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Bennett Wong is a seasoned leader with strong business acumen and insight, having successfully partnered with global vendor partners and driven channel sales leadership and engagement. With over 20 years of experience in the Asia Pacific IT distribution industry, Bennett has in-depth knowledge of the IT ecosystem, including market conditions, developments and trends.
Once a concept mostly studied in science fiction and academia, Generative Artificial Intelligence (Gen AI) is now a major topic of discussion in homes and boardrooms around the world. In the year since the release of OpenAI's ChatGPT, the technology has seen a major level of democratization and mainstream application in business operations.
As macroeconomic uncertainty continues to impact the global economy, CEOs are turning to these Gen AI advancements to deliver optimization and increased efficiency.
As macroeconomic uncertainty continues to impact the global economy, chief executives are turning to these generational AI advancements to enable optimization and increased efficiency, which is driving AI spending in Asia Pacific to grow at a compound annual growth rate of 24.5% to reach $49.2 billion by 2026.
As demand soars for fast-growing technologies like Gen AI, cloud, cybersecurity, and networking, the channel partner ecosystem has emerged as a stabilizing anchor for technology vendors, resale partners, and SMBs and mid-market businesses.
Channel Changes
Channel partners have always been key players in the global IT ecosystem, serving not only as a resource for implementing new technologies but also as facilitators of the adoption of these business solutions. As the demand for enterprise AI grows, partners are guiding companies through fundamental changes to their technology stacks while shifting their own strategies to adapt to the evolving market.
According to Tech Data's “Direction of Technology 2023” report, partners in the Asia-Pacific and Japan (AP&J) region are recognizing the transformative potential of fast-growing technologies and are strategically expanding their portfolios to align with changing and growing demands. 40% of partners plan to offer AI/ML solutions in the next two years, nearly double the 19% in 2022. More importantly, partners also recognize the value of foundational services like accurate data, useful analytics, and secure storage needed to make the most of emerging technologies like AI.
Focus Components
Interest in adopting Gen AI has never been higher, but CTOs and CIOs are being cautious not to take on more than they can handle. Many CTOs and CIOs are now considering whether to buy or build Gen AI capabilities, and then working closely with the channel to either modernize existing technologies or acquire new ones. This has seen a few products rise to the top of their priorities.
According to our 2023 Technology Directions report, secure storage accounted for 60% of channel partner revenues over the past year, driven in particular by the exponential growth in enterprise data volumes. Data and AI infrastructure go hand in hand, considering AI algorithms require large amounts of accurate data to deliver accurate results. Hybrid cloud was the next most popular, accounting for 46% of channel partner revenues, as scalable cloud platforms provide flexibility and resources to deploy and manage AI applications. As data volumes and reliance on the cloud increase, cybersecurity emerged as the top-selling technology, accounting for 63% of the total in 2023.
“Hybrid cloud accounted for 46% of channel partner sales as scalable cloud platforms provide flexibility and resources to deploy and manage AI applications.”
Take the Right Approach
AI is transforming enterprises in incredible ways, creating new, more efficient ways of doing business. AI is also creating significant new business requirements that are fundamental to its success, from the underlying technology to stronger governance and skills. As the pace picks up and enterprises work to build capabilities, a holistic approach that encompasses and delivers on all aspects, especially those required to adopt AI effectively, is critical.
As fast-growth technologies are increasingly adopted, the average organization has multiple vendors in their IT stack, which is often siloed. This prevents standardization and optimization, which can negatively impact business performance and outcomes. Moreover, as fast-growth technologies take hold in these stacks, companies need to integrate strengths across the board to ensure they can scale quickly. In this context, leveraging the expertise of a Technical Center of Excellence (Tech COE) is recommended.
The Tech COE simplifies complexity by running end-to-end solution stacks of hyperconverged infrastructure, next-gen solutions, hybrid cloud, and DevOps to certify and enable seamless integration of AI solutions. It is also essential for change management, enabling teams to rapidly implement new technologies and methodologies through proofs of concept and use cases to close the skills gaps organizations are facing in these new technology areas.
Looking to the future
The IT and channel ecosystem will continue to evolve alongside the growing demand for Gen AI. As Gen AI workloads grow, so will the demand for components from the channel, especially secure storage in the hybrid cloud and data centers.
Overall, there is much to gain from companies racing to adopt Gen AI, but the technology they focus on and how they integrate it into their organizations will be key to successful adoption.
