IDC Keynote: The Seven Transformations IT Solution Providers Must Confront

The Seven Transformations IT Solution Providers Must Confront

Darren Bibby

Program Vice President, Channels and Alliances Research

@darrenbibby

@darrenbibby

© IDC Visit us at IDC.com and follow us on Twitter: @IDC 2

Evolution

or

Revolution

3

Photofinishing Retail

Film Manufacturing

Photofinishing Wholesale

Agx paper and chemicals

Camera retail Camera

Manufacturing Film retail

Memory Manufacturing

D-SLR Manufacturing

Photo Printers Manufacturing

Digital Camera Retail

Photo printers retail

Digital imaging software

Memory retail

Digital compact manufacturing

Rolled & Single use film mfg

Film camera retail

Imaging Industry Profits

http://www.telco2research.com/articles/BR_Silicon-valley-2012-money-moving-are-telcos_Full

1995 - $1.9B

2005 - $3.7B

http://www.telco2research.com/articles/BR_Silicon-valley-2012-money-moving-are-telcos_Full�













@darrenbibby

The Kodak Story On Top of the World Market leader for nearly 100 years 1976 – 90% market share in film “Kodak Moment” 1975 - Developed a Digital

Camera


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The Kodak Story Leading the Digital Revolution? Digital camera was quashed by the

powerful Film division 2003 – Fujifilm had 5000 digital

processing labs in USA Kodak had < 100


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The Kodak Story Strategic Responses: Discount Film Catch up in digital cameras Acquire Sterling Drug Create inkjet photo printer business Sue Everyone! Patent Trolling


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The Kodak Story And In the End… Bankruptcy Protection


@darrenbibby 8

0% 10% 20% 30% 40% 50% 60% 70% 80%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

CDSC Owning U.S. Households Smartphone U.S. Households

Imaging Industry – Digital Still Cameras

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Digital Camera Growth


USA WW

Digital Still -40.7% -30.2%

Interchangeable Lens -23.2% +3.1%

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Digital Camcorder Growth


USA WW

Traditional Camcorder -22.9% -51.2%

Point of View +34.5% +14.9%


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@darrenbibby





@darrenbibby

“There is no such thing as Sustainable Competitive Advantage anymore. Only Transient Competitive Advantage.” Rita Gunther McGrath, “The End of Competitive Advantage”


@darrenbibby


Darren Bibby


@darrenbibby

Partner Transformation FROM TO

Technology

Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition @darrenbibby

Partner Transformation: Technology FROM TO

Technology 2nd Platform 3rd Platform

Customer

Sales Motion

Time Horizon

Marketing

Activities




Customer

Sales Motion

Time Horizon

Marketing

Activities




Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

On-Prem to Cloud Software

$127B of Public IT Cloud Services Revenue by 2018

22.8% CAGR 5.5X IT Spending Growth

As of 2014, over 50% of buyer

firms have adopted some form of Cloud.

@darrenbibby



Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

From Servers to Services

IDC predicts that service providers will account for over 43% of total server shipments by 2017

By 2016, over 50% of compute, 70% of storage capacity will be installed in hyperscale data centers

@darrenbibby



Customer

Sales Motion

Time Horizon

Marketing

Activities

Competition

Cloud Consumption Model

70% of CIOs will embrace a “cloud first” strategy in 2016

By 2018, it is predicted that nearly 27% of all software revenue will be subscription based.

@darrenbibby

Partner Transformation: Customer FROM TO


Customer IT Business & IT

Sales Motion

Time Horizon

Marketing

Activities

Competition

By 2016, LOB executives will be directly involved in 80% of new IT investments

@darrenbibby




Sales Motion

Time Horizon

Marketing

Activities

Competition

CIO CMO

Now

Then

@darrenbibby




Sales Motion

Time Horizon

Marketing

Activities

Competition

FROM IT Complexity

TO Business Outcomes

@darrenbibby

Partner Transformation: Sales Motion FROM TO



Sales Motion Deal Relationship

Time Horizon

Marketing

Activities

Competition

Sell Use

Transaction

@darrenbibby

Partner Transformation: Time Horizon FROM TO




Time Horizon Short Term Long Term

Marketing

Activities

Competition

Typical Project Based Business

Typical Recurring Revenue Business






Marketing

Activities

Competition






Marketing

Activities







Marketing

Activities


“The stock market values companies with more regular cashflow more highly.”

Tim Worstall Forbes

June 18, 2013






Marketing

Activities


“Even if the revenues were the same, the costs the same, the profits the same, moving from a variable revenue stream such as upgrades to a more regular one as in subscriptions should boost the value of Adobe itself.”






Marketing

Activities







Marketing

Activities

Competition

Potential Valuation

Traditional Revenue Business

Recurring Revenue Business

Revenue Multiple 0.2 to 1.5 X 2 to 6 X

EBITDA Multiple 2 to 2.5 X 5 to 14 X

Source: IDC Partner Valuation Study 2014

“For the average sub $5 million a year VAR, it’s tough to get past three times EBITDA” Brent Twist, Encore Business Solutions

Partner Transformation: Marketing FROM TO





Marketing Traditional Digital

Activities

Competition

Internet

@darrenbibby

Partner Transformation: Activities FROM TO






Activities Resale Pro Services Services

Services Mgd Services Creating IP

Competition

Services to Creating IP

Professional to Managed Services

Resale to Services

@darrenbibby

Partner Transformation: Activities FROM TO








Competition

Resale to Services

Services to Creating IP

Professional to Managed Services

Gro

ss M

argi

n

@darrenbibby

Partner Transformation: Competition FROM TO








Competition Traditional Non-traditional









Competition Traditional Non-traditional @darrenbibby

@darrenbibby









Competition Traditional Non-traditional

“Culture eats strategy for breakfast.” Peter Drucker

Culture


Evolution

or

Revolution

@darrenbibby

@darrenbibby

“There is no such thing as Sustainable Competitive Advantage anymore. Only Transient Competitive Advantage.” Rita Gunther McGrath, “The End of Competitive Advantage”


@darrenbibby

@darrenbibby

“If you don’t like the feeling of change, You are going to like the feeling of irrelevance even less.” Darrin Nelson, Sirius Computer Solutions


@darrenbibby


Darren Bibby


@darrenbibby

Date post:	15-Jul-2015
Category:	Technology
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