This article was first published in Human Infrastructure Magazine at PacketPushers.net.
The cost selling products to the Enterprise is large. How large ? As a rough guide, 20% of a typical IT companies cost is sales and marketing.
The number varies, more when a company has a push to grow quickly (Palo Alto Networks had sales cost rise to 35% in 1H2016) and will shrink when profits become more important. (fn)Secondary effects are discarding the extra staff.
The Food Chain
Manufacturer -> Vendor -> Distributor -> Reseller -> Customer
Why do we have this long and inefficient chain of supply of products ? 20 years ago, holding items in stock in warehouses was a difficult, costly and time consuming process. It was hard to move stock around, costly to do the accounting and companies would fail if they got their inventory predictions wrong.
Distributors take the risk and responsibility of shipping and warehousing while providing capital to hold vendor stock.
In 2016, its different:
- the speed of shipping has decreased from months to weeks
- the time to manufacture & ship has been reduced from years to months
- inventory management software is now mature and well understood
Resellers are the final link to the customer and expected to provide custom solutions, software integration and value-added technical services.
In 2016, its different:
- there are less IT vendors. Blended solutions
- open source software is replacing software integration
You can see this effect at Amazon online shopping and its ability to rapidly deliver goods.
Software Defined Future
We haven’t quite moved into the era of commodity hardware but software is forcing the transition. Routing is just one function of WAN device, DC switches are bundled in hyperconverged systems and NFV is peeking its ugly little head around the toilet door.
The __features __ that we want from networks in five years will come from software automation & orchestration. You cannot afford the internal cost of hundreds of hours in “vendor presentations”
Thats because the greatest value has shifted from vendor products/solutions to the configuration and operation of the software.
In-House not Outhouse
Oh, one more thing. DevOps is inherently a in-house activity. Executing an “iterate fast, change fast, fail fast” strategy means fast communication loops with the business and that works when everyone is on the same team and able to communicate clearly.
Future of purchasing
First: Less work, less meetings – they don’t add value to the solution. When I say “Cheaper Buying” I mean the cost of purchasing, meeting, reviews, proof of concepts and all of those costs must be reduced.
Second: Products will trend cheaper because the value isn’t in owning them but in how you use them.
These two things result in “Less Selling”. Don’t let vendors waste your time on “architectural pitch”. Focus on real work not buying stuff.