Central to any Digital Transformation strategy is meeting the needs of a new distributed workforce. Here, Karlton Gray, Channel Director, Schneider Electric, UK and Ireland, discusses changing business models, the need for real-time application availability, resilient connectivity, and why the surge in IoT devices is driving the growth of Edge computing and creating opportunities for channel partners.
For many years Digital Transformation has been a key focus for businesses, but during the past 18 months organisations efforts have accelerated, in some cases bringing about years of change in just a few months. Crucially, this shows no signs of slowing down. Research firm IDC forecasts that direct Digital Transformation (DX) investment growth between 2022 to 2024 will hit US$6.3 trillion – equating to 55% of all ICT investment by the end of 2024.
For the first time ever, we see that the majority of enterprise organisations (53%) have an enterprise-wide Digital Transformation strategy, a 42% increase from just two years ago. They recognise that their reliance on digital technology goes beyond keeping the lights on during the pandemic and now, their Digital Transformation initiatives can deliver a critical advantage in a disruptive and increasingly competitive market.
Calculating the cost of downtime
Central to any Digital Transformation strategy is meeting the needs of a new distributed workforce. Here, changing business models, the need for real-time application availability, resilient connectivity, and the surge in IoT devices is driving the growth of Edge computing. IDC, for example, estimates that businesses will deploy half of new IT infrastructure at the Edge by 2023.
As dependency on critical power and hybrid infrastructure grows, organisations are facing new challenges to their mission-critical systems. These include the need to be more sustainable, maintaining staff levels, using the cloud, or building out critical IT at the Edge.
At the same time, many customers are concerned about the resiliency of their infrastructure and the impact of failures upon their customer base. In the data centre sector especially, owners and operators have but one overriding requirement, which is availability. Recent research from the Uptime Institute notes that despite improving technology and better management processes, outages remain a major concern, with both the impact and cost of downtime increasing.
Power, in fact, remains the leading cause of outages, according to 43% of IT and data centre managers. However, software and IT configuration and network issues are gaining ground as a common cause of a major IT service outage. In fact, the Uptime Institute says the rise in outages caused by IT systems and network issues is due to the shift from siloed IT services running on dedicated, specialised equipment to an architecture in which more IT functions run on standard IT systems – often distributed or replicated across many sites.
Human error also continues to cause significant impacts, and with more critical technologies being deployed in remote locations, or at the Edge of networks – including schools, hospitals, retail stores and restaurants – it’s no longer possible to have IT service personnel at every location.
Mitigating failures
Calculating the impact of downtime can be complex, but in 2020, research from the Uptime Institute found that 40% of outages cost between US$100,000 and US$1 million, and 16% cost more than US$1 million.
For this reason, resilience remains one of the top management priorities when delivering Digital Transformation. IT managers especially understand that investment in reliable power protection systems not only reduce the risk of unplanned downtime, but safeguard applications and the reputation of their business.
Importantly, in its most recent survey, the Uptime Institute revealed that 76% of respondents believe downtime could be preventable with better management, processes or configuration. Moreover, according to IDC, 40% of end users plan to outsource their Edge initiatives, not least because business-critical Edge infrastructure is in many cases geographically distributed, difficult to manage without adequate resources and invariably requires real-time visibility.
Such are the demands and expectations placed on Edge infrastructure that it creates opportunities for partners to offer remote monitoring and management services of their customers’ physical infrastructure and deliver a managed power service that protects their most critical applications.
Customer challenges and channel business opportunities
Emerging digital services, such as these, overcome a number of key customer challenges, including the need for real-time visibility across distributed IT and critical power sites, and greater access to trained IT support. A managed power service, for example, could comprise managed services for power, cooling, IT and physical security assets, as well as on-site maintenance, replacement and support.
These emerging digital services models or managed power services (MPS), can provide a simple way for partners to address a new market requirement for backup power protection in remote edge sites, while offering expert IT support. Further, they enable channel partners to increase revenue by as much as 40% per transaction, as opposed to traditional hardware sales.
Another key consideration is cost. Delivering a MPS expertly designed around mission-critical IT not only bridges the skills gap, it reduces costs, in some cases by up to 59%. Without access to resilient power, diverse network connectivity and IT availability, any Digital Transformation strategy can quickly be derailed and all the more so without expert support. Interestingly, across the globe, the market spends only around 0.5% of its total IT budget protecting servers and storage with an uninterruptible power supply (UPS). A small investment, when you consider the true cost of downtime.
A new era for partners
Digital Transformation spending is long set to continue, but with the cost of downtime reaching in excess of US$1 million per outage, customers should not only be investing in intelligent power protection and remote management software but should be looking to partners as expert support functions.
For channel organisations focused only on revenue and sales, the future looks bleak. But for those looking to take a step further and offer consultative services to customers, the opportunities are many and the numbers are in the data.
Right now, more than three quarters of end-users believe that downtime is preventable with better management, training, and processes. One might say there has never been a better time for partners to embrace new digital service models, to establish new recurring revenue streams and to add value to their customers. The demand is there, resellers just need to know where to look.