As customers across Southeast Asia adjust to the economic realities of Covid-19 – and plan for future growth – business transformation plans are once again dominating boardroom agendas.
Following the initial ‘respond’ and ‘adapt’ phases, organisations are now moving beyond recovery mode to accelerate innovation efforts, motivated by a desire to embrace digitalisation at speed and scale.
Such a shift places the channel at the centre of industry change, heightening demand for partners capable of shaping technology strategies, operational processes and business model frameworks in the months ahead.
“Businesses are transforming for the future state,” observed Uma Thana Balasingam, vice president of Partner and Commercial Organisation across Asia Pacific and Japan (APJ) at VMware.
“The fundamental shift to a truly digital workforce is already underway. The provision of seamless access to the systems, tools and applications that are productive, collaborative and can be accessed securely rank high as leading IT team priorities.”
As outlined by Balasingam during the Channel Asia Executive Forum, such a shift has triggered a new form of customer experience, an experience far removed from pre-pandemic expectations.
“Every company that is adapting to the new world has adapted to a digital customer experience,” she added. “The shift has also affected the way we think about security. We now need to secure company data with a highly distributed remote workforce and secure customer data with a new digital-first customer approach.”
According to Accenture findings, 76 per cent of CEOs believe their business models will be unrecognisable within five years.
“And the core driver of that is ecosystems,” Balasingam outlined. “What that translates to is that the ecosystem is no longer linear. It is no longer just a transaction state. It is going to be how ecosystems come together to bring lifecycle value and help business models transform and evolve.”
In short, the channel is now operating at the beating heart of an “experience economy” with more than 60 per cent of organisations – according to IDC findings – expected to increase reliance on trusted advisors to inform decision making, backed by a “proven ability” to deliver outcome focused experience.
“The mindshare capture of our customers becomes very important as end-users look for guidance and rely on expertise,” Balasingam said. “As we think about digital transformation, we are already in a state globally that 30 per cent of existing projects require more than two partners to be engaged, partnering together.
“And without some type of orchestration, that will be challenging. This is a trend we believe is going to continue.”
Added to the fact that customers across Southeast Asia are now consuming solutions on an as-a-service basis, technology has evolved into an essential catalyst and accelerant to strengthen businesses.
“This presents a tremendous opportunity for our partners,” Balasingam advised. “With the shifting paradigm of customer success coming into play, for our partners to achieve next-level customer success in 2021 and beyond, they must customise and expand their services and value throughout the customer lifecycle. This will not only accelerate their stickiness with the customer but also their profitability.”
Meeting customer demand
According to newly released Channel Asia research – outlined during State of Innovation – key customer priorities from a business perspective across Southeast Asia centre around developing new products and services; lowering costs while improving efficiency and surviving the current economic and social situation.
Translated into technology, end-users are prioritising infrastructure and application modernisation, in addition to enhancing security, governance, risk and compliance capabilities amid wide-scale digitisation plans. Specifically – and to echo Balasingam’s market observations – investment plans rank digital transformation as the leading agenda item, followed by security, cloud migration and app modernisation projects.
Such a shift in focus is expected to result in 59 per cent of local CIOs experiencing a budget increase of 10 per cent or more during the next 12 months.
“With the increasing number of organisations embarking on their transformation journey, we foresee even more customers grappling with the complexities of solutions and methodology in the current software-defined world,” observed Nick Wakai, CEO of Singapore at NTT.
Through a platform-based services approach, the global system integrator (GSI) delivers outcome-based solutions with “agility and scalability”. This is supported by a standard architecture which enables accelerated deployment of solutions and services using automated containers or script.
“Our portfolio of agile, scalable service offerings covering digital applications, next-generation data centre infrastructure, networks, security, collaboration, customer experience and end-user computing environments simplifies the management of day-to-day operations, across multi-vendor hybrid IT environments,” Wakai added. “This in turn reduces the time and complexity to deploy resulting in cost savings.”
Building on NTT’s market approach, Fan Qu – director of Channels and Alliances across Southeast Asia and Korea at VMware – cited increased demand for “ faster, seamless and secure digital services” in a move designed to strengthen resilience and boost innovation at enterprise levels.
“In relation to services, partners are focused on building skills that shorten the time to value for customers,” he added. “This means faster migration to cloud or any modernised platform and faster consumption of services, cloud and software-as-a-service [SaaS] which allows organisations the versatility and ease of accessibility to digital technologies.”
In assessing the outsourcing landscape across Southeast Asia – and according to Channel Asia findings – 57 per cent of customers are set to increase project work during the months ahead, supported by an increased focus on services (66 per cent).
Within this context, 35 per cent of businesses have set aside increased budget for external partners with security, cloud migration, data management and customer experience skills in most demand.
“We are focusing on ‘running’ and ‘managing’ infrastructure in hybrid and multi-cloud environments based on application network and network security skills,” added Kyu-Heon Song, CEO of Seoul-based Openbase.
“Our customers are transforming and embracing a hybrid environment and security solutions are also evolving to cloud security solutions which is basically a subscription-based business model. Therefore, we see network, security and hybrid and multi-cloud environments as the big bets to accelerate growth in 2021.”
Responding to transformation
With the direction of technology travel clear, partners must also progress from an engagement standpoint in recognition that customers are moving away from transactional selling.
Evidenced via Channel Asia findings, organisations are now aligning with the ecosystem based on specific criteria, starting with a fundamental understanding of the business. This is closely followed by a desire to leverage deepened levels of expertise – highlighted by a sharp rise in VMware partner up-skilling during the pandemic – and an ability to provide ‘end-to-end’ solutions.
“We need to unlearn some of the traditional ways of selling and transform our internal workforce to focus on standard architecture design and automation,” acknowledged Wakai of NTT. “We put our clients at the centre of everything we do.
“The importance of our partners ecosystem whom we collaborate with is also essential in complementing our internal skills and abstract complexity in rolling out our extensive service offerings to the market.”
From offering new products and solutions to adopting different go-to-market strategies within the context of SaaS, Qu of VMware acknowledged that the partner ecosystem is evolving operating models to increase alignment with customer buying patterns.
“The shift to customer lifecycles is also driving organisational transformation as partners prioritise building deeper and more strategic alliances with customers,” he explained. “This evolved approach takes a 360 view of customer success.”
Instead of point product sales and services, partners must now enhance advisory and consultation services while streamlining migration and implementation processes to support end-users, backed by an increased focus on application development.
“In this environment, subscription-based and SaaS will be the go-to business models for partners as customers look for more flexibility to optimise and scale business operations, while reducing operating costs,” Qu said.
Driving partner enablement
In response to customers seeking increased flexibility to innovate at speed and scale, VMware is also pivoting to drive enhanced levels of channel enablement through a partner coverage and services approach.
“We’re working closely with our existing partners to transform in the cloud and build practices around Build, Run, Manage, Secure and Connect,” added Qu, in reference to partner coverage capabilities. “Additionally, we have stepped up on our partner recruitment strategy in the areas of security, app modernisation and multi-cloud to help providers build VMware practices.”
Delving deeper, VMware in Southeast Asia has also obtained 100 Master Services Competencies (MSC) – with most partners securing more than two – which represents the highest return in APJ.
More broadly speaking across the region, the vendor has invested more than $1 million in training and enablement programs resulting in over 500 partner engineers becoming enabled and certified. This is alongside co-investing with partners and distributors in technical resources for VMware Certified Advanced Professional (VCAP), cited as one of the most popular levels of certification.
“As we adapt to the cloud-first environment, we recognise that developing and strengthening our region’s innovation ecosystem can not only help our partners resell a VMware solution but also orchestrate solutions and build modern applications with our platforms,” Qu summarised.
“We must continue to empower our partners and customers with solutions that further support their business growth and enable seamless and secure operations for their future ready workforce.”
This Channel Asia Executive Forum was in association with VMware.