Signs of the infrastructure apocalypse

By on

This article appeared in the November 2015 issue of CRN magazine.

Subscribe now

Signs of the infrastructure apocalypse

Talk about the end times. System integrators who made their money selling infrastructure to enterprise must feel like the world is turning upside down. The news last month that Dell, the value player, is acquiring enterprise icon EMC is nothing short of astounding. 

The largest-ever tech acquisition (US$67 billion) will build a juggernaut that must have HP shaking in its boots. You could hear it in their official response, as reported by the Guardian: “This is a real opportunity for HP”, wrote a representative in an unattributed statement. “Two of our largest competitors are attempting a highly distracting, multi-year merger, just as we are launching two new, focused companies.

The massive debt burden Dell and EMC are taking on undoubtedly means that they will have to radically reduce R&D, and integration inevitably will create disruption as they rationalise product portfolios, channel programs, and leadership.” 

Sounds pretty defensive to me. I can imagine HP’s board sticking pins into a voodoo doll of Michael Dell, wishing him all the fortune and success of the HP-Compaq merger.

Where does this leave EMC and Dell integrators? Suddenly, two channels will become one – top-tier resellers will need to compete for vendor leads and attention. Undoubtedly, things will become much worse for smaller players. With a longer list of bigger resellers above them, and fewer on-prem projects as enterprise cloud ramps up, they could indeed be living in end times. 

But if enterprise on-premise is getting tougher, enterprise cloud is no walk in the park, either. Accenture recently announced at Dreamforce that it had acquired Cloud Sherpas, one of the world’s largest and fastest-growing Google Apps consultancies (it also does Salesforce and ServiceNow). The ‘Big Four’ accounting firms are following suit with PwC and Deloitte taking up the banner to resell Google Apps to their thousands of clients. 

Google has assembled a killer toolset for enterprise, from low-cost email and productivity suite, industry-leading web analytics and IaaS and PaaS platforms. The Big Four are a brand new channel with a blue-chip reputation and a reach that spans SME to enterprise.

The emphasis on enterprise tech has switched from making sure the bloody thing stands upright to working out what you can do with it. The techie is second string to the business consultant who can talk workflows, processes and business outcomes.  This puts the tech-focused system integrators – the DiDatas of the world – on a collision course with PwC, Deloitte, EY and KPMG. 

Just in Australia, the Big Four are adding highly valuable skills by snapping up boutique players in analytics (C3 Business Solutions, Semphonic, Baseline Telematics, ISD Analytics), web and app development (Stamford Interactive, Intunity), Salesforce and SAP (Quattro, NXG), and security (First Point Global, SR7). 

The Big Four have made their money for decades by selling IP, not wiring boxes. This is their turf; they have the systems and corporate mindset to repackage and sell that IP with minimal effort, just as they do financial advice. 

The final sign of the apocalypse is Microsoft’s transformation from software maker to platform player. Ex-CEO Steve Ballmer would have been leaping about his living room when CEO Satya Nadella stepped up to the podium to give a keynote at Salesforce’s Dreamforce conference in September this year. 

Talk about a changing of the guard. In a bid to stay relevant to enterprises switching to the cloud, Microsoft is integrating Skype for Business and Office 365 with Salesforce. Microsoft clearly hopes for Skype to be a communications channel that binds the business world together much the same as its DOC and XLS formats did for Microsoft Office over the past two decades.  

The shift to cloud has been intensifying for years, and it is now that we have hit a tipping point. The apocalypse for enterprise hardware is here. The coming world brings new technology, new opportunity – and new competition.  

Sholto Macpherson is a journalist and commentator who covers emerging technology in cloud.

Copyright © CRN Australia. All rights reserved.
Tags:

Most Read Articles

You must be a registered member of CRN to post a comment.
| Register

Poll

Does the government do enough to procure from local IT providers?
Yes
No
View poll archive

Log In

Username / Email:
Password:
  |  Forgot your password?