Back to the Future: The Cubs, the Channel and, of Course, Millennials

By Craig Schlagbaum, Guest Blogger

Who would have believed it? The Chicago Cubs made it to the World Series! Well, the movie “Back to the Future, Part II” did predict that the Cubs would not only be in the World Series in 2015 but actually win–one year late, but that’s pretty prophetic.

The movie was released in 1989, the same year that I started working in the channel. Even if I had tried my hand at predicting nearly 30 years into the future, I don’t think I would have even been close to foreseeing what is happening in the channel today. 

It’s an exciting time–and it’s not too difficult to predict that the excitement will continue. Business is expanding; mergers and acquisitions are creating enormous change, and; millennials are getting into the channel, bringing with them new thinking and inspiring crucial shifts in technology.

Back to My Future, or the History of the Modern-Day Channel

It brings to mind the channel evolution I’ve personally witnessed, starting with watching my father, who helped to create and grow the current IT channel at IBM from its infancy in the early 1980s. He and many others were part of this incredible revolution. He went to work for IBM in the late 1960s. In those days, IBM was selling things like typewriters, dictaphones and, years later, copiers and word processors (the predecessors to PCs).

Of course, mainframes and mini computers were IBM’s main business. But, in the early 80’s, when IBM created the PC, it decided to keep that group separate from the core computer business, and this “secret product” needed a channel through which to sell it.

The team started to build a new distribution mode, and it initally started with IBM operating its own product centers that were eventually sold off to Nynex (which is now Verizon) as some of the first IBM “dealers.”  This fascinating article in the Chicago Tribune from 1986 states that there was one main reason Nynex was involved: TELECOM.  

“What we bring to the party is telecommunications expertise. We are going to be the No. 1 nationwide channel for bringing telecommunications and personal computers together. Connectivity is the future of this business, and that’s our strength.”

Connectivity! Sound familiar?

IBM sold PCs to its Fortune 1000 accounts only with its own direct sales force initially. And this eventually introduced an issue known as “channel conflict,” but that is a story for another day. Shortly after selling off the IBM Product Centers to Nynex, IBM added other authorized dealers, including Computerland, Inacom, Microage, Businessland, Intelligent Electronics, Compucom, and some other national PC organizations and franchisors. Of course, eventually IBM added Ingram and Tech Data, as the authorization model opened up to the masses. But what was quite small then, numbering in the hundreds of dealers, is now estimated to be 150,000 or more solutions provider partners today.

After an early start, the channel over time expanded and evolved into what it is today. After IBM brought the PC to market, Compaq started selling PCs, trying to replicate what IBM was doing but with Intel-based systems. Apple was selling different systems, too. And the competition became fierce.

Like our friends from “Back to the Future, Part II,” my father had some of his own foresight to share. After I left school and tried some entrepreneurial ventures that misfired, he advised, “You should get into this IT industry and start selling–it’s only going to get bigger.” Given my budget and bank account at the time, I thought this was an outstanding idea!

I started at Businessland selling business-to-business PCs and booked my orders on a Digital Equipment VAX green-screen dumb terminal. I sent my prospects letters that I typed on a typewriter at my desk (no PC) and sent to them via good-old snail mail. Later I landed at IBM selling software for Lotus. In those days, everything was about client/server computing–the grandfather of cloud–but it wasn’t scalable like cloud is today.  

So, yes, things have surely changed! But, looking back on the seismic shifts in telecom and IT can give us clues as to what the channel will look like in the coming years. As in the past 30 years, the years ahead are sure to be explosive and ever-changing. Millennials will have an incredible impact, and we will likely see cloud continue to accelerate. The Internet of Things will become mainstream, and SD-WAN will likely become a force. The evolution of networking and virtualization has so dramatically shifted the computing world; it’s clear that tomorrow is going to be more about mobility and the Internet of Things, as well as great networks to keep all of these apps running well.

Just as Nynex predicted the importance of PCs and telecom working together in 1986, we can make some informed decisions about where we want to focus our careers and our energies over the next years. I’m betting on the channel being of major importance for the next 25 years and beyond. What is your bet?

Craig Schlagbaum is Vice President of Indirect Channels at Comcast Business.