AI And The Channel: It’s Go Time

Solution providers that aren’t getting into the game when it comes to delivering innovative AI solutions to their customers may find themselves sitting on the bench. Here’s who’s come ready to play.

Florin Rotar and his team at Seattle-based solution provider Avanade rolled out a generative artificial intelligence solution for an oil and gas company customer that not only saves time and improves collaboration but could prevent a workplace disaster.

The customer’s field services workers are using the GenAI solution—built with terabytes of semi-structured and unstructured data from 200,000 documents—to diagnose and repair issues with pipelines at refineries, Rotar told CRN. The customer piloted the solution for about three months before going live at scale in the summer.

“That [solution] would normally have required teams of experts to debate and diagnose and figure out what’s happening and how to deal with it because if you do that thing wrong, you could literally cause an explosion that kills people,” said Rotar, who in September transitioned from CTO to become the company’s first chief AI officer.

Avanade is one of many solution providers exploring the possibilities of AI technology when it comes to improving their operations and creating new ways to drive revenue.

‘Throw Your Hat Into The Ring’

Kristy Davis, global director of innovation and AI at CRN parent The Channel Company, said AI adoption will become the dividing line between those solution providers that are successful and those that are left behind.

“Throw your hat into the ring today because as fast as it’s moving, you don’t want to start from [behind] trying to figure out where it’s coming from” Davis said. “I study LLMs [Large Language Models] and all of what’s happening on a daily basis, and I am shocked at what’s happening. … It allows us to do things today that we couldn’t do before. So if I wait for that, I’m going to be beat to market. And that’s not a fun place to be.”

Solution providers are now making choices about which vendors to team with as they build out their AI practices, with 55 percent saying they have selected Microsoft and 53 percent saying they have selected Microsoft-backed OpenAI, according to a survey of 300 respondents conducted by The Channel Company.

Avanade—No. 33 on CRN’s 2023 Solution Provider 500— was founded in 2000 by Microsoft and Accenture, No. 1 on the same list.

Fittingly, it’s Microsoft technology that fuels the solution provider’s GenAI practice.

Rotar told CRN that Microsoft’s copilot tools, which promise users the ability to produce content based on queries entered in simple, natural language, are “taking off like wildfire” as Microsoft rolls them out within its popular productivity and business applications.

“I do think that this is going to go way beyond just productivity and actually help us to gain new skills to maybe realize our potential. I know that sounds grandiose, but I really think that, if done right, the copilot concept in general has tremendous power,” he said.

Of course, Microsoft isn’t the only game in town. Almost 41 percent of survey respondents named Google as the vendor they work with or plan to work with, and about 39 percent named Amazon Web Services (AWS).

Meanwhile, about 22 percent of respondents named Nvidia as their partner of choice, and about 20 percent of respondents named IBM.

AI Is The ‘Magic Word’ For Customers

The promise of AI has captured the imagination of solution providers’ customers, with almost 50 percent of survey respondents saying they have received inquiries from customers about using GenAI or LLMs in their business.

Chris Bogan, vice president of sales at Mark III Systems— a Houston-based solution provider whose partners include Nvidia and IBM—said that for customers, AI is “the magic word” for freeing budgets because of the potential to save money on operating costs.

“If it’s tied to an AI project … it’s still blazing through,” he said. Customers expect that a project as transformative as AI results in cost savings, he said.

Alexander Ewing-Shaw, partnerships manager at Sunrise, Fla.-based Chetu—No. 262 on CRN’s 2023 Solution Provider 500, whose partners include Microsoft, Salesforce, AWS, Oracle and IBM—said customers from all industries want “to get their foot in the door in terms of AI.”

Customer Data Is Critical To AI

Gireesh Sonnad, CEO of New York-based Salesforce solution provider Silverline, told CRN his team is at work preparing customer data for AI.

“AI is fantastic, but it needs data,” Sonnad said. “And it needs data in the right way in order to be able to do the right things for you. So get that right so you can drive the other stuff.”

He also sees potential for Salesforce AI demand for middle- office workloads—risk management, corporate strategy—and not just the front-office sales and customer service functions that are more popularly associated with the vendor.

For healthcare and financial services firms, data is critical to operations, which is why these companies are early adopters of AI, according to Chetu’s Ewing-Shaw.

“Being able to not only expedite processes but increase care when we’re talking about health care, you can see AI being able to do that,” Ewing-Shaw said. “And in terms of lending [with financial services firms], we’re talking about being able to handle things such as credit-scoring platforms, lending platforms and everything associated with those industries.AI is applicable to all of that. It’s just a matter of really getting down to the minutiae and the details of how that can be applied to those platforms.”

Solution Providers Building Their AI Expertise

About 11 percent of respondents in The Channel Company’s survey said they already have full-scale AI and LLM implementations internally. Meanwhile, another 11 percent haven’t yet considered the technology for internal use.

The Channel Company’s Davis recommends solution providers try out the technology internally and then think about the ways it could translate into an offering for customers.

“This gives you a foray into the idea of how it works, what you need to do and, quite frankly, you can probably do this pretty easily with somebody on your staff that has an engineering mindset,” she said.

Mike Strohl, CEO of Concord, Calif.-based E360—No. 120 on CRN’s 2023 Solution Provider 500, whose partners include Microsoft, Google and AWS—said the solution provider has formed an in-house AI think tank, executive council and center of excellence.

Previous think tanks at E360 only consisted of technical people, said Strohl, whose company employs about 240 people full-time. But this one has required the director of digital marketing, head of human resources, head of finance and head of security to be included due to how widespread AI’s effects are likely to be.

“It’s going to be gigantic,” Strohl said.

E360’s first AI-themed offerings will likely be around security, modern infrastructure and digital workspaces, according to Strohl. An AI governance, risk and compliance framework workshop and consulting practice are top of mind to educate the solution provider’s customers so that they don’t accidentally expose proprietary data.

Those early-stage engagements with customers should help E360 become their trusted partner throughout the AI adoption journey, he said.

“If you are a strategic security partner to your customer, then you have the opportunity to become the primary consultant all the way through,” he said. “That’s the strategy.”

Chetu, for its part, is at work developing its own AI platform for employee training and development, Ewing-Shaw told CRN.

AI’s Ripple Effects

Kelly Ireland, founder, CEO and CTO of Orange, Calif.-based CBT—No. 472 on CRN’s 2023 Solution Provider 500—said all of CBT’s customers, from manufacturing to construction to utilities to health care, have expressed interest in AI. AI hype has brought a chance to put even more attention on the computer vision and video analytics specialty her company has carved out in recent years, she said.

As AI grows, customers will need solution providers to help educate them on the technology’s many flavors and nuances.

AI “is a catch-all,” she said. “Let’s get more into the specifics of what you’re actually doing.”

Just as when cloud and IoT began to proliferate, solution providers will need to show expertise and quality work to rise above ones that exaggerate their AI prowess.

“Is there a bad side to AI? Yes, there is,” she said. “That’s where you work with reputable people who can showcase [their expertise]. … So making sure that VARs, that SIs, that solution providers invest, learn, have integrity and honesty and put the work in to be able to support this, to me, is always what’s the most critical.”

As for Avanade’s Rotar, part of his responsibilities as the solution provider’s CTO-turned-chief-AI-officer is championing a school of AI to train all 60,000 people in the company.

“We’re basically looking to train the entire company on topics like basic understanding of what generative AI is and isn’t,” he said. “To train them in the basics of responsible AI and digital ethics. We want to train everybody on prompt engineering because that’s going to be a skill that you are going to need as much as you, frankly, need to know how to write an email today or browse the internet.”

When asked if Avanade has ever before mandated that the entire organization learn about a technology, Rotar said no.

“Not even when we went cloud-first. Not everybody had to know cloud,” he said. “But now we’re calling it ‘AI-first.’ And literally everybody needs to know AI.”