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Digital Transformation, the Channel and a $4.5 Trillion Opportunity

[fa icon="calendar"] Jul 19, 2018 9:19:24 AM / by Derek Wayne

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When a business like Microsoft describes digital transformation as a $4.5 trillion market opportunity, it's time to start paying attention.

For businesses, there’s never been a better time to go digital.

IDC estimates digital transformation to be worth USD20 trillion, or more than 20 percent of global GDP. By 2019, digital transformation businesses will earn at least 45 percent of revenue from new business models and by 2020, a full 60 percent of enterprises will be estimated to have a digital platform strategy.


Digital transformation is a wave of business innovation fueled by cloud technologies like the Internet of Things, augmented reality, artificial intelligence and big data, and big business has woken up to the possibilities which these exciting new technologies entail.


Microsoft for example, believes that "driving our customers’ businesses forward through digital transformation has opened an estimated $4.5 trillion market opportunity."


Digital transformation is a wave of business innovation fueled by cloud technologies.

Microsoft Channel Chief Gavriella Schuster touted the massive figure at Microsoft's 2017 Inspire event, which apparently represents the size of the digital transformation market opportunity by 2023 according to IDC. Understandably, even she was not convinced at the accuracy of the figure but has subsequently become less doubtful due to some elementary calculations which you can get more information about on Scott Bekker's blog at Redmond Channel Partner.

Microsoft also makes mention of a study by the Harvard Business Review, in which 86 percent of companies view digital disruption as an opportunity, and that companies across every industry are seeking ways to use digital transformation to empower their employees, better engage with customers, optimize operations and transform their products.

To capitalize on digital transformation and cloud technologies, Microsoft has announced new programs, tools and resources to "help partners innovate, grow and differentiate their businesses" including a free version of Teams, new intelligent events capabilities, the Workplace Analytics teamwork solution, new cloud, apps and data technologies including Azure Data Box Disk, Azure Virtual WAN, Azure Firewall and more.


The intention is that Microsoft partners will leverage these new offerings to help customers embrace and innovate in the modern workplace and continue to help them in their journey to the cloud. It's clear that Microsoft believes that partners will play a big role in its future success, and is supporting partners' go-to-market efforts and helping ensure their solutions reach new customers accordingly.


Digital transformation is a big deal and is increasingly being recognized as such.

The idea in this article is not to promote Microsoft, but to use the software giant to draw attention to the fact that (a) digital transformation is a big deal and is increasingly being recognized as such, and (b) that the channel is moving towards a more collaborative approach where vendors are using cloud and digital technologies to enable their partners and their end-customers as well as themselves.

Cloud technologies have the potential to fuel business growth, help partners innovate, go to market faster and connect with the right customers at the right time via data and analytics. Such a pervasive new technology is going to have repercussions on IT channel operations as well, and its up to distribution businesses to be adaptable and flexible when it comes to incorporating cloud and digital into their strategic and business operations.

Digital technologies are not only changing how product gets to market, but also influencing marketing spend throughout the channel. The inherent measurability & transparency of digital marketing technology means that the days of vendor funding being wasted on ineffectual channel events and product promotions are drawing to a close, as vendors get wiser about how their MDF funds are spent downstream, and demand more accountability and ROI.


Digital transformation is spawning new business models.

Digital transformation is also spawning new business models. Distributors and resellers have begun aggregating cloud services into a single sign-on portal for their customers, via a relatively recent business model known as a cloud service brokerage (CSB). As cloud services proliferate, it becomes a laborious process for end-users to keep tabs and manage all of them.

By bringing all the distributor or reseller’s cloud vendors under one roof and giving users the ability to manage all their cloud services via one portal, end-users are spared the hassle and labour of needing to log into and manage each individual vendor cloud service.

Customer needs are integral to the innovation process. Amazon CTO Werner Vogels has said that "The first requirement for developing an innovation mindset is to adapt your offerings fast to changing customer behavior. Digitization opens up new opportunities for companies to create value. So adopting a digital innovation mindset will automatically lead you to start thinking what kind of value you would like to add to a market in the future. Entrenching a digital innovation mindset in your company means you won't merely survive all the changes happening around you, but instead lay the foundation for a bright future".
   

Topics: Microsoft, cloud services brokerage, Cloud, Channel

Derek Wayne

Written by Derek Wayne

Derek writes on technology, and has a strong passion for the IT channel and how it is in the process of changing to reflect the macro-environment in which it operates.