WWT CEO: 5 Channel Tips To Adapt To Cloud Operating Models

‘Hardware margin and software and just selling product and potentially services to customers, that’s changing,’ World Wide Technology CEO Jim Kavanaugh tells CRN.

Jim Kavanagh: How To Adapt And Thrive In A Hybrid Cloud World

World Wide Technology CEO Jim Kavanaugh says channel partners need to change their go-to-market mindset and shake up their sales strategy – even if that includes cannibalizing business units -- to adapt to modern cloud operating models.

“Hardware margin and software and just selling product and potentially services to customers, that’s changing,” said Kavanaugh, one of the nation’s top solution provider CEOs and thought leaders who built WWT into a $13.4 billion company over the past three decades.

WWT, which plans on hiring more than 1,000 new employees this year, is a Microsoft Gold and Google Cloud Premier partner as well as one of AWS’ top global consulting partners. The St. Louis-based IT services and consultant star is also one of Cisco’s and Dell Technologies largest and most strategic partners in the world.

Kavanaugh talks to CRN about what channel partners need to do to be profitable in the new hybrid cloud world where reliance on product margins simply won’t cut it anymore.

Cannibalize Some Business Pieces If Necessary

The overall industry is being disrupted. Company CEOs and their board are looking at, ‘What is my digital transformation strategy to leverage digital to rethink my business?’ And it may be cannibalizing pieces of their business.

I have to look in the mirror and say the same thing is happening to the channel industry. Hardware margin and software and just selling product and potentially services to customers, that’s changing. We need to be very agile and innovative to make sure that we are moving at the right speed at the right time and potentially cannibalizing pieces of our business if we need to.

If a company isn’t talking about where they’re going from a digital acceleration standout and digitalizing their business, they’re going to probably get disrupted and put out of business. Because that has to be part of every companies’ and organization strategic plans.

Don’t Chase The ‘Shiny Object’

We are focused on not chasing the shiny object, because I think sometimes, organizations and leaders chase a shining object but don’t know how to monetize their plan. So there’s a lot of integrators and resellers that have chased recurring revenue and SaaS. When you’re not a software company, it’s hard to do that depending on the model or the managed service model. Those are areas that you need to be very focused on in figuring out in how you get there, but from my perspective, you can’t force yourself into a spot.

About eight years ago, we knew we needed to get not only into the infrastructure side but how do we connect infrastructure to outcomes. That requires software development. It also requires management consultants with the skillsets.

Double Down On Being A Services-Led Channel Partner

We are doubling and tripling down on services-led. Being services-led helps extend and improve the value proposition to our customer of helping them evaluate the complexity of [hybrid cloud] -- they’re not going to build out everything on their own private infrastructure. So how do we help them on the IT infrastructure side evaluate what they should be building internally, but then how do they connect them securely and efficiently to the public cloud environments.

Then we have to figure out how do we get value both on helping them consume and buy services to build out their IT infrastructure, but also working with these big cloud providers to figure out what that relationship is. That is continuing to evolve.

Having Software Development Capabilities Is A Must

One thing we have uniquely done from a traditional system integrator standout, is that the software development piece of being able to go in and work with the line of business to truly help them think differently and change the way they may look at, for example, the patient experience.

So for example, when we built out capabilities for St. Jude’s [Children’s Research Hospital] we worked with their CTO and president along with other folks around, ‘What is the patient experience?’ So what does the back office need to look like? What capabilities do caregivers, doctors, therapists need, but also what your patients need so when they come in, they have a platform that is going to enable the patient very differently. … Software developers help enable the back office and the customer experience, the patient experience, the fan experience, etc.

Partners Need To Drive Business Outcomes

There’s a lot of moving parts in our world today in the VAR and system integrator space. From my view, we are leaning in aggressively around being services led, but doing it in a way that you’re talking about networking, data center, security, voice, video, collaboration; and then have management consultants and software developers to enable the back office and the customer experience. Customers sometimes go to a vendor and the vendor says, ‘Well I’ll do this piece, but I’m not ensuring the outcome.’ So we want to be able to work with customers to help work through the complexities of those pieces, but also help them get to driving outcomes that positively impacts their business.