Hardware in the spotlight

The technology requirements of organisations across the UK are shifting as we move forward from the pandemic. Comms Business examines the place of hardware within the channel ecosystem.

Hardware used to be the lifeblood of the channel ecosystem. Devices in boxes were shipped around the globe and the channel was there to help businesses make the most of their investments. As the software market has matured, hardware has oftentimes found itself playing second fiddle to software. Yet these physical products remain a core component of many customer project briefs for resellers, MSPs, and other channel companies.

So, what hardware is in demand right now? Frank Hulshoff, chief commercial officer at Flex IT Distribution, pointed to shifting workplace habits as a big driver here. He said, “We see a clear increase in the demand for hardware that is aligned with office work, or to establish permanent home offices such as PCs, screens docking stations and server storage. Laptops have fallen in demand, presumably because most people have at least one at home following the lockdown period.”

Similarly, Luke Grieveson, customer experience manager, NTA, said, “We have seen an exponential increase in demand for hardware featuring Bluetooth and Wi-Fi capabilities. This is due to the increase in remote working.

“Users are adapting their working habits to use more equipment such as Bluetooth headsets for a flexible hands-free environment. Connecting their handset to Wi-Fi also allows users to work from any location with connectivity and power, as opposed to being tethered to their ethernet connection.”

Grieveson added conference-related hardware looks to be in decline. He said, “On the other hand we have seen a decline in the demand for conference hardware since the pandemic. With the increase in home working, video conferencing technology has advanced rapidly and has become far more accessible. This is the beginning of the phase out of conference-related hardware. Consumers find that web and PC technology now offer a far more superior product.”

Stephen McIntyre, marketing director, Nimans, is seeing different movements. He said, “Meeting room systems, all forms of hybrid work enablement tools such as higher quality noise cancelling headsets, speakers phones and quality personal video conferencing cameras that are more than just webcams. Then there are the tools to connect all of the meeting products like routers and POE switches, they are all in demand. Teams’ capable handsets are still very much in demand. As people evaluate new working norms, access control systems linked to hot desk booking capabilities are on the rise, making unmanned receptions a workable, secure and seamless solution.

“Sadly, on premise “tin” PBX systems are in decline so much that Samsung and Panasonic have pulled out of the market completely. Those remaining have pivoted to more flexible cloud-based offerings like NEC’s Univerge blue.”

Businesses are also investing in their connectivity, leading to heightened demand for associated hardware. Craig Walker, head of SaaS integration at Alcatel-Lucent Enterprise, explained, “There’s an undeniable push from customers for faster, more flexible and highly secure networks to support their users, the proliferation of IoT devices and applications as they digitise every aspect of their business.

“Old monolithic networks don’t fit the new way of working and wireless has become the defacto standard for connectivity. This has led to a strong demand for a network infrastructure refresh. Wi-Fi 6 technology in particular is in demand, together with the intelligent edge and ultimately core switching required to meet the data throughput and traffic flow requirements.

“For devices used for real-time communication, the PC is nearly always connected wirelessly and we’re seeing the same demand for wireless connectivity for the desk phones as well, as customers migrate to IP telephony and unified communications. This shift is exacerbating the decline in the number of wired handsets required, especially the analogue and TDM technologies.

“However, there is still hardware required to support software-based communications and UC. We see strong demand for good quality headsets and video cameras where desk phones have been replaced. Although a handset on every desk may now not always be the norm, huddle room handsets with superior audio quality made of durable materials and which are easily sanitisable, still remain valuable.”

Mark Pillow, managing director, Voip Unlimited, “In terms of hardware, desktops are obviously in significant decline. With equally powerful laptops available while also providing portability, it’s a no-brainer. Even in office settings, virtualisation offers the ability to source cheaper terminals while offloading computation to on-site or hosted services for an even cheaper OpEx strategy.

“The move to cloud solutions and home working has also pushed many to bin their handsets and use headsets instead.

“Some may assume that headsets are a non-starter considering the consumer demand for wireless headphones, Airpods and the like, but no. Seamless device switching, battery life, wear and tear, and accidental damage are major factors for people preferring a headset over their own.”

Winning hardware offerings

The Channel has always thrived on taking a product and developing a compelling offering around it. That tactic is still broadly the standard for resellers and MSPs looking to develop winning hardware offerings.

Nick Bannister, vice president sales for Arrow’s enterprise computing solutions business in the UK and Ireland, emphasised the importance of a solution-led approach. He said, “The key to successful hardware offerings is to focus on delivering the solutions that address the problems and requirements of the end-user.

“It’s important to consider markets and demographics, and adopt solution-led strategies that meet both business need and return on investment at a consumer level. An eye must always be kept on future-ready technologies such as AI and edge computing.”

Of course, price remains a sticking point for many businesses, but it is not always the core consideration. Flex IT Distribution’s Hulshoff said, “Pricing remains a crucial element in the mix – especially for new products. However the success [programmes] where the vendor is actively promoting a circular offering show that there is more than just pricing to be considered. There is a circular story that customers really want to be part of.”

McIntyre, from Nimans, highlighted the strengths of a bundled approach, as well as staying close to customers throughout the entire purchasing journey. He said, “By providing excellent pre-sales support to ensure the hardware chosen will do the required job in the best possible way, by ensuring things are delivered where and when needed in a timely manner and then enhancing their profit margins by adding service wrap to their offerings to make the stickier with their customers and having the right levels of support available whenever it is needed.

“Bundling of products to ensure they don’t leave any money on the table in any project roll-out. When selling a conferencing system, ensure they offer a range of quality screens to go with it, brackets to hang the screens, room booking tablets to hang outside the meeting rooms, Wi-Fi routers if needed and even the HDMI cables to link them together.

“Think of the complete solution, not just the hardware requested. Taking it a stage further consider the Teams system they have in use and offer call services that integrate with Teams or SBC’s to have direct routing in teams.

“Resellers and MSPs need to think all the way through the UC technology stack to squeeze as much value out as possible.”

Channel companies can also demonstrate their value through connecting the dots between software and hardware. Walker, from Alcatel-Lucent Enterprise, said, “Software and SaaS need to be delivered to the user with the right quality of experience, wherever they are. For that, there needs to be the right hardware infrastructure underpinning the service. This is where resellers and MSPs need to have the supporting hardware offerings, otherwise it’s the software and their services that get the blame.

“A good relationship starts with shared values and resellers, and MSPs should engage with partners that share their focus on customer needs to provide success in their industry or sector. MSPs and resellers need to work with a manufacturer that can provide both the robust technology and the flexible business models to match the services and procurement method customers are looking for.”

The circular economy

As businesses and consumers alike consume more and more hardware, there is more consideration of the impact this might have on the environment. Hardware recycling initiatives are becoming increasingly significant, with some clear opportunities emerging for the Channel to assist their customers with their own sustainability objectives.

Hulshoff, from Flex IT Distribution, said, “Hardware recycling is key to circular offerings. There are several companies such as Flex IT who offer ITAD services. The fact that a client does not have to worry about the data on his obsolete products and the recycling is done in a responsible way, makes a lot of difference to the user experience.”

Walker, from Alcatel-Lucent Enterprise, added, “Generally speaking, recycling is now included on most tenders which is a huge step forward in lessening our impact on the environment. Many businesses want to make sure equipment is being recycled or disposed of responsibly and the Channel has an opportunity to take the complexity away and demonstrate just how well they will dispose of the replaced equipment, such as a zero to landfill policy.

“Additionally, in the current market, where chipset shortages are affecting supplies, it’s becoming increasingly important to be agile and explore new options when it comes to manufacturing hardware. The current situation presents a great opportunity to onboard with alternative vendors and re-evaluate operations.”

Perfect partners

For distributors, resellers or MSPs that are looking to identify the best hardware vendors to partner with moving forward, there are several aspects to consider.

Grieveson, from NTA, said price is often a primary consideration, but there are other elements that could prove more significant in the long-term. “Choosing to partner with a hardware vendor based on price is a common deciding factor for many businesses. However, the impact of a bad returns process with a vendor could become costly and time consuming for all parties involved.

“There will always be issues beyond your control, but educating yourself and identifying how vendors deal with different processes such as missing deliveries, returns and damages are an essential part of running successful day to day fulfilments.”

Jeff May, UK sales director at Konftel, said distributors, resellers and MSPs should do their research and ask specific questions from hardware vendors. He added, “From our point of view, we need to make information easily available so that informed decisions can be made. New products are continually coming to market where all parts of the supply chain need to be kept informed.”

Flex IT Distribution’s Hulshoff said the answer is not always clean-cut. “Beauty is in the eye of the beholder and the same goes for vendor selection. Every big vendor has something to offer in terms of the product, financials and suppers. What suits the distributer or resellers best should determine who they want to partner with.”

Arrow’s Bannister emphasised the importance of working with partners that have a vision for the future. He said, “The best hardware vendors are those that are looking ahead. The relationships that add the best value are those where your distributor, reseller, or MSP can articulate where the market is shifting and guide you towards it, rather than simply fulfilling requirements for the here and now.

An ear to the ground

When asked what trends he expects to dominate the hardware space in the near-term, Hulshoff, from Flex IT Distribution, said, “It is an interesting time. I expect that we will see pressure on the margins in the hardware market for the foreseeable future. The Covid period has seen as huge spike in sales and those products are now at the desk of the end users. This means we will see a decrease in demand which will lead to prices being under pressure.

“There will be an increase in interest for circular products due to regulations beginning to take shape that will force the public sector to have a certain percentage of circular products in their IT infrastructure. This is something we already see in France, for example.

McIntyre, from Nimans, expects Microsoft Teams Rooms enabled hardware to be a priority for many organisations across the UK over the next year or two. He added those devices should “provid[e] an equitable meeting experience whether you are in the meeting room or joining from wherever you choose to work”.

Walker, from Alcatel-Lucent Enterprise, said, “For us, cloud management, AI integration, IoT connectivity and security and API connectivity are set to become trends in the hardware space and with these trends come the realisation that what is in place today is not necessarily going to be able to provide the infrastructure for the outcomes required tomorrow.

“This will mean lots of upgrades to existing solutions and in some cases complete redesign and replacement. This is also an opportunity to introduce additional vendors and types of equipment, even change strategies – leading to an openness to and need to consider others outside the usual incumbents.”

That chimed with the view of Bannister, from Arrow, who also pointed to hardware that supports cloud and data as ripe for investment. He said, “Edge, AI, and ‘as a service’ models will continue to be important in this space. Opex-based models with the same data centre requirements as those that can offer ‘everything as a service’ at a cost and margin that’s palatable for the channel will succeed.

“As more data moves to the edge, the ability to tap into and put this data to good use using edge and AI technologies will become an even larger end-user prerequisite.”

Link Renick, marketing executive, NTA, pointed to the upcoming copper switch off as a driver of new hardware investments. She said, “We recently released our Landline Adaptor to convert traditional telephone systems onto VoIP. We expect this to be an in-demand product as more and more resellers begin targeting residential customers ahead of the 2025 switch off.

“Many providers have or will be looking into creating hardware that suits these newer consumer markets. Ironically, in the past the forefront of hardware development has always been focused on creating devices that are all singing and dancing.

“We are now looking at markets who would rather have things stripped back to basics. It’s been vital for us to create hardware for the future that is not only simple and easy to use but can be continually developed to meet the demands of a wider range of consumers.”

This feature appeared in our July 2022 print issue. You can read the magazine in full here.