This interview took place on 4 June and first appeared in CPI's Global Elite report - a breakdown of the top 100 channel partners in the US and Europe by revenue.
You can download the report in full, free of charge, here.
CPI: How different is Insight's business in the US compared with Europe?
Ken Lamneck: We actually view the US and European business as very, very much the same. We're very aligned from a branding point of view and completely aligned from a purpose statement point of view. Our value system of hunger, heart and harmony is very consistent across the board.
Our go-to-market strategy is really focused on four solution areas - and those are global. First, we work with clients on optimising their supply chain; still the majority of IT spend is about keeping the lights on. The next one is connected workforce, and that's really about the modern workplace experience. The following one would be cloud and datacentre transformation. This is about how every company is looking towards optimising its environment. We help them understand which workloads make more sense to run in a private and public cloud and what those cost differences are going to be over time.
The last one, which is probably the most differentiating, is digital innovation. Today we have 1,000 experts in the digital innovation area through the multitude of acquisitions we've done, whether it be through Caase.com in the Netherlands, or a company called Blue Metal out of Boston, or recently Cardinal Solutions in Cincinnati. They're now all under that digital innovation umbrella, and it's one single name of Insight Digital Innovation.
That go-to-market strategy is consistent across the globe, but some regions are just more mature than others. As you know, we've got a huge business in North America, so that's more mature and has more resources and added capabilities. Then within Europe we've got full capabilities to support those four go-to-market strategies, but they are at different levels of maturity. We're more mature in the UK than we are in Austria, for example.
You're heavily investing in services in Europe. Is this all part of getting Europe on par with the US business?
I think it's exactly what you said; it's getting it more equivalent to what we're doing in the US. We made significant investments in services offerings, with what we're now doing in Madrid, to really build out a further managed services footprint in EMEA, adding to what we do in our Sheffield [UK] operation. It helps make sure we're covering all the languages and all the skills that are necessary to support the client's needs for managed services.
And how can we expect business to continue developing this year and next year?
We're still certainly very bullish about the IT environment, as more and more clients look for IT to be their source of innovation, differentiation and how they compete effectively. We're seeing significant investments being made by companies in their IT arenas. I think what you're seeing is that the next 10 years in IT will be the best 10 years for the industry ever. That's being primarily driven by technologies such as AI, IoT with virtual reality, augmented reality, and, of course, autonomous systems like robotic process automation.
We're going to see something of an explosion over the next 10-year period. I think we will liken it to when everybody talked about the internet back in the late 90s as being overhyped. We went through a downturn in the internet back in the 90s - it has delivered far more than we ever expected. We just thought it was going to happen much, much quicker. I think people are looking at AI in the same way like it's overhyped and asking ‘what is this really all about?' I think we'll look back on AI 10 years from now and say, gosh, we really undercalled it. We probably just didn't get the timing right. It's going to take more than just one or two years to really solidify, but it's going to be game-changing.
What knock-on effect will this have on Insight?
What we're seeing is that the world is becoming more global. That's why our global footprint is so important - because these solutions are all so transferable. So if you take companies that are in retail as an example, the issues that a retail grocery store has here in the US are identical to what they're trying to solve in the UK. A lot of these solutions and developments that we make around the banking and finance sectors, and healthcare and retail, those AI type of solutions are certainly very applicable and transferable globally.
What is driving companies like Insight and some of your competitors to become more global? Is it being driven by your clients?
You touched on it exactly: it's our clients. The clients are the ones forcing and driving that. We had a heritage on the software side for the past 20 years, where clients were purchasing a Microsoft agreement. They didn't want to do that agreement in multiple countries, or even by region; they wanted to do it globally. So that's forced companies like ourselves and companies like SoftwareONE to do that globally. And now we're seeing the same thing in hardware, especially in the modern workplace with connected workforces where clients are basically saying, ‘hey, we don't bring enough value in our deployment of notebooks and collaboration devices to our teams, so we'd rather do that globally with partners like Insight'. It's not just the software side, which is easier because you're shipping bits versus physical devices, now we're seeing that in physical devices. We've got some pretty largescale clients that we're doing those kind of rollouts for globally now.
Do you think there's a trend in customers preferring to work with fewer channel partners globally?
Yes, we are seeing that. As more things get outsourced to the public cloud, there are more and more partners engaged with the customer. It's actually getting confusing for companies as they don't know who's ultimately responsible for delivering the solution. I think customers are looking at it and thinking, ‘I need some solution providers that can really do more than just one thing, and be able to step up and provide the full solution'.
There is definitely a trend there, and customers want to do business with fewer partners, because otherwise it's too costly and it's too confusing. But now with technology becoming more complex, and with clients looking to outsource more of it, they're going to be relying more on these super integrators or solution providers that can provide that.
Other channel CEOs have expressed that the market's growth could slow over the next couple years. What's your viewpoint on that?
I would say we're certainly positive and bullish. As far as Brexit goes, that has been going on for a while and I think businesses are adjusting to it already. I think one of the benefits of it taking so long is that the UK markets have been able to adjust to it slowly, versus it being a case of ripping the Band-Aid off and suddenly thinking ‘Oh, my gosh, what's happened?'
It's been adjusting slowly, and the market has held up very robustly. We do see that the finance sector has partially moved to Paris or Frankfurt from London. But it's happening in a more measured fashion, at least from our perspective. And our UK business has been very positive regarding the Brexit situation. It's a bit tumultuous right now, but we've really not seen a huge impact to business at this stage.
And if you follow companies like Cisco, they haven't seen a significant impact to their business at all. Now, that doesn't mean that it couldn't happen - it might get a little bit worse before it gets better. And the US-China tariff situation I think will benefit European and US companies in the long term, because it's all based on one thing, and that's IP protection. By any measure, I don't think there has been enough protection provided for IP by China, and I think those rules have to change and I think there needs to be a level playing field.
I believe that's going to benefit China in the long term, as they've got some pretty interesting technology. So I do think we'll get to the right place. It's a little bit tumultuous now, but I think once that gets resolved, we'll benefit from clear rules and clear protection of IP.
When you look at all the technology that has been compromised or stolen from European companies by China, it's considerable. I think getting that straightened out will actually be beneficial - even though there might be a little bit of short-term pain. I think cooler heads will prevail, and I think it will actually end up being better for the industry overall.
Some of Insight's key vendors are making some big changes in how they engage with partners. How has this affected Insight, and do you agree with the direction they're going in?
This has been going on for decades. In our industry, the first thing I ask is: is the vendor taking money out of the system? But the answer is no, we're not seeing them taking money out. What they're doing is just moving the dollars. They're moving it more and more towards where you're providing value. So if you're providing more value, then I think you're actually going to be better off and there will be more riches to be had.
They're not lessening the pie at all, they're just moving the pie and paying less for what might be considered supply chain activity. I think most of the vendors do a pretty good job of signalling those changes coming to us. If you're paying attention you see those coming and take advantage of them, but it's certainly not easy to do.
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