Hitachi Vantara: Not All Partners Ready for the Digital Transformation

It’s been about a month since Kim King took over the channel program at Hitachi Vantara, charged with the mission of helping the 107-year-old company and its partners through the upheaval caused by digital transformation. King, lately of Progress Software, chose Hitachi because the company is making big changes to its business model and its partner model, giving her room to bring new ideas and fresh energy to the table.

Historically, Hitachi has leveraged its partner ecosystem primarily for fulfillment and delivery. As the company looked to expand up the value chain and provide services around opportunities like everything as a service (XaaS) and the Internet of Things (IoT), it knew its partner ecosystem needed an overhaul as well. Hitachi brought in King to make sure that as the company shifted from a delivery-based to a value-based one, its channel program kept pace.

“Not all partners will be ready for this new transformation,” King told Channel Futures. “But if we do our jobs right, we can equip partners with the competencies and capabilities to help them understand where they fit in the ecosystem.”

While admitting that in any major paradigm shift there will be a percentage of companies that just can’t make the change, King stopped short of making predictions about where the channel will be or what it will look like in the next few years.

Kim King

Kim King

“Close to 10 years ago, I thought the distribution model was going to be dead in five years, and look at what they did to evolve,” she said. “They have IoT practices, marketplaces, cloud offerings — they completely changed their model.”

That kind of successful evolution is what Hitachi is aiming for, and a big push will be helping partners collaborate with one another to provide the end-to-end solutions that customers are asking for. King says Hitachi wants to be ahead of the curve when it comes to facilitating partner-to-partner alliances.

End customers that need help with the digital transformation are still looking for “singularity partners” to handle the process from end to end. But in an IoT era, no partner can be all things to all customers. The next couple of years will still see a lot of consolidation as service providers look to buy channel shops that provide them with competencies they’re lacking, but King wants to help partners understand that there are less drastic ways of supplementing service offerings.

“Where the challenge is and what partners need to wrap their head around is really partner collaboration through this transformational change,” she says. “Partners can’t walk in and say they know everything about an IoT world for every vertical that’s out there. They have to understand that being strategic means you have to have focus, and that’s what we want to help our partners with.”

But Hitachi doesn’t feel the need to rush this transformation in its partner ecosystem. The year 2020 gets thrown around all the time as when IoT will reach critical mass, but King says there will still be a sizable chunk of the SMB and midmarket that won’t be ready to make that leap for a long time. She estimates about 40 percent of Hitachi’s partners will be on the leading edge of IoT and analytics capabilities, and stresses that the company is ready to help equip those service providers with those capabilities.

However, King says there’s another 40 percent or so of partners that will be slower to transition, and that those shops will still be in demand for infrastructure solutions and implementation services. While there will always be a laggard 15 or 20 percent of providers unable or unwilling to evolve alongside the market, the majority of the channel should be able to weather the digital transformation just fine.

“It isn’t going to be as drastic a change as a lot of people are thinking.”

For now, Hitachi is in what King calls a “learning mode.” The new program, set to launch in April, will be shifted and tweaked according to the market and partner feedback. She estimates about 12-24 months until both the company and its partners are on solid, post-digital transformation footing. Until then, Hitachi will help partners settle on core competencies and emerging business models, and provide them flexibility to engage either on the front lines or in the second charge.