Somebody has hacked a hot tub.
I'm serious – this isn't a joke or exaggeration. Security researchers successfully breached the backend network of a smart hot tub brand. By exploiting holes in commonly used software components, they gained admin status to the entire network, using their connected hot tub as the access point. Vice Motherboard has published a breakdown of the hack – it's interesting reading.
But so what? So some hackers can meddle with hot tub settings – is it a big deal? Putting aside that access to a backend network is a serious concern, I can see where you are coming from: we have bigger fish to fry than hot tub security.
Or do we? Hot tubs join a growing list of items we don't typically associate with digital. From hacked air conditioners to cars, such reports demonstrate digital's reach into everyday life. In that sense, a hacked hot tub isn't a novelty. It's a demonstration of the risks created in a digital world.
Grasping at the significance of a hacked hot tub is an excellent allegory for what companies face. They use and invest in digital as a means to an end. They don't have the time or motivation to explore the nuances of a digital world. But that approach creates significant risks.
Channel companies' future value and success depend on how they help their customers make sense of those risks.
Risk can be negative or positive. It can lead to opportunities or challenges. What's important is to grasp that digital transformation is creating many new risks, some that are exotic and might even seem ridiculous, such as hacking a hot tub. Hence, we often speak about building a relationship with customers, understanding their strategy and acting as an advisor around how technology and business combine.
Derisking digital is becoming a crucial topic. Research by McKinsey proves that risk management has not kept pace with digital projects and the rush to digitise during the pandemic compounded risks. Digital is creating more risks, and companies are discovering that it's not easy to untangle those risks.
McKinsey relates a case study to that point: a bank realised its developers were using shortcuts that put sensitive information at risk. While resolving that issue, a problem emerged with their applications – it was severe enough that the bank nearly reversed most of its digital culture changes. Yet had they invested in sufficient monitoring of the applications, they could have avoided a cascade of issues.
The bank's service providers could have helped avoid those issues by motivating monitoring, a straightforward best practice to reduce digital risk. They had a good vantage point to see the customer's digital strategy and point out crucial blind spots. While the customers are in the thick of things, service providers can wade into the action and offer fresh perspectives.
Maybe they did – you can lead a customer to a solution, but you can't make them adopt it. Still, my point is that we in the channel have an advantage and a value that our customers can rarely create alone. We know that the hot tub is vulnerable and how compromising it can impact our customers. They often don't.
Channel companies aren't immune to digital transformation. We must change how we operate to help our customers change. This change means more than adding new products and skills. It requires a new attitude. Successful channel companies need three ingredients: strategic wisdom, agility and partners.
Most of the above explain the wisdom: can you grasp your customer's strategy and make wise recommendations to reduce digital risks? Agility is important: can you add and enhance solutions as your customers' needs evolve? And partners underpin that agility: do you have access to a network of partners with alternative skills and products that you can use?
At Axiz, we're hard at work maturing such a model. Our business has always been about supporting our channel partners and their customers. That picture is expanding to include cloud services, training, finance, and cultivating an active marketplace where our clients can combine their strengths. The more we enable our clients to supply strategic and digital risk wisdom to their customers, the more we will thrive.
And so will channel companies. You don't have to replace what you do. Many channel business models are still sound and lucrative. But today's businesses need more than hardware and software. They want to know how to identify and mitigate digital risks. Even if they don't realise it, they want to understand why hacked hot tubs represent more than a funny headline. In a world where digital is everywhere, it's the channel companies that can answer such questions that will add real value.
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