COLUMN: The Big AI Mistake

CRN’s Steve Burke says new market dynamics around artificial intelligence require a different channel calculus.

The partners that got you here may not be the ones that get you there.

The top mistake being made by vendors and solution providers looking to get a first-mover advantage in the AI era is not putting enough effort into identifying and investing in the right partners.

Every major technology shift that has taken place in the modern IT channel in the past four decades has brought a new set of vendor and solution provider winners and losers.

The biggest issue surrounding AI today is that the cataclysmic changes are taking place at a much more profound and disturbing rate than ever before. That means there are going to be many vendors that will find themselves struggling to drive AI solution sales because they do not have the right channel partners at the right time to scale that business.

The same, of course, is true for solution providers, many of which are going to find that staying pat with the vendors that got them to the dance only ensures they will miss the AI party.

The new AI market dynamics will require a different channel calculus than in the past. That’s because the level of up-front investment companies need to make is an order of magnitude greater than it was for any other market transition, including cloud computing.

AI requires a massive internal investment to leverage GenAI and new models to become more productive. The investment will profoundly change the P&L, leading either to a big competitive advantage or disadvantage.

There is no better example of the fact that you need the right investments to succeed in the AI era than Nvidia. The reason Nvidia dominates the GPU market is because of the astronomical investment it has made to power the GenAI revolution. That investment has paid off in a $2.63 trillion market capitalization.

But from the solution provider side of the equation, if you want to understand just how big and profound the investment required to be an AI leader is then you must read CRN’s cover story on World Wide Technology, Nvidia’s 2024 Americas AI Enterprise Partner of the Year.

The focus of the story, written by Assistant News Editor Mark Haranas, is on how Jim Kavanaugh, the co-founder and CEO of St. Louis-based WWT, is rearchitecting the $20 billion solution provider behemoth for the AI era.

Under Kavanaugh’s leadership, WWT is investing $500 million into helping customers be successful with AI. That investment includes a state-of-the-art AI lab and a huge investment in retraining and restructuring the company’s workforce.

WWT also is hiring data scientists at a rapid clip and working with early stage innovative AI startups like big data specialist Dataminr.

The WWT playbook for AI success is a tribute to Kavanaugh and his team, who have successfully transformed the company for every major technology transition in the past three decades.

“We are an AI-first company,” said Kavanaugh.

That begs the question that every solution provider and vendor should be asking themselves: Are you an AI-first company too?