The Asia Pacific technology landscape six months into the year continues to be uncertain with growth uneven. For the channel community, the pandemic has changed assumptions about support business models, sales strategies, business planning and the ways channels are engaging with their customers.
For many, it has brought to surface a number of economic, operational, and strategic issues. While some channels have focussed on growth and new opportunities, the reverse is that the crisis has led to declining revenues, leading many to focus on business continuity and survival.
To hear from the ground, iTNews Asia interviews Lim Tsu Pheng, Chief Technology Officer at Logicalis Asia; Bong M. Paloma, Executive Vice-President, Technology, Sales and Marketing, Accent Micro Technologies from the Philippines; and Ajay Mohan, Business Director, Enfactum to find out how their organisations are balancing between growth and resiliency, and transitioning and adapting to new modes of delivery and engagement.
iTNews Asia: What has been the impact of the pandemic and how is your organisation adjusting to the new normal?
Tsu Pheng: We saw a sudden, exponential shift to remote work, that many businesses were not ready or equipped for at the time. The adoption of cloud services was higher than ever before. Businesses were scrambling to redesign their network infrastructure to enable connectivity for remote work. Speed and agility was key.
Now, as we start to settle into the new normal, businesses’ focus starts to change as well. Hybrid work is the future of work, where we see a mix of people working remotely and from the office. Businesses are starting to rationalise their public cloud investments as they become more conscious of how they should extract real business value from services.
Cybersecurity has taken centre stage as threats have multiplied during the pandemic, especially with a remote workforce and unmanaged devices.
With an increased investment in digital transformation, it comes with greater complexity and costs of management. This leaves some companies, especially the smaller ones at a loss, unsure how to start this journey.
We are shifting gears toward advisory services as our customers begin to rationalise their digital transformation strategy. We are also seeing an uptick in demand for managed services or technology life-cycle management as our customers are finding the technology complex and expensive to manage themselves.
- Lim Tsu Pheng, Chief Technology Officer at Logicalis Asia
We see 2021 as a transition year. Businesses can start to look forward to shaping their futures and thriving rather than just ‘getting-by’ in the present.
Paloma: The pandemic has both a negative and positive impact on our business. On the negative side, it made operations and servicing of our customers more expensive because we need to comply with strict health protocols when employees report for office and when our engineers are servicing our customers. We need to allocate an additional budget for anti-gen, PCR tests, PPEs, Alcohol, regular defogging, and sanitation of our offices. We also need to provide transportation for our engineers and other resources that are doing on-site visits.
On the positive side, we have fully realised the ROI of our early digital transformation investment when the government restricted movement and imposed lockdowns. We had to pivot and operate immediately in a distributed remote work setup.
The pandemic has accelerated the adoption of IT and digital transformation and there was a surge in demand for IT equipment, services, and infrastructure modernisation.
Mohan: The pandemic has had a feast and famine impact on the technology business over the last 18 months.
It has been a feast for XaaS, cloud and software businesses as they have seen growth come in from all aspects. However there has been a famine in the hardware business as many of them had not envisaged the unprecedented demand and are now trying to cope with it. What has also not helped is the continuing shortage in semiconductors.
As business travel has been dramatically reduced businesses are not being able to engage and meet channel partners face to face which helped them resolve issues and address opportunities faster.
Due to lockdowns and market shutdowns, there has been a slowdown and most have started selling online. However, many partners are still behind in the digital adoption process.
iTNews Asia: Have any of your business processes business model changed during the pandemic?
Tsu Pheng: During the pandemic, we found that many of our customers were asking for subscription-based services. Due to economic uncertainty, they were less willing to spend large upfront CAPEX costs to acquire the technology needed to drive and sustain their business.
Customers were also asking for IT service providers like Logicalis to deliver an outcome-based service for the technology that they are acquiring. With an outcome-based service partnership, service shifts from a ‘break-fix model’ — where service teams are called to fix IT hardware, system failures, part malfunctions, etc. — to instead work proactively to help businesses achieve their goals, optimise efficiency, and realise returns on their investment.
As a result, we rolled-out several Anything-as-a-Service (XaaS) offers like Desktop-as-a-Service, Collaboration-as-a-Service, Backup and DR-as-a-Service, DevOps-as-a-Service and SOC-as-a-Service among others; that provides a flexible consumption model, enabling our customers access to deep expertise and cutting-edge technology, with little to no upfront cost.
For Logicalis it’s about a fundamental return to customer relationships and helping to build their success throughout the course of the contract.
Paloma: A lot has changed in our business processes. We have to migrate our apps to the cloud, build infrastructure resiliency and develop an online workflow automated system to support various requests internally and from our project management team.
HR had to tweak the work scope of every employee to drive productivity in a work-from-home setup. We installed various software to support collaboration, improve security, and enable automated monitoring of different KPIs.
Mohan: Like all other businesses we saw our engagement move online. We have even signed on customers without ever meeting them face to face. This would have been impossible about 18 months ago.
On the service offering we see more customers seeking help from us in the following areas.
- Communicating with partners with WhatsApp and other messaging tools to reduce zoom and email fatigue
- Online sales trends of what products, are being sold and where
- Digital adoption assessment to ensure the partners are on the right maturity levels
- Digital assets dissemination to ensure brands are able to get their marketing assets to the right audience via channel partners
The pandemic has had a feast and famine impact on the technology business over the last 18 months.
It has been a feast for XaaS, cloud and software businesses as they have seen growth come in from all aspects. However there has been a famine in the hardware business as many of them had not envisaged the unprecedented demand and are now trying to cope with it. What has also not helped is the continuing shortage in semiconductors.
- Ajay Mohan, Business Director, Enfactum
iTNews Asia: What are your customer pain points, and how are you addressing them?
Tsu Pheng: While technology is important, it doesn’t tell the whole story of digital transformation. The company culture cannot be overlooked.
A common misconception is that if a company upgrades its technology, digital transformation is complete. The reality, however, is that digital transformation isn’t entirely about software or technology, it’s also about organisational adaptability. For true change to happen, company and employee wide buy-in is critical. This is where most companies face the biggest hurdle.
Recently, Logicalis delivered a cloud based virtual Desktop-as-a-Service to a higher learning institution to create a practical and easy virtual learning environment, where students can access learning content and real-world software tools on their own device, from any location, without the constraints of a computer lab or classroom.
Realising that if each faculty does not develop curriculum and learning content off this platform, this digital initiative will eventually be a failure, we worked with the CIO on an adoption and success plan throughout the life cycle of the solution and services that we provided. Transformation is a journey, and we are glad to be able to help our customers curtail the initial friction around this change and expedite the positive business outcome.
Paloma: The most difficult was during lockdowns, BPO/ITBPM, banks, and some government agencies pivoted and shifted work home. We had to configure devices, deliver, and support their employees at their homes. Since we serve some of these essential companies, we are forced to mobilise our support engineers and warehouse personnel and find a way to deploy them safely to various sites.
We need to provide them with incentive pay to report for work (some refused to report for work out of fear). On top of that, we need to spend for their transportation, lodging, vitamins, PPEs to ensure that their health is not compromised while serving our customers.
Partnership with customers is vital. Luckily, most customers shared the unforeseen expenses we incurred due to the restriction and additional health protocol requirements imposed by the IATF and DoH during the pandemic. We outsourced some of our delivery requirements to third-party companies because our fleet of delivery vehicles cannot accommodate customers' volume and rush requirements
Mohan: We are helping our OEM clients understand and address these needs faster, we see companies more open to using new technologies and ideas to stay connected and maintain business continuity. I have shared above the shifts that we see.
iTNews Asia: Where do you see as growth opportunities in 2021?
Growth will come from BPO global companies, government, banking and finance. These are the industries that will continue to spend money for their digitisation and digital transformation initiatives. From a product and service point of view, mobile computing (i.e. tablets and laptops) will continue to grow, cloud services will accelerate and managed IT services as well.
- Bong M. Paloma, Executive Vice-President, Technology, Sales and Marketing, Accent Micro Technologies
Tsu Pheng: Application modernisation is business modernisation. Many organisations need business agility to survive and expand in competitive environments. However, the fulfilment of these needs will be impaired by monolithic application architecture that these businesses run on.
To move with the speed of the business and remain ahead of competitors, organisations must up their game and adopt the latest modern applications technology. This is where I see one of the biggest growth opportunities. The current crisis has proven the importance of modern applications, the scope of developing modern apps, as well as modernising legacy ones, which will increase manifold in the new normal.
Paloma: Growth will come from BPO global companies, government, banking and finance. These are the industries that will continue to spend money for their digitisation and digital transformation initiatives. From a product and service point of view, mobile computing (i.e. tablets and laptops) will continue to grow, cloud services will accelerate and managed IT services as well.
Mohan: I think the first half was still hungover from last year. I see market demand start to pick up in the last 4 -5 months of the year as many customers prepare for 2022. What is not helping is the sudden outbursts of the pandemic. India for example was beginning to pick up and then they had the most severe outbreak. This is leading to consolidation of smaller businesses into online marketplaces.
iTNews Asia: What will be your go-to-market strategy going forward?
Tsu Pheng: We will continue to broaden our strategy around our customers' success in adopting the technologies they acquire, so that the time to value is shortened and remains predictable. With IT environments becoming increasingly complex coupled with the widening skills gap in the market and the need to quickly adopt new technologies, IT teams are under extreme pressure to defend their investments and ROI.
As an organisation, we are always transforming, both internally and to enable our customer’s meaningful transformation. The after-sales engagement journey with our customers is key to our success and will be one of our key focus this year..
Paloma: We will continue to innovate our products, solutions, and service offerings. Since capital is scarce, we will offer an OPEX or consumption model to allow our customers to acquire new IT equipment and capabilities and modernise their infrastructure. We will continue to invest in systems that will enable us to operate more effectively and efficiently.
We have a lot on our plate – from managed IT Services to cloud-based services (on-prem or hybrid model), outsourcing of non-core services, digital transformation consulting services, discovery sessions and others.
Mohan: We are doing pro-bono work for many of our partners to demonstrate our support and capabilities. With this pandemic, we see tremendous opportunities for growth as more businesses will need agencies with digital expertise, and created a few proprietary offerings:
- Market Pulse Check: This is done using WhatsApp business and we are able to report to businesses the weekly market pulse across Asia. This enables them to take guesswork work and manage business more objectively
- OLR Sales Data: We do syndicated search using our proprietary algorithm to share online sales trends with OEMs so that can better understand and support the channel partners.
- Digital Health Assessment: To help brands understand where the amplification, e-commerce and engagement capabilities of the key channel partners.
- Digital Assets and Information Management: To ensure partners are able to share more consistent, locally relevant information that helps customers find the brand via channels more quickly and effectively.
