the Future: 10 Transformations IT Partners Must Make in the Digital Transformation

Accelerating Digital Transformation in Latin America:

November 22, 2016

The AgendaThe successful partner of 2020 will look entirelydifferent from the successful partner of 2016,". Thispresentation lays out a framework of 10transformations that IT Partners have to address inthe years ahead to be successful — or, in effect, tobe a "partner of the future

Partner of the Future: 10 Transformations IT Partners Must Make in the Digital Transformation

Technology

Focus

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Alliances

Advantage

Source: IDC, 2016

2nd Platform 3rd Platform

Technology

Focus

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Alliances

Advantage

TECHNOLOGY

Past Future

Source: IDC Latin America Server and Software Tracker, 2016

2010

59%

Servers Spending

12%

Power & Cooling

29%

Mgmt & Administration

$3.9B

0.68OPEX/CAPEX Ratio

2015

50%

Servers Spending

10%

Power & Cooling

40%


$3.8B

2019

42%

Servers Spending

9%

Power & Cooling

49%


$4.4B

1x

3x


Past Future

Source: IDC Latin America Cloud Services Tracker, 2015

4.1%

16.2%

60.7%

13.4%

5.6%5.4%

11.2%

55.1%

19.6%

8.7%

Not ConsideringCloud

Consolidation ofServer and Storage in

place

Virtualization:Consolidation + VM

management

Automation:Virtualization + VMManagement + self

provisioning

Cloud: Automatiom +pay per use + internet

acess

2014 2015

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

Market Forecast LA, MUSD Constant

IaaS PaaS SaaS

2014 2015 2016 2017


Past Future

Source: IDC Latin America and NEXSYS Survey, November 2016 n=39

Hardware, 29%

Software, 38%

IT Services, 32%

Cloud , 29%

Mobility Solutions ,

12%

Social Business Solutions , 6%

Big Data/Analytics , 11%

Traditional IT Solutions, 42%

Does your company offer….?

Technology

Focus

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Alliances

Advantage

FOCUS Broad Specialized

Past Future

Source: IDC Latin America New Buyer in Technology 2016 (n = 354 in Latin America)

11.10%

8.20%

24.1%

28.10%

28.90%

31.20%

7.2%

16.5%

28.6%

26.3%

27.1%

25.5%

Social

Big Data/BI/Data Analytics

ERP consolidation /…

Cloud Computing

Mobility

IT Consolidation/Virtualization

Top IT Priorities 2016

2016 2015

Source: IDC Latin America IT Investment Trends 2015 & 2016

Regardless of the IT investment decisions, the most effective attributes or actions by a vendor/partner are:

Knowledge on Industry needs 51%

Ability to deliver timely, within budget 49%

Timely & proper response 42%

Technology Expertise 15%

Familiarity to LOB, w/former purchase 15%

Listens to concerns and looks for best solutions 11%

Technology

Focus

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Alliances

Advantage

CUSTOMER IT Business and IT

Past Future

11.10%

8.20%

24.1%

28.10%

28.90%

31.20%

7.2%

16.5%

28.6%

26.3%

27.1%

25.5%

Social

Big Data/BI/Data Analytics

ERP consolidation /…

Cloud Computing

Mobility

IT Consolidation/Virtualization

Top IT Priorities 2016

2016 2015


IT Business and IT

Past Future

CFO , 21.90%

CIO , 37.50%CISO , 6.30%

CEO , 6.30%

COO , 3.10%

CMO , 9.40%

Other, 15.60%


New Buyers in technology: key or primary contact

Technology

Focus

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Alliances

Advantage

SALES MOTION Deal Relationship

Past Future

SellTransaction

TransactionUse

IT Department - strategic for evaluation and decisions through the organization. LOBs play a larger role in decisions.

0% 10% 20% 30% 40% 50%

5. IT & LOB work together…

4. IT & LOB evaluate…

3. IT & LOB evaluate…

2. IT evaluates, makes…

1. IT evaluates &…

IT Role in the Buying Process

CISO/CIO COO CMO CHRO CFO


Technology

Focus

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Alliances

Advantage

TIME HORIZON Short-term Long-term

Past Future

Macro Markets 2016* YoY Growth (%)

Project Oriented 7433,1 -14,8%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2014 2015 2016 2017 2018

LA Total Cloud Services Market, 2014 - 2018 MUSD Constant

Public Cloud Private Cloud Hybrid Cloud

2014 – 2018 CAGR 43.6%

2014 – 2018 CAGR 28.9%

2014 – 2018 CAGR 38.5%

Source: IDC Latin America Cloud Services Tracker, 2015

Technology

Focus

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Alliances

Advantage

MARKETING Traditional Digital

Past Future

Marketing/communication method % TYPE CFO CHRO CMO COO CIO/

CISO

Specific conferences related to LOB 45% TRADITIONAL

Active in industry chambers or associations 29% TRADITIONAL

Subscribed to special magazines 40% TRADITIONAL

Forum or conferences on general business 16% TRADITIONAL

Using on-line business communities 19% DIGITAL

Reading magazines- business sections or specific

columns27% TRADITIONAL

Studying a post-graduate course 19% TRADITIONAL

At courses developed by the Company 21% TRADITIONAL

Self-taught person - looking for new lessons or

courses by him/her21%

DIGITAL & TRADITIONAL

Turns to Industry leaders- industry analysts,

researchers, consultants12% TRADITIONAL

Reading specialized publications for my industry or

area of interest14%

DIGITAL & TRADITIONAL

Trend to Specific Business Role

Trend to raise both, Business Role & Digital Skills

Trend to raise their Digital Skills

Propensity to build their

Digital skills !


Traditional Digital

Past Future

EFFECTIVE MKTG/COMM METHODS CFO CHRO CMO COO CIO

1. Free Trial 31% 39% 40% 44% 36%

2. Product Demo 65% 65% 68% 69% 76%

3. Written Case Study of other successful deployments 28% 21% 33% 29% 37%

4. Product reviews published on line or in written material 34% 24% 30% 29% 25%

5. Self-assessment tools - Interactive tools such as ROI calculators

34% 18% 33% 25% 29%

6. Digital Interaction – Search in Blogs, Website, on line videos

29% 28% 16% 25% 20%

7. On line Magazines 12% 15% 16% 13% 19%

8. Subscription to specific on line communities 14% 10% 5% 6% 5%

9. Posts in Social networks – Facebook, twitter, LinkedIn 16% 12% 11% 15% 18%

10. Live Testimonials at events by vendors 18% 18% 28% 19% 15%

11. Vendors content and websites – streaming, infographics 19% 20% 18% 23% 29%

12. Advertising – at airports, business events, large signals 6% 2% 7% 0% 11%

13. Advertising on magazines, newspapers 8% 4% 12% 2% 10%

14. Promotions at special stores 5% 4% 7% 2% 6%

15. Others (specify) 0% 1% 0% 0% 0%

Product Demos and Free Trialas most effective for most ofthe LOBs

Success stories and publishedreviews influence in decisionsas proof points to Supportdecisions.

Self-assessment tools workwell for CHRO & CMO

1

2

3

Priority


Technology

Focus

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Alliances

Advantage

ACTIVITIES

ResalePro servicesServices

Past FutureServicesManaged servicesCreating IP

2014

Resale Revenue Ratios

2015

41% 53%

Hardware & Software Resale Revenue Ratios

H: 27% 12%S: 39% 58%

H: 35% 30%S: 21% 24%

H: 41% 45%S: 37% 37%

H: 54% 50%S: 25% 34%Solution

Provider

SI

Service Provider

ISV

2014 2015

Hardware44%

Software34%

Services22%

Hardware50%

Software27%

Services23%

IDC Infrastructure Channel Survey (2014 n=501; 2015 n=500)



2014 2015

59% 47%

Non-Resale Revenue Ratios

Increased value through:

1. Created services growth

2. IP development

3. Recurring revenue models

4. Exiting low value services

Product Creation

18%

Managed Services

24%

Cloud Services

8%

Support Services

23%

Professional Services

27%

Product Creation

23%

Managed Services

21%Cloud

Services10%

Support Services

19%

Professional Services

27%

Source: IDC Infrastructure Channel Survey (2014 n=501; 2015 n=500)



Cloud service provider ( a

provider of IT delivered as a service such as IaaS, PaaS and

SaaS) , 32%

Cloud Reseller (reseller/broker

of someone else's public

cloud services) , 36%

Cloud Consultant ,

18%

Cloud Builder (desing and

deploys private or public

infrastructure) , 14%

To response customer

demand, 25%

To improve our

profitability, 14%

To response to

competition, 10%

To increase or add recurring revenue, 19%

To increase our business growth rate,

26%

Because our major

software vendor has

moved in that direction, 6%

Why did your decide to start offering Cloud solutions? Which role(s) describe your Cloud services involvement today?


Technology

Focus

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Alliances

Advantage

COMPETITION Traditional Non-traditional

Past Future

Digital Transformation Made in Latin AmericaProduct

ResaleServices

Source: IDC Channel Taxonomy, 2013

Hybrid product/

resale

Hybridproduct/services

Value-added resellers

Logistics-orientedpartners

Services-orientedpartners

Product-orientedpartners

Technology

Focus

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Alliances

Advantage

ALLIANCESDo it Ourselves Partner Collaboration

Past Future

Source: IDC Latin America IoT Survey, October 2015

GOVERNMENT HEALTHCARE/PHARMA

RETAIL

FINANCE

MANUFACTURING

CONSTRUCTION/TRANSPORTATION/UTILITIES

PROFESSIONAL/BUSINESS SERVICES

OTHERS

What industrial internet company do you see as most likely to be the leader in the Internet of Things market?

Technology

Focus

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Alliances

Advantage

ADVANTAGE Comfortable Transient

Past Future

There is no such thing as SustainableCompetitive Advantage anymore

Only Transient Competitive Advantage.”

Comfortable Transient

Past Future

Market/customer demand, 12.50%

Vendor has best- in-class technology, 25.00%

Vendor has superior technical support,

15.60%

Vendor is easy to do business with, 21.90%

Vendor has a well-run partner program, 6.30%

Vendor has superior opportunities for services

revenue, 18.80%

Reasons to Choose Partnership with a Particular Vendor


Technology 2da Platform 3ra Platform

Focus Broad Specialized

Customer IT Business and IT

Sales Motion Deal Relationship

Time Horizon Short-term Long-Term

Marketing Traditional Digital

Activities ResalePro ServicesServices

ServicesManaged ServicesCreating IP

Competition Traditional Non-Traditional

Alliances Do it Ourselves Partner Collaboration

Advantage Comfortable Transient

Present Future

Partner of the Future

Partner of the Future: Creating Your Digital Pitch

Business Transformation Digital Transformation

1. CUSTOMER CONVERSATION

Business Process Automation & Transformation (Internal)

Innovation and Ecosystem (External)

2. CUSTOMERS KPIs Cost and Risk New Revenue Streams

3.TECHNOLOGY Applications Driven Digital Platform with Apps

4. DECISION MAKERS CFO and CIO COO, CFO, CMO, CIO and CEO

5. PARTNERS System Integrators (SIs)Digital Influencers (agencies, start-ups and digital SIs)

6. SALES MOTION Big Bang - Solution & ValueIterative - Use Cases & PoVCloud = Accelerator

7. COMPETITION Stack-players (Traditional) Born in the Cloud vendors

Vendors have less influence on the infrastructure channel than they did a year ago

Hardware as a ratio of resale revenue declined as software increased –resale & development partners most prominent.

Partners experience an increase in non-resale as a ratio of total revenue, and growing share value of created products and cloud services.

Product creation share increased for all partners but ISVs where created services grew.

More partners are engaged in cloud and growth across all cloud roles but

Key Take-a-Ways

Thank you

Alejandro Florean

Vice President Consulting

@alexflorean [email protected]