Where the channel is investing in 2009

Many of the current trends in IT spending favor open source and SaaS because they allow enterprises to take minibites of technology.

I'm at a Red Hat channel event, listening to Toni Clayton-Hine, managing director of The Institute for Partner Education & Development at CMP Media, talk through software acquisitions in the recessionary economy, especially as it pertains to business partners (resellers, system integrators, etc.).

CMP Media surveyed 250 North American partners to try to get a read on their customers' spending priorities and directions, as well as channel priorities for 2009.

The data are interesting:

  • Economic uncertainty is pushing companies to prove technology before buying it, which skews toward open source, which is all about trying before buying;
  • There are fewer trusted options. Many vendors meet or exceed requirements, so buyers want to spend with brands they trust. (Note: Ironically, the "try before you buy" mentality will not always mesh well with this requirement, due to conflicting licensing models);
  • End customers are planning smaller initial projects, with incremental add-ons. (Advantage: open source and SaaS, since both allow vendors to start small and grow organically);
  • Forty-eight percent of end customers are looking to streamline business processes, rather than endure pure cost cuts. Basically, they want to spend money more efficiently, rather than simply cutting heads;
  • Where End Customers Plan to Spend Budget
  • Seventy-five percent of end customers are buying some version of managed services, but the definition of "managed services" is quite broad;
  • Twenty-seven percent of channel partners expect to grow their business by more than 15 percent, 40 percent expect to grow their business by 5 percent to 15 percent, and 24 percent plan no changes, suggesting that IT spending may not crater as much as expected in 2009;
  • Partners are four times as likely to introduce new technologies, or upgrade or refresh current infrastructure to existing clients than target new customers or markets. The "new technology" is not so much a technology-driven sale ("I've gotta have Widget X") so much as a solution sale ("I just opened a new office and need to expand VoIP to that office"). In other words, business partners are seeking ways to increase their value to their existing base, rather than attracting new customers, which only 6 percent indicated as a 2009 priority.
  • Twenty-seven percent of business partners expect to be increasingly service-oriented, while 37 percent plan a mixture of reselling (e.g., CDW/Ingram) and service orientation.

Also interesting is to see where business partners expect to focus so as to drive revenue in 2009:

2009 Forecasted Sales Focus CMP Media

The takeaway? Money will still be spent in 2009, but more strategically. Technology needs to prove itself first, and buyers will likely flee to the safety of established vendors or partners. This makes me wonder whether the Accentures, and SAICs of the world will finally start to adopt and promote open source more heavily in 2009, given that customers will be demanding software that meets its characteristics?

Tags:
Tech Culture
About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

    Join the discussion

    Conversation powered by Livefyre

    Show Comments Hide Comments
    Latest Galleries from CNET
    Nissan gives new Murano bold style (pictures)
    Top great space moments in 2014 (pictures)
    This is it: The Audiophiliac's top in-ear headphones of 2014 (pictures)
    ZTE's wallet-friendly Grand X (pictures)
    Lenovo reprises clever design for the Yoga Tablet 2 (Pictures)
    Top-rated reviews of the week (pictures)