Let’s face it: 2020 was a tough year. But systems integrators have a lot to look forward to in 2021. The tech industry’s rapid response to the global pandemic means that SIs can now offer their customers a wide array of return-to-work solutions. And as life gets back to normal, those same customers will be eager to continue the digital transformation efforts that were accelerated by the crisis.
Join us as we explore the opportunities with Tom Digsby, Senior Manager of the IoT and Data Solutions Group at Tech Data, a leading global distributor. We discuss:
- How SIs can position themselves for rapid growth in 2021
- How to quickly onboard complex new technologies like AI
- Why distributors are evolving into aggregators, and what this means for SIs
For more on this topic, read IoT Solution Factory Builds System Integrator Growth.
Tom Digsby: “What is your killer feature? Why would I buy it from you versus partner X down the street?”
Kenton Williston: That was Thomas Digsby, an IoT expert from Tech Data, and I’m your host Kenton Williston, editor-in-chief of insight.tech. I’ll be talking with Thomas today about the ways systems integrators can find success in these uncertain times. Thomas, welcome to the show. What’s your role at Tech Data?
Tom Digsby: Sure. Hi, my name is Tom Digsby. I’m senior manager of the IoT and Data Solutions Group. I manage a group of vertical consultants, and technical consultants, and what our team does, is interface with partners. And what I mean, partners, is resellers. So, what we do is, we help from a vertical perspective, our resellers to understand IoT, and in a vertical context. So, it would be... Our focus is on healthcare, it’s on smart cities, it’s on industrial manufacturing and it’s also retail and commercial.
And we kind of have a little bit of a horizontal as well called smart buildings or smart spaces. Tech Data is a solutions aggregator, and we have a lot of value rather than just ordering from us. We have a solutions aggregator value where we have Practice Builder methodology. They help partners take a solution to market. We show them how to do that and take a solution to market in less than 90 days. We have the ability to bring new technology updates for solutions. We have prepackaged solutions that you can take to the market today. And we also have a vast ecosystem of partners that we can marry up different partners with.
Kenton Williston: That’s all really great. And I think there’s some really important things that you mentioned there. So, the first thing that stands out to me and in what you said just now is, the markets that you serve, including things like smart buildings. And of course, it’s not a surprise to anybody that building occupancy and all kinds of other things have been seriously impacted by the pandemic. And so, systems integrators, I think, regardless of what market they’re serving, are being asked to very rapidly deliver all kinds of new solutions, fever checking, and contact tracing and mask compliance, and all this kind of stuff on a very, very quick turn basis. So, I’m wondering from your perspective, how this has been impacting the business that systems integrators have, and where you see things trending going into next year.
Tom Digsby: Yeah. Great question. We have seen end users place their purchasing projects on hold because of the pandemic and for reserving and preserving their capital that they may need. The systems integrators have really had to shift their focus and we’ve helped do some education around COVID and the return to work, right? So, as a lot of these buildings are empty now, there has to be some safe measures put in place, and we have some solutions. We have about 20, what we call COVID return to work solutions. And these are focused on, for example, I’ll give you a few of them.
Temperature pre-screening, right? Someone comes into the building, you can grab their temperature and make sure they’re good. Telehealth, so, having a virtual conference with your doctor, air quality monitoring, social distancing, alerting as well, digital signage is another one that’s pretty critical for information going into a building that people need. I think when we’re looking at 2021, those are really going to be some of the really focused areas to look at when you’re a systems integrator. Those kinds of solutions make people feel safe. And when people feel safe, they kind of return to normalcy that we knew before the pandemic. It will take us a good portion. I would say the first half of next year, talking to companies that are returning to work and need to put some of these safeguards in place.
Kenton Williston: So it sounds like what I’m hearing is systems integrators should not expect to return back to their previous lines of business in the near future. That they’re still going to be at a lot of focus on the return to work and health and safety sort of elements. And that it’ll be strategically wise to plan for that going into next year.
Tom Digsby: Yeah, absolutely. I mean, there’s still going to be a little bit of integration work. The finishing up the projects that they have in flight already, but as new opportunities in new ways of returning to work, for instance, we had a partner approach us and said, “Hey, we need to look at the office as kind of like a hotel for the desks. I want to make sure that we’re cleaning the desk. I want to make sure that there’s not more than six people in this one area, and there’s not more than X number of people on the floor. I think he called it desk hoteling, if you will. So, those are... That’s an example of returning to work and some of the things that can be put into place technology-wise and plan for now, so that you can be ahead of the curve and actually talking and selling those kinds of systems.
Kenton Williston: Makes sense. And what about the role that systems integrators play in a solutions landscape? So, what I mean by this is, there is an ecosystem, it starts with the technology providers, let’s call them OEMs, ODMs, those sort of folks. Distributors like Tech Data, then take those solutions and deliver them to systems integrators who in turn work with their end customers. Do you see that food chain, so to speak, evolving in any way, either because of the response to the pandemic or for other reasons?
Tom Digsby: Yeah, I think we at Tech Data take our solutions aggregator role very seriously, and we think it’s more critical, and we have been more involved, more and more bringing solutions to product market rather than just buying and shipping a product, right? Our expertise is vetting the vendors, understanding the solutions that can be aggregated and brought to market. We have what we call an IoT solutions catalog. We can dive into that. We have probably 60 or so solutions in the catalog now that are by-vertical. We view it, and look at the landscaping changing a little bit, as we all know, no single vendor OEM or partner can deliver everything that one end user needs, right? We have an extensive ecosystem partnership with a lot of different types of skilled partners. They could be someone that implements or goes and does an assessment at a client site.
We can connect that partner to a person that’s trying to pitch the value to an end user, or we can also connect them with... When you’re looking at the solution, it has to have a business outcome. And if the solution doesn’t have a business outcome, it’s a science project and no one’s buying a science project. It has to have the business outcome. So the business outcome is usually analytics or AI driven. So we have ecosystems of partners that can help with that. So our value, when we’re looking at it from a distributor to how to help the changing market, especially when it comes to IoT and data solutions, is not only providing the technology, giving you a blueprint for how to deliver the solutions in our catalog, or you can bring your own and we’ll help you with that. And then helping you drive the business value through the analytics side of the house.
Kenton Williston: So that’s all really powerful. One thing actually has stood out more than anything. In a way it was just said it was a single word, which was the word aggregator. What in the world is an aggregator? How does that differ from a distributor?
Tom Digsby: Oh, that’s great. So, distributor has relationships with a lot of different vendors, right? And their primary role is to buy a product and make a little bit of margin, and ship the product. We have a solutions specialty practice. There’s four of them, four distinct solutions, especially practices that we’ve invested a lot of money into from Tech Data. One is security, one is cloud analytics and IoT are together, as you can imagine. So, those four specialty solutions practices are all focused on how do we deliver the value? How do we educate our partners, so that they can sell solutions rather than just ordering a point product? A lot of times when we get a call from an end user, sorry, a partner, they’ll say, “Hey, I need 16 tablets or 160 tablets.” And you’ll say, “Oh, well, what are you going to use that for?”
Tom Digsby: “Oh, we have a blah, blah, blah, solution that we’re going to take to market.” And you start digging into it. And it becomes part of a bill of materials that someone’s needing to fulfill a technology need, a business outcome need. So, we dug a little bit more and what it was, was they were wanting the tablets to be able to access the information for the manufacturing floor. So, well, we dug a little bit more and discovered that, “Hey, you need some sensors, you need some more information.”
And we basically cobbled together a solution for them as part of the business outcome to say, “Oh, you need to centralize this information. You need to be able to deliver it in this way. And you need to be able to see the data on those 260 screens, right? That you just wanted to order.” They were so appreciative that that’s kind of what spawned and helped the Practice Builder. The Practice Builder has been around for about 10 years for protect data. And we’re doing it in each one of those disciplines. Security, cloud, IoT, and analytics. So, our value is teaching our partners how to solution sell. What is that business value for the end user, not just buying product and shipping it.
Kenton Williston: So, I take it, this Practice Builder service you’re talking about, it sounds like there’s a whole toolkit there to help systems integrators succeed. Can you explain to me what exactly this Practice Builder service is?
Tom Digsby: Oh yeah. Yeah, sure. So, it’s two parts. One is we teach the value of what the Practice Builder is, what’s the timeline. We can help a partner take a solution to market. Whether it’s ours or theirs, and in less than 90 days, and when I say take it to market, everything is included. We know what your marketing looks like. We know what your operations within your business looks like. We know how much money that you’re going to need to supply from how do I sell this based on some business assumptions that we make.
We have a business tool that we use and what that simulator does, it sits down and understands the pricing, the cost of goods, your additive services, your third-party integration, your OEM price from all the different vendors that you’re aggregating. And it’s a one place to look at the whole picture of, “Hey, what does this cost and how much margin can I make out of it?” All in one place. So the tool and the process work together, hand in hand, and we’ve actually won some awards for the Practice Builder.
Kenton Williston: Wow. Well, that makes sense. I mean, it just sounds tremendously useful and thinking, particularly there’s two things that come to mind for me. So, one is just the aspect of how no one company is going to be the expert at everything. So, it sounds like a big part of what you’re doing is bringing to bear the technologies and expertise from a lot of different sources. So, a systems integrator can focus on their own specialized expertise, but be able to leverage the best in class for all the other areas that they’re not necessarily experts in and don’t want it or need to be experts in.
Tom Digsby: I think that’s a great summary. Absolutely.
Kenton Williston: Yeah. And then the other thing, that I think it’s really important about this to me, is just as the technology has progressed and you’ve mentioned AI a couple of times already, so, that’s a perfect example of a technology that can be incredibly complicated and doing things like detecting fevers, or contact tracing or anything like that. I mean, these are the sorts of applications that are challenging to develop. So, having a complete solution that can not only execute these kinds of tasks, but also integrate with a larger analytics framework to deliver business value. This is very, very complicated. So, having access to these sort of more complete end-to-end solutions, I imagine, is tremendously valuable.
Tom Digsby: Yeah, our partners are very appreciative for the value and all we ask them in exchange is, “Hey, we’re going to teach you this methodology, award-winning program, and all we ask you to do is, source the equipment from us, the software, the hardware, the things that are needed to put the solutions together. So that’s all we’re asking in return.”
Kenton Williston: A fair trade. The other thing that I have a question about here is, we’ve been talking about how Tech Data can source technologies from a lot of different providers, and how it’s extremely valuable, especially in these times where there’s a lot of uncertainty in the market has shifted very rapidly to have a ready-to-roll, end-to-end solution. But I imagine there’s still a lot of customization needed to address the particular set of customer needs. So, can you talk to me a little bit about how you worked with systems integrators to custom tailor these technologies for their end customers?
Tom Digsby: Oh, sure. So let me start out by going through a little bit of the Solutions Factory process. So, as we bring a solution, what we think is a great solution package together, we bring it through our Solutions Factory process, and that’s where we vet the vertical industry, the aggregation of the technology. We make sure that the business outcome is there, has it been deployed and really what’s the ROI? Because if there’s not an ROI, no one’s going to buy it. So, our solution factory processes, it really looks at a solution before we even bring it and announce it to our partners.
And we also have baked in the ability to roll out the solution with about 80% of it baked. If we look at... Let’s take equipment manufacturing, for example, okay? You can take the equipment manufacturing, you can say, I need sensors or, you know what? I’m going to talk to the equipment directly through the PLC card.
We leave that flexibility and so that, you may need to add some sensors and talk to the PLC card at the same time. So, how can you tweak the solution so that it fits the end user that you’re actually talking to? If it’s a, let’s say it’s a smart parking solution, the number of cameras, they may have existing cameras, we may need to add 20% more cameras. So, having the ability to aggregate all of that and be able to leverage existing equipment or adding new equipment, the business outcome is what’s driving the need for the solution. The flexibility and tweaking and modifying is what the systems integrators really appreciate when we’re talking about an end-to-end solution like that.
Kenton Williston: That totally makes sense. But I’m wondering about the other piece, which I touched on briefly earlier, which is the way different systems integrators have different areas of expertise. I’m betting that part of what you do is not just bringing together these technologies from different sources, but I’m betting you also help systems integrators find each other and other kinds of service providers to fill in wherever they don’t have the right expertise. Am I guessing correctly?
Tom Digsby: Oh, absolutely. Absolutely. So, when I talked to people about our different types of partners, or skills of different partners, I often draw out three circles. One on the left, one on the middle of the one on the right. And one on the left. I usually talk about implementation and assessments. So, if you need to go out and assess an environment for where should the cameras be placed, how many cameras need to be placed? How far apart are the cameras that need to be capturing the information? How are you going to aggregate that camera data? How many gateways do you need? Do you need switches? What kind of equipment is in place today? They may have a vendor preference that we need to take in consideration when we’re looking at that. So that’s the implementation or and assessment group. The resellers are, “Hey, I have an opportunity. I’m really good at creating demand. I can get face-to-face with a customer and I need things to sell.”
So, we have over 60 solutions in our catalog that are vertically focused, right? For IoT and analytics outcomes. So, those are the VARs. Those are the folks that are really good at selling and identifying opportunities, and then matching up the technology with what it is the client needs. And then on the right hand side, the third circle, is all about that business outcome. So, what is it that we need to capture? How is it that we need to capture it? It could be dashboards. It could be video feeds. It could be learning from the video itself and doing some AI interpretation of it.
It could be machine learning. So the analytics and AI and machine learning is a different group set of partners that we have. So, assessments, what I call reseller bars and analytics, AI type partners. We can cross-match. So, if an organization is looking for a skill set in any one of those three, that doesn’t have it, we have a vast ecosystem and contracts with the partners that can deliver those kinds of services. So, it’s really just a matter of a little bit of speed dating, and introducing them and saying, “Hey, guess what you’re doing? You have a need for that.”
Kenton Williston: Exactly. Exactly. Yeah. So, well, I’m wondering if I can add another access to your three circles chart here. Because we talked about sort of the, how people could be segmented in terms of their business focus. Whether there are VAR, for example, or something else, but there’s another axis that’s gotten a lot of attention over the last couple of years, which is how the sort of operational technology machine sensors or security cameras or whatever, is there any convert or more with information technology that sort of classic data center, cloud, all that kind of stuff. So, you do see that as really happening? And if so, how is it impacting systems integrators that are coming from each of those backgrounds?
Tom Digsby: Yeah, sure. So, we call it OT and IT. So, it’s the convergence of that, right? So, we look at OT and IT bringing the power to the customers, kind of what the phrase we use. That’s to say that, they can deliver the control to the customer. The IT team now has sensor and machine data, and can now look at normal processes and systems rigor and safety from a security perspective that the IT folks already have.
So integrating the OT and the IT together and operationalizing that, is very much needs that the type of partners that we have as well, to interface with them. So, when you look at the OT management aspect, they really reap the benefits of the technology that comes from IT. And when we’re talking about efficiency, knowledge, we’re looking at being able to schedule maintenance without impacting the bottom line, because now they have more real-time information from sensors and cameras and such. So, bringing that operational side of the house to bear here, is really a skill that can be leveraged almost immediately with all kinds of things that we talked about already.
Kenton Williston: So I think there, I would argue that a lot of what you’ve just described, is what I would consider to be digital transformation. So I’m wondering how you see that concept of factoring in here, especially because there’s been a lot of talk about the pandemic accelerating digital transformation.
Tom Digsby: Yeah. Yeah. I think you’re right. I think it is a layering kind of process. Digital transformation is definitely... It’s a multi-step process. And when you’re looking at improving the ability to talk through the equipment, or learn from the equipment, get the data from the equipment and then be able to autonomically monitor the plant efficiencies, for example, in a manufacturing environment. Once you have that, all kinds of things open up. When you have that base level of automation, that some plants don’t have right now, you can gain efficiencies, but more importantly, you can also create a revenue growth. And when I say revenue growth, meaning, if you have certain machine data, and you’ve gathered it over time, now that you’ve transformed your environment, you can actually monetize some of that data and put it into data sets. And you can actually offer that as a different revenue stream for the same kind of industry that the partner, the end user is in.
So, the end user can do that, or the SI can do that on their behalf. And then co-market the ability to take that data that’s learned, and sell it as a service. So, one can monetize the data after you’ve gone through a digital transformation. So, what I mean by that is, if you have a certain kind of machines, let’s say they’re more on the manufacturing floors, you’ve got algorithms, you’ve got things built in, you’ve got this kind of equipment. If someone has the same kind of equipment, they can learn from that and they will pay you for that. So they don’t have the pain and painstaking process to go through it themselves. And if they know what kind of dashboarding and operations that you’re looking at, and they can just tweak the information and the algorithms to make things better for their machine, they’ll actually pay for that.
Kenton Williston: Interesting. And that leads me to something else I wanted to ask you about, which is just the concept of agility. So, I think it’s fair to point out that we’re in some very uncertain times, obviously the pandemic created a lot of uncertainty, but there so much more. As we’re recording this, the outcome of the election is unclear. It’s kind of like everywhere you look, there’s just lots of question marks. And I think, persistence of integrators to succeed in this kind of environment, having a lot of agility is really important. And I’m wondering what you see as the keys to succeeding in this environment. Is it really about having differentiated offerings being able to separate yourself from the pack somehow, is it having access to these 90-day deployment kind of schedules? What’s kind of the key to success here?
Tom Digsby: Yeah. It’s a great segue into what I coach our partners on our Practice Builder. So, as part of that, you hit on a few topics there, having the right technology, having the right value prop. As part of our Practice Builder, one of the things we really home in on, and make the partner discern themselves is what we call, “What is your killer feature? Why would I buy it from you versus partner X down the street?” So, having that differentiation, if you’ve got 16 years of manufacturing experience, people want to know that. So, in your marketing materials, in your differentiation, you’ve got to be able to say that. And we capture that and we hone it even to a finer point in the Practice Builder. When we look at that, the kind of the Practice Builder accelerates the guesswork. You do it all on paper.
And what we’re doing is looking at the repeatable solutions because no one wants a one-off solution. You want to be able as a reseller or a systems integrator to say, “Hey, I could sell at least 80% of this over and over and over, right?” So, that’s what we call a repeatable solution. When you have the repeatable solution and all the profile and all the aspects of taking the services piece to actually deliver it.
We actually have the services piece, the cloud consumption, the hardware, any third-party assessments, all of that thing gets modeled in the Practice Builder in the business simulator. So, it kind of takes the guesswork out of it. So, if you can do it virtually and sit down with us and do that, it takes a lot of guesswork, but it also honed your message to a very sharp point, almost like a dart going into a dartboard. It takes the guesswork out of, well, what would we do here and really captures on your skills as a systems integrators. What can you deliver on that business value to the market?
Kenton Williston: Makes sense. And this leads me to ask, what Tech Data itself is doing to continue improving your value proposition and in particular, how you’re leveraging your relationship with Intel.
Tom Digsby: That’s a great question. I mean, there’s a lot of under-predictability, just like you said, right? We’re always looking at our role as an IoT solutions aggregator by gaining the insights from the vendors like Intel and the suppliers that we buy from. We look to strengthen our knowledge. We were having knowledge transfer the other day of how edge processing and what the software from Intel looks like. So, OpenVINO was one of our conversations. So, we were actually looking at some of the technologies and transferring.
And as I mentioned, I have some technical resources on the team. They were looking at it and going, “Wow, we could apply that here. And we could apply this here.” So, as our partners start to come to us, we share that knowledge and say, “You have a solutions that’s architected this way. Have you thought of replacing it or looking at it in this way, or a different way of bringing the value from the different vendors like Intel and looking at it from also from the industry perspective and looking at it from what are the AI analytics look like? What’s the processing for machine automation look like?
Tom Digsby: So, as you’re looking at it, we’re working with Intel to make sure that we’re identifying the solutions, and we’re map mapping that with the problems and the business outcomes from the catalog that we have, so that they can leverage the technology and our expertise and can really go to market. We support our partners in that way, and they appreciate our value.
Kenton Williston: I’m sure. I’m sure. So, we’re getting close to the end of our time. I’m just wondering if there is anything I’ve overlooked you wish I had asked you?
Tom Digsby: Well, I think if partners come to us with an idea, even it doesn’t have to be one of our solutions. As I mentioned that we have our solutions catalog. We have a Practice Builder. If you bring us a solution, we can still work with you. Just last week, we had a partner bring a solution to us that revolved around SAP environment. And I was like, “Oh yeah, we can absolutely do the same kind of methodology and same Practice Builder.”
And we did a Practice Builder with them last week. And so, it doesn’t have to be our technology. If you have a solution that you want to bring to market, and it has distinct business value, and some will actually buy it and you’ve implemented it, or need to take it to market in a repeatable fashion, we’ll work with you. So my little five-minute spiel here is about how we can help you take what you want to go to market with. That’s our value from Tech Data.
Kenton Williston: Wonderful. Well, with that, I’ll just say thanks so much, Thomas, for joining us today. Really enjoyed talking to you, and I’m sure our audience will enjoy this conversation as well.
Tom Digsby: Yeah, thanks for the time, Kenton. Appreciate it.
Kenton Williston: And thanks to our listeners for joining us. If you enjoy listening, please support us by subscribing and rating us on your favorite podcast app. This has been IoT Chat Podcast. We’ll be back next time with more ideas from industry leaders at the forefront of IoT design.