Wednesday, August 3, 2016

An Open Letter to CompTIA

As the time counts down on another successful ChannelCon, I wanted to document some thoughts before I return back to the grind.

First and foremost, the event this year in Fort Lauderdale was fantastic, the CompTIA staff is amazing, and the get-together feels like a family reunion (even comes complete with some crazy uncles and aunts!).

Two years ago, Todd Thibodeaux, CEO of CompTIA said two things that I personally found startling about the channel:

  • 40% of partners are going to retire in the next 10 years
  • 75% of the channel will be made up of millennials at the end of those 10 years.

These are both coming true, and probably faster than predicted.

Herein lies the challenge for the traditional IT and Telecom channel, and CompTIA in particular. 

Millennials are not joining leadership/ownership roles within “our” channel. They are, however, joining the broader technology industry and other industries that are radically transforming themselves into tech companies.

Todd mentioned in this year’s keynote that Technology was struggling to stay in the Top 10 of desirable industries. With the surge of AI, virtual reality, robotics, IoT, mobility, self driving cars, Pokemon and other cool stuff – this seems perplexing.

When Marc Andreeson predicted that “software will eat the world” 5 years ago, we felt that the channel would lead the charge on driving this change with their customers. With deep skills in security, infrastructure, compliance, and a host of other important things, the IT industry would enjoy a renaissance of sorts.

Well, the opposite has happened.

IT departments have steadily lost power, and the CIO has relinquished purchasing control to the line of business executives. In fact, Gartner reports that 72% of all technology spend is now being led out of LOBs – much of the time without IT influence. In only a few years, this will be 90%.

This was once called “shadow IT” or “rogue IT”, but today is the new normal. Much to the surprise of CompTIA, and the channel industry as a whole, this change in customer behavior has also spawned the “shadow channel”.

The shadow channel is predominantly made up of “born in the cloud” millennials that have built successful businesses inside the ecosystems of SaaS companies. For example, Salesforce has 695 partners that drive over $20B in services – none of them present at ChannelCon.

In fact, NONE of the Top 100 SaaS companies in the world had a booth at ChannelCon 2016.

Dreamforce, an annual conference in San Francisco (run by Salesforce) is now the largest software tradeshow in the world. With over 150,000 attendees, you can see the new shadow channel in action – consultants, integrators, and other experts at serving the LOB customer, solving customer pain points and delivering real business outcomes.

As much as we try to convince ourselves differently, things like security, backup, disaster recovery, remote management and the plethora of other business critical solutions the channel faithfully delivers, do not drive business outcomes in the same way. Hence, the disconnect.

While the traditional channel has shrunk by more than 30%, the shadow channel has exploded in numbers over the same time period.

Not only did none of the Top 100 SaaS companies have a booth at ChannelCon, their partners were not in attendance either. CompTIA needs to immerse into their ecosystems to understand where (and if) it can provide value. Where do they go to learn? How do they certify their people? What do they read? Who do they follow? How do they run their businesses?

THIS is the channel of 2024, where 75% of the participants will be millennials. By then, we won't be calling it shadow channel any longer - it will be the new normal. Does CompTIA represent and lead this new channel or stay with whatever is left of the traditional one?

Action needs to be taken – and fast.

The shadow channel is currently the wild west - the equivalent of where our channel was maturity-wise in the early 1990’s. They are putting customer businesses at risk everyday by playing fast and loose with customer data, financial and even HR data. Proprietary information is flying everywhere across public clouds by smaller startups with little control or regard for the ramifications (or regulations).

The traditional channel has the opportunity to play the adult in the room. It may not be sexy to talk about business continuity, security or compliance with LOBs – but someone needs to do it. If the IT department is losing power, the channel needs to step up to protect these customers. Mistakes in these areas can cause business-ending catastrophes or even put executives in jail.

CompTIA, its members, staff and Board all need to take stock. Software is eating its world too. Larger hardware and software companies are busy making a pivot for survival (perhaps why they weren’t exhibiting this time around) and the association needs to as well.

These LOB focused SaaS companies – as well as their partners and ecosystems – are the future of IT, at least for the next decade. How does CompTIA help train them? How does it speak for them in Washington? How does it design communities and councils to attract them? How does it deliver relevant research and events?