Geoff Greenlaw, Vice President for EMEA & LATAM Channel at Pure Storage, offers top three predictions for the storage market in 2023.
The regional channel has gone through some change in recent years. As the pandemic swirled around us, destabilizing margins and sowing uncertainty, we had to come up with new ways to add value and be partners in our customers’ journeys. I think we emerged stronger, having learned some valuable lessons. The Middle Eastern business landscape looks very different after lockdowns, a recession, supply-chain collapses and inflation. But change brings opportunities for the channel if we know where to look.
As 2023 begins, our customers’ customers want different things, which means their priorities have changed. We must ensure that across the channel ecosystem, people are up to date with the latest industry needs and requirements. They must understand the pull and push of forces like cost-efficiency, data centre power consumption, ESG (environment, social, and governance), OpEx, and CapEx. So armed, the channel can ensure it is adding value, delighting customers, and becoming true partners in change. Here are three developments we think will shape the regional market in 2023.
Controlling costs and climate change challenges will dominate the storage market in 2023
Over the next year, data centre power consumption will continue to be a major challenge. The focus will be primarily on costs, given the current economic situation and the fact that IT budgets are growing in single digits. However, pressure from climate change is also driving unprecedented upheaval.
The key to success in 2023 is for channel partners to educate themselves on sustainability to ensure they are helping customers make informed decisions. Channel partners are ideally placed to advise on power savings and consumption, cooling, space savings — anything that can drive data centre costs down. Those that don’t adopt this approach risk being left behind in an increasingly competitive, changing, and tightening market. Going forward, channel partners will need to communicate with customers in a different language that goes beyond tech and encompasses financial and ESG literacy. This will necessitate training.
2023 will see a strong adoption of flexible consumption models
The current economic climate has created conditions for a solid increase in subscription model adoption in 2023. This is driven by strong customer demand for more OpEx options in storage hardware and software purchasing to avoid large CapEx outlays. The channel needs to recognise that subscription transition is an attractive proposition to customers, offering them new recurring revenue streams.
Transition to subscription solutions creates new possibilities for partners to build peripheral services around a customer solution. However, there needs to be an evolution of the compensation model for those selling subscription services. Vendors and partners will need to work closely together to make subscription an attractive and profitable model for customers, and for partner sales teams as well. In 2023, partner programmes will play a critical role in incentivising and motivating the channel.
ESG is now a top three issue for customers
It’s clear that ESG is a high priority for the channel and customers. Many partners are creating mini boards or steering committees to address the issue, and sustainability is now a top three criteria in all RFPs we receive. Customers are demanding that ESG be addressed, and partners need to be able to respond accordingly.
From a storage perspective, this trend will accelerate in 2023, regardless of the economic downturn. A key reason for this is that if a storage vendor can demonstrate an 80% reduction in power and cooling costs, this will become very compelling to customers both in terms of ESG commitments and the desire to reduce costs.
Customers are crying out for sustainability champions who can help them differentiate in their markets and futureproof business models. The channel can fulfil that role. With the right preparation, the partner ecosystem can show customers how to undergo the changes they need with minimal pain. If we get this right, we will jointly become long-term partners in their growth journeys.