Time to Realign?
A modest single digit growth rate (oscillating between 6-7%) may not be causing havoc among India Inc. at present but the truth is that the signs of worry are clearly visible.
The revised and lowered projection for industrial output, growing fear of another meltdown and cap on non-critical spend – all put together – is not a good news for the IT industry. While the large technology vendors are busy realigning their strategies to offer competitive and suitable options in the market, there is a need for Indian SMEs to act quickly.
Even though the enterprise expenditure on IT doesn’t change overnight, there will be a decisive shift in ways technology will be consumed in the future.
A close study of various researches done by credible agencies collectively point towards the following five key trends:
1. Growing resistance to work with Capex model (Opex is more suitable)
2. Outsourcing will grow and become an essential part of end-user IT roadmaps
3. Mobile technologies will be more pervasive replacing the current information access and computing models
4. A highly virtualized and consolidated IT infrastructure will replace the current fragmented and unstructured infrastructure.
5. Governance, risk and compliance (GRC) will take the center stage to pave the way for secured, resilient information architecture.
If many of the above trends are to be believed, the technology vendors (specially the SMEs) have no other way but to realign their strategies to go to market. They will have to look for alternatives to replace their current methods of engagements.
I may sound prescriptive but the following three changes in your strategy can help make you a strong contender:
(A) Partner your customer: Your days as a seller of point products are over. Commoditization of technology has changed the way technology was sold a few years ago. You should stop selling products. If you want to create a larger funnel in the client organization, work on creating a relationship. Partner with your customers. Be part of their technology roadmap. Offer them solutions on an Opex model rather than selling point solutions. Target to take out smaller, non-critical portions of their IT and offer them as services.
(B) Grow and diversify your portfolio: Since mobility and virtualization (and Cloud as the extension of virtualization) are the new buzzwords, catch up with them. You must plan to offer your clients solutions in those spaces. Don’t waste time to invent a product. The best way is to look for players with whom you can collaborate with and innovate on the existing products to offer something that fits the bill.
(C) Create capacity internally: As mentioned above, outsourcing is going to be a key trend. It can be a game changer for you as well. This calls for creating/augmenting your capacity internally to offer services to your clients/customers. E.g. if you were offering storage/server products to your clients, there is no harm in creating small data centers where the clients can host/collocate their services. Offer smaller things like SOCs (Security Operation Centers) NOCs (Network Operation Centers) to the smaller enterprises who can’t afford to reach out to the biggies.
If you think on these lines, the dampened economic scenario might come across as an opportunity for you else the days of traditional ways of doing business will soon be over. Think!