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IDC: Partner differentiation paramount in 2014

24 Feb 14

As SaaS, PaaS and IaaS commoditises traditional offerings, differentiation is the key to partner survival.

That's the view of analyst firm IDC, which claims the cloud is based on more consistent architectures necessitating fewer customised products.

As a result, IDC believe this sets up greater vendor price competition and makes it difficult for partners to attain healthy margins.

"Partners will not be successful unless they differentiate their solutions and create their own secret sauce that cannot be easily replicated," says Pam Miller, analyst, IDC.

"This has always been the approach of the cream of the crop, but now it is table stakes."

In 2014, Miller expects to see partners demonstrate more vertical and micro-vertical specialisation, develop or acquire deep line of business knowledge, and capitalise on extensive domain expertise in specific business processes.

"We will also see the rise of partner involvement in applications and IP to enable the Internet of Things (IoT), which will require very specific industry expertise and the ability to be on the same page with manufacturing and product development departments," she adds.

"IoT is a green field for differentiation, but it will have challenges for partners, including a very different financial model, based on product embedding fees and end-customer utilization fees rather than payment for implementation services.

"True differentiation will be difficult for some partners to achieve, but at the same time it will spawn significant innovation within the ecosystem and will be a leading indicator of the disruptive power of the 3rd platform."

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