What are the tech forces driving distribution in ASEAN?

Snapshot survey by Channel Asia outlines priorities of ACA Pacific, Crayon, Ingram Micro, Innovix Distribution, Synnex Metrodata and Tech Data
L-R: Lie Heng (Synnex Metrodata Indonesia); Florent Bellahsene (Crayon); Jaideep Malhotra (Tech Data); Mark Tan (Innovix Distribution); Francis Choo (Ingram Micro) and Craig Gledhill (ACA Pacific)

L-R: Lie Heng (Synnex Metrodata Indonesia); Florent Bellahsene (Crayon); Jaideep Malhotra (Tech Data); Mark Tan (Innovix Distribution); Francis Choo (Ingram Micro) and Craig Gledhill (ACA Pacific)

Distributors in ASEAN will differentiate across core technology segments such as cloud, security and data in 2020, delivered as-a-service amid a changing channel ecosystem.

That’s the view of six leading distributors in Southeast Asia, outlining key priorities for the year ahead following a snapshot survey by Channel Asia.

The distributors profiled represent the entire supply chain across the region, spanning hardware, software and specialist capabilities, ranging from mainstream to niche providers with presence in Singapore, Malaysia and Indonesia, alongside the Philippines, Thailand and Vietnam among others.

In response to the question - what's the next opportunity for channel partners in ASEAN? - here’s how the experts see the market shaping up during the months and years ahead.

Cloud-centric channel

With organisations in ASEAN now on board and now investing, cloud has moved past the hype and into the mainstream, creating new opportunities for the channel as a result.

“Cloud adoption is growing at an exponential rate albeit being low at the beginning,” observed Francis Choo, vice president and chief executive of ASEAN and Hong Kong at Ingram Micro. “One thing is for sure: cloud is real, and is here to stay. Partners should embrace the transformation and jump on this opportunity and ramp up their cloud offerings and capabilities.

“Cloud solutions provide the flexibility and cost-effectiveness that businesses need in today’s market. The growth in variety, complexity and integration of cloud and hybrid business needs offers vast opportunities for cloud service providers who have the expertise to offer this to customers.”

Moving into 2020, Choo said partners should be in “no doubt” that the technology industry will continue to be “volatile, uncertain, complex and ambiguous”.

“But that also means plenty of opportunities to capture providing partners invest carefully in the right tools and talents,” he added.

Meanwhile, Mark Tan - managing director of Innovix Distribution - acknowledged that customer preference in terms of public cloud, private cloud, multi-cloud and hybrid cloud is driven by “price, preference and data sovereignty or residency strategies”.

“This is alongside any other additional values that cloud vendors can provide,” he explained. “A cloud management platform may become essential for users to be able to clearly and efficiently manage their data within these clouds.”

Speaking as president of Asia Pacific at Tech Data, Jaideep Malhotra reported a “momentum boost” for public cloud growth across the region.

“Customer workloads are well beyond lift and shift with the market leveraging cloud for innovation and transformation across the digital enterprise,” he added. “There will be pockets of opportunity across application modernisation, DevOps, workload optimisation and software-as-a-service [SaaS].

“For our partners that play in the infrastructure-as-a-service [IaaS] space, we recommend adding skills and capabilities that cater to advanced workloads and architect redesign to optimise for cloud.”

According to Florent Bellahsene - vice president of Asia Pacific at Crayon - technology is beginning to shape “how we live our lives” but there remains “some way to go” before it becomes accessible for everyone.

“Cloud, or as-a-service offerings, are democratising technology and are going to impact every aspect of the channel business,” he said. “As a result, the ways of engagement for an IT channel needs to evolve and go digital.

“For partners to thrive in this age of constant digital evolution, the channel will have to be one step ahead. Channel partners must understand the data and insights about cloud and customer consumption and usage to adapt their offers, services and profits.

“We often think about solutions, investments in services and technologies but we also believe that channel partners need to look for profitability as well and maintain it.”

Operating as a specialist distributor for more than 30 years across Asia Pacific, ACA Pacific has focused on transforming in alignment with the evolution of cloud locally, creating a new-look go-to-market strategy in the process.

“We select and integrate ‘best-of-breed’ offerings to meet changing business dynamics,” explained Craig Gledhill, CEO of ACA Pacific. “Our cloud offerings include solutions in artificial intelligence [AI], business transformation, next-generation data centre and cyber security.

“In line with the transformation of our offerings and moving towards providing leading edge solutions, we have also focused on training our sales and engineering staff on new technologies so that we can provide our partners with the best service and support in the industry.”

Smart tech

Taking the conversation further, Lie Heng - director of Synnex Metrodata Indonesia - identified a range of new technologies capable of distributing the traditional channel ecosystem, spanning Dev-Ops, 5G, Internet of Things (IoT), AI, big data, analytics and cloud,

“There’s value in developing IP or packaging IP solutions for system integrators as they move from selling products to selling solutions and moving towards managed service providers,” he outlined. “Dev-Ops is also a huge opportunity with the market expected to see an exodus of traditional applications and the rise of cloud native applications.

“With the majority of customers in ASEAN still running on-premises applications, many companies are evaluating application strategies. These are the core applications that need to be moved to the cloud by rewriting or migrating, meaning they must assess which apps to leave behind and how to adopt SaaS.”

For Lie Heng, the partner opportunity remains “phenomenal” due to the advancement of compute power and connectivity, which is now allowing businesses to leverage smarter AI technologies.

“With IoT also coming into the picture, the opportunity is huge with all the data generated by the sensors, especially the computer vision technology,” he added. “Hence technology from the edge, core and the cloud will need to be harnessed to reach full potential.

“And then we have security - the opportunity is getting bigger both for physical security and cyber security as the technology and attack points becoming complex and large. Not forgetting automation, as companies drive to become more efficient the opportunity is expanding both in the physical and virtual worlds."

Maintaining the data theme, Malhotra of Tech Data said customers in ASEAN are continuing to "breakdown silos" and therefore require solutions capable of managing "vast volumes of data".

“Particularity in the areas of analytics, machine learning and AI,” he said. “Demand for data virtualisation, data cataloguing and hybrid cloud data integration solutions will increase to manage this formidable amount of data.

“The sweet spot will be partners who can leverage their current data management capabilities and build a roadmap towards advanced engineering, infusing AI and analytics to enhance their next-generation offerings.”

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With “huge volumes” of unstructured data in the current digital world, Choo of Ingram Micro emphasised the importance of businesses adopting a defined workflow of data collection, backed up by enhanced security and protection through “cleansing, crunching, utilisation and storage”.

“With the increasing accessibility of AI and analytics tools, partners should not only provide storage of data, but also leverage on that data to mind key insights with actionable business directions,” Choo added.

Security

Smart technology presents new security challenges however, as cyber attacks increase in scale and ambition.

Today, hackers are managing to squeeze through the smallest of security vulnerabilities causing maximum damage, creating heightened levels of customer concern across Southeast Asia.

“With cyber criminals utilising AI and big data to go about their means, it is crucial that cyber protection becomes a key part of the customers’ installation,” said Tan of Innovix. “Most SME customers would not be able to afford sophisticated and manned security technologies to protect their infrastructure, network and cloud.

“Opportunities exist for channel partners to protect their customers’ from cyber threats. Partners should therefore start integrating and offering security services through the infrastructure, network and cloud."

According to IDC, worldwide spending on security-related hardware, software and services is forecast to reach $103.1 billion in 2019, representing an increase of 9.4 per cent compared to 2018.

Such pace is expected to continue over the coming years as multiple sectors increase investment in security solutions, in response to a rise in cyber attacks.

“The security landscape is changing rapidly, and organisations continue to struggle to maintain their own in-house security solutions and staff,” said Martha Vazquez, senior research analyst, IDC.

Consequently, Vazquez said organisations are turning to managed security service providers (MSSPs) to deliver a “wide span” of security capabilities and consulting services.

“These include predicative threat intelligence and advanced detection and analysis expertise that are necessary to overcome the security challenges happening today as well as prepare organisations against future attacks,” Vazquez explained.

Specifically, managed security services will represent the largest technology category in 2019 with customers spending more than $21 billion for around-the-clock monitoring and management of security operations centres.

Of note to partners, demand is also increasing for network security hardware, which includes unified threat management, firewalls, and intrusion detection and prevention technologies, alongside integration services and endpoint security software.

Delving deeper, Choo of Ingram Micro said for businesses of all sizes, "it is not a question of whether you will have a security breach or not, but when it will occur".

“Data is becoming more pervasive with the rising number of endpoints and with businesses moving to a hybrid multi-cloud model, the level of risk exposure is increasing inevitably,” he cautioned. “Businesses need to protect and ensure adherence to regulations and policies on multiple levels.

“Partners can play a key role in not only the solution offerings, but also through providing professional services in terms of education, consultation and managed services.

"Ingram Micro will continue to play our role as a solution aggregator and trusted advisor to our partners to continue maximising their core strengths, developing new capabilities and offerings to meet their customers’ needs in this transformational journey.”

Dismantling the data centre

In swinging open the doors of the data centre, a new market reality is emerging across Southeast Asia. Battered, bruised and blind-sided by new and emerging technologies, businesses are turning to the channel to rebuild infrastructure strategies in the pursuit of innovation.

Looking forward, spending on data centre systems is expected to increase, spanning servers, storage and network equipment.

But as the pace of business increases, demands placed on the data centre are changing at pace, with IT departments no longer required to merely keep the lights on.

“The ASEAN market presents some immense opportunities for channel partners, particularly in next-generation technologies like modernised data centres, cloud and analytics,” added Malhotra of Tech Data. “Data centre modernisation is being driven by the relentless pursuit of digital transformation and adoption of these multi-cloud application environments will continue to fuel growth.

“At Tech Data, we see opportunities in the transformation of traditional data centres to new age, next-generation data centres which adopt software-defined infrastructure, hybrid cloud, hyper-converged infrastructure, flash and containerisation.”

With this, Malhotra said the channel will also see further adoption of open-source software including big data, IoT, DevOps and micro-services applications to support both traditional and new workloads.

“Our ecosystem is rapidly maturing from a digital perspective meaning businesses need to accelerate and evolve to remain ahead,” he concluded. “Tech Data is strategically investing in our channels ecosystem, training and enabling our partners so they can drive next-generation transformation and opportunities.

"Looking ahead, collaborative go-to-market strategies will be the new norm. Customer-driven, premium solution stacks and marketing services engines will be key to success.

"With the ever the growing complexity in the market, partners need a distribution partner who can aggregate these complex next-gen solutions and take them to the next era of IT."