Growing dominance of online coupled with new devices like tablets; smart phones are reshaping the market. Digital medium and interactive web are providing the customer a powerful voice that is disrupting the traditional marketing approaches of enterprises. As a result, several CMO processes are impacted and newer processes are evolving. It is a huge opportunity.
I recently attended Nasscom’s event on “Marketing disrupted” discussing about Marketing and Technology aspects and how CMOs are turning out to be CMTOs (Chief Marketing Technology Officers). Further Mr. Sudin Apte from offshore insights has briefed on the research findings on how digital deluge is impacting marketing functions. It’s also clear from the discussion that now is the time for offshore service providers to understand -the opportunity, the industry-specific requirements, and the complex ecosystem -and build capabilities to address the opportunity. As per the Nasscom report “Marketing Disrupted” emerging technologies like big data, mobility, analytics, visualization, personalization, web and digital assets management must work in tandem to deliver the desired results.
It’s time for CMOs and CIOs to start forging true, strategic partnerships, so both marketing and IT can begin sharing ownership of both goals and outcomes. After all, the business landscape has shifted, and it’s no longer marketing that drives business growth – it’s digital marketing that drives business growth. CMOs and CIOs alike must recognize that technology and marketing are now inextricably tied, and that future success depends on the creation of a totally new kind of cross-functional organization.
However, there are major shifts that are threatening the viability of this community and it’s likely that the majority will cease to exist in the next five years.
The Switch to SaaS
The first major shift is the move from on-premise to cloud-based software and hardware, typically delivered in a Software-as-a-Service format (SaaS). This trend, first popularized by Salesforce.com and now the dominant software model for start-ups in the last 10 years, reduces the need for large on-premise installation projects — the bread and butter of the reseller community.
Deploying SaaS software may still involve setup but the size of this up-front investment is a fraction of its on-premise brethren and why this model appeals especially to SMBs (the IT reseller’s target segment). In a world where most software and hardware is in the cloud, how will resellers earn money?
Surely it will not be from margins granted by the software or hardware they are reselling, which while significant, are the minority of a reseller’s revenue stream.
CMOs Will Control the Budget
The second major shift threatening this industry is Gartner’s prediction that by 2017 the majority of IT spend will be made by Chief Marketing Officers, not CIOs. This is not yet another hype-laden prediction by Gartner as evidenced by the major software houses bulking up on marketing software:
- Salesforce buying $3.5B of assets to build out its Marketing Cloud
- IBM buying CoreMetrics and Unica for $1B
- Oracle buying Vitrue and Eloqua for $1.2B
- Microsoft buying Marketing Pilot and Netbreeze to bolster Dynamics CRM
But the reseller community has grown up selling to the CIO and has all its contacts there. What happens when the primary buyer for resellers is no longer the main spender?
Addressing these challenges is not for the faint of heart and it’s quite probable that most resellers will not be able to adapt. It will demand a rethinking of what services resellers offer and even how they generate business.
The continuous evolution of the digital world has resulted in the creation of a phenomenal opportunity worth US$37 billion for the global technology industry. While this hints at brighter prospects, the opportunity differs from traditional technology. To leverage this opportunity, the Indian technology industry needs to take a holistic view and think outside the ‘technology box’.