Plans to better support and aid partners in identifying the right services to launch
To redouble focus and investment on key Asia Pacific markets region in 2014
ASK Parallels’ vice president of Asia Pacific David Dzienciol (pic) about what the company’s game plan is for the region in the next 12 months, and he points to the partner ecosystem as part of the answer.
“We have a mixed bag of partners at the moment,” he told Digital News Asia (DNA) on the sidelines of World Hosting Day Asia which took place last month in Singapore.
“While some are doing great, some did not do as good as they projected, and we are working with them to better enable their cloud services offerings,” he added.
The focus on its partners is in line with the role the virtualisation technology company sees itself playing within the ecosystem – offering the technology platform upon which partners can offer value-added services to their own customers.
It also follows the release of the company’s latest Asia Pacific SMB Cloud Insights report, which highlighted that the market opportunity for small and medium-sized businesses (SMBs) in Asia Pacific is estimated to be US$10.9 billion.
Out of the estimated total, Infrastructure-as-a-Service (IaaS) contributes US$3.7 billion, while web presence and web applications contribute US$2.3 billion.
Hosted communication and collaboration (composed of hosted premium email and hosted private branch exchange or PBX) adds US$937 million, while business applications account for the remaining US$3.8 million.
When asked which markets in particular he sees Parallels partners doing well, Dzienciol identified Indonesia, Thailand, Vietnam and India.
“We are expecting double-digit growth in these markets, and in mature and somewhat saturated markets such as Singapore, we are still seeing growth and success but the competition is tougher,” he said.
Dzienciol said that this year, the company expanded its presence in Indonesia and Vietnam and in 2014, intends to “double down,” figuratively speaking, on its investment in these markets.
The coming year will also see Parallels refocus its efforts in the Thai market along with additional emphasis on the Philippines.
The moves are in line with the company’s broader aim to better enable and aid its partners to leverage the business opportunities to be had in the SMB cloud services space.
Dzienciol said that similar to selling products in the traditional software space, in the cloud services business, you don’t want to pre-commit to subscription-based software only to have it sit on the virtual shelf.
He added that with some partner providers, it is churn or internal challenges that are prohibiting growth; while in other cases, the company does see revenue coming in, but not necessarily growth.
When asked how Parallels has fared in the past year, Dzienciol declined to share actual figures, but claimed that in terms of revenue, the region has met expectations and grown. In terms of headcount and investment into individual markets, it has grown these from 10% to 50%.
“But it’s not about increasing headcount – I don’t want to hire a hundred more staff. Getting more partners is better; I need to recruit a hundred great partners into the ecosystem,” he said.
One such partner is Telin Singapore, a member of PT Telkom Indonesia Group, Indonesia’s largest telecommunication and network services provider.
In an announcement made during World Hosting Day Asia, Telin Singapore said it would leverage the Parallels Automation platform, a hosting and cloud services delivery system, for its data centre operations in Changi to expand its cloud offerings for various hosting providers in Singapore and the region.
The partner potential
According to analyst Abhilash Pillai, partners and providers of hosted solutions have evolved over last couple of years in terms of understanding the business and technology priorities of SMBs in this region, and addressing these with the right technology propositions.
Abhilash is senior manager of Asia Pacific market analysis and client services at AMI Partners, a strategy consultancy firm specialising in the SMB segment. In an email interview with DNA, he outlined three key drivers for this shift, with the first being the strong dependency of SMBs on external partners.
“Unmanaged ICT environments are a key distinguishing feature of small businesses in South-East Asia, with a quarter of them having no formal ICT resource, or a contract in place with a service provider.
“With an average of only one to four permanent IT staff, SMBs always need to reach to external partners to adopt new technologies, upgrade existing or resolve any technology problem,” he said.
The second driver is due to the shift in business priorities. With economic and competition pressures rising, business decision-makers are turning to IT managers and partners to adopt solutions that will enable their businesses to reduce operational inefficiencies across business functions and maximise productivity.
“The partners, who are already in conversation with SMBs, understand their needs and make use of their association with key vendors like Parallels to address those priorities,” Abhilash said.
The last driver is profitability, with partners realising that to stay ahead in this space, they need to differentiate themselves from larger counterparts by offering meaningful solutions integration, customisation and managed services.
“The discussions with successful Parallels’ partners on how they compete against the bundled offerings from telecom service providers in the region is a perfect example of this,” Abhilash said.
One such area of differentiation, according to Parallels’ Dzienciol, lies in security, with the topic currently a hot-button issue and cause for concern for many organisations.
“We believe heavily that the cloud can be secure, with more and more innovative companies coming out with ways to make it secure as a service,” he said.
Dzienciol believes that there are opportunities for service providers in Asia Pacific to lead with security as a differentiator, to say “we can ensure that you have greater data security and contribute to compliance with data sovereignty concerns and laws.”
“I think service providers that use that as a differentiator could do very well; it’s not a sexy differentiator but it is a powerful one. Certainly against bigger international players that can’t lead with that as their core differentiator,” he added.
Abhilash noted that business and technology decision-makers at SMBs expect their partners to rise to the role of IT consultants, rather than just product and service sellers.
“Conversations that start from business priorities and technology challenges, followed by recommended IT solutions to address those, will have higher chances of ending up as winning deals,” he said.
In the case of larger operator partners, Dzienciol said that Parallels does offer a consultancy service as a value-add to its partners, but stressed that it is not a business that it is keen to move seriously into.
For a large organisation, launching an automation platform can be quite challenging as the existing business still needs to keep running while the migration of information and addition of new services with the window for launch sometimes moving.
“The focus in the coming months is to spend more time on being ‘alive’ and just live. Via research conducted and other factors, we intend to help partners understand what services are going to generate the greatest impact in a shorter time,” he said.
The tendency to favour a launch of dozens of new services at once may not always be the best approach.
“The belief is that ‘more is better’ but when you get down to it, how many services are really needed on day one? With a phased approach, to get a better hold of the business early on, maybe launch eight to ten services, which will do 90% of revenue,” he said.
Dzienciol noted that focus should be on quality over quantity and identifying the right services to offer in an effective way, something that Parallels hopes to offer insight into, on virtue of its experience in the space.
“It’s not about telling you about your business and how to do it, but rather, by mitigating via an outside person with experience, you can take advantage of best practices and integrate them with your own processes and launch quicker,” he added.
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