The Truth About Shadow AI & Tech Adoption With Ikram Khaled

Scott Mann

Welcome to PodMagic, real conversations about solving real IT challenges. I’m your host Scott Mann, SVP Global Sales at StorMagic. We’re always exploring how simple, reliable technology can benefit you and the people you serve, whether you’re running branch offices, retail stores, or supporting customers on the front lines. Our goal is to always bring interesting guests, deliver some value, and have some fun along the way.

And when we talk about delivering value, few people see the full breadth of the IT landscape like today’s guests. He’s navigating the shifts in global distribution and helping vendors find their footing in a rapidly changing market. Joining us from London is Ikram Khalid, Group Head of Vendor Alliances and at QBS Technology Group.

Ikram, great to have you on the show. How are things in the world of QBS today?

Ikram Khaled

Scott, thank you for having me. It’s been great actually at QBS. We’ve just finished our fiscal in March. In fact, we had our company kick off for this fiscal last week and it seems that QBS is well equipped to go into FY27 and achieve the goals that’s been set by the board. So happy days on our side.

Scott Mann

Fantastic, I understand the fiscals, the off-calendar fiscals, because we’re very similar here so I appreciate the changes that we have to go through with the calendar year ending and then Q4 starting Q1. But yeah, let’s dive right into it.

You’ve been in the industry through some massive shifts. We used to talk about distribution in very simple terms, but that landscape has definitely evolved over the years. From your perspective, how has the distributor role changed from simply moving boxes like it once was to actually influencing major solution decisions?

Ikram Khaled

That’s a great question, Scott. So the era of moving boxes was when the sale was pretty much product-driven and technology-driven. And that has changed massively. And when we have come to this type of the world where AI is driving conversations across everywhere, right? So at this point, the customers are not just looking at one technology per se, they’re looking at multiple different technologies.

They’re speaking to multiple different advisors. And the buying audience has shifted drastically from just being procurement to service delivery managers and people who are actually using the products out at the front lines. Where I see QBS and the distribution landscape add value on that is, of course we are the orchestrators, if you want to put it like that, rather than just shifting boxes or moving products from A to B, we want to create an ecosystem where QBS can actually add value to the partners, bringing the right vendors over to them.

Scott Mann

I love that. Yeah, I think we’ve moved from the world of people buying products to people trying to solve business outcomes with solutions, which typically involve many different products.

You kind of touched on this a little bit, but I see if you want to say anything else to add to that. But what does QBS do to differentiate themselves from other distributors in the EMEA market where you guys serve?

Ikram Khaled

I’m not sure if you’re aware, but QBS, the brand has been in the market for quite some time, in the UK especially. And of course we have been growing organically, but also by acquisition. Currently QBS has over 24 different locations across EMEA. What sets QBS apart? Well, that’s a very unique question and I get asked it quite a few times in my regular daily job. So what we’re doing is we’re not just moving boxes or selling products. We’re creating relationships. We are providing the expertise that the market needs at this point, given that there are so many products out there in the market. Finding the right fit is critical. QBS helps deliver that sustainability on both ends, to the vendors and also the resellers. At the moment, we have over 650 plus employees across EMEA speaking over 28 different languages. And it’s all about building those relationships so we can then leverage them off when the technology fits.

Scott Mann

I can imagine the challenges that come with serving such a wide, vast group of countries and languages to have to serve. I imagine you guys work with a ton of different vendors. You probably had a lot of experience with many vendors and some that do things right, some that repeat the same mistakes over and over. From your experience, what mistakes do you see that vendors make and what things can vendors do to try to stand out with the partners within your ecosystem?

Ikram Khaled

One of the standard mistakes that vendors tend to have, or the conception that the vendors tend to have, is that they can go at it all alone and achieve it all by themselves. Vendors do end up creating an attractive partner program, but then they take the resellers as the customer audience for their product, which is simply not the case. What vendors are seeing as a success and as a win is co-selling, understanding what the distributor can add as a value, within the range of the resellers that they’re working with. As you probably know, QBS has over 12,500 vendors on the portfolio. So yes, we have had experience of working with vendors in different stages of their life cycle when it comes to the partner program. But, where we have seen the best wins are the cases where a vendor and a distributor are working hand in hand, identifying the right partners that will take us to the right end users.

Scott Mann

Yeah, I agree with that. I’ve been in the channel industry for a long time and think everyone, partner programs and all that stuff, it’s so cookie cutter across the board. But, at the end of the day, it is obviously about the tools to enable them, but it’s relationships, even from customers to partners and working with vendors and distributors. People sell not what they know as much as they sell who they know. You’ve got to trust the person on the other side. It doesn’t matter what the product is if you don’t trust the person, right? I appreciate that and I definitely say that’s been the way I’ve tried to build my career and structure everything that I do within any of the changes that I’m making within our partner ecosystem as well. So, glad to hear that we’re on the right track with that.

You’re seeing a lot of different changes that are happening across the market, and you guys serve a lot of different countries across Europe, Middle East, Africa. Are you seeing a difference in priorities these days in say, Germany, UK, Eastern Europe, or are we kind of seeing the similar edge and infrastructure challenges becoming a universal, because of some of these larger scale macro-economic issues that everybody’s facing?

Ikram Khaled

Everything that you said does play a part in how the regions actually react to these technologies and these verticals. So, the regional nuances are real. If we are handpicking these regions, for example, say Germany to start off with. Most of the decisions are heavily influenced by the EU AI Act and of course GDPR. Germany is also quite restrictive when it comes to picking the technologies and trying to understand if they can play in those fields while they are keeping the regulatory policies in mind.

UK is a bit more cloud native. I would say we have seen a lot more friction within the UK industry. Enterprises have seen mainly the growth and the advantages in the US side of a business. So, it is easier to have that conversation with end users based in the UK.

But the best region that we are seeing a lot of engagement in is Eastern Europe. The audience over there is open-minded. They’re quite open to have a conversation around the broadness of the technology that’s available and of course experiment on it to see what the success rate looks like.

Scott Mann

I’ve served across Africa, Middle East, Europe, and there’s definitely similarities globally. Everybody always says “my region’s different”. There are differences for sure, but on the higher level everything is pretty unique, and then you have to adjust accordingly for each region. Like, Africa has regulatory issues within running the cloud. So manufacturing looks very different over there versus, in Germany, for instance, where obviously manufacturing is quite large and very different from a regulatory perspective. So, I understand what you’re saying.

You guys have been in acquisition mode heavily, as you mentioned. I feel like I see in the news something new happening with you guys on a quarterly basis, which is probably very exciting to be a part of. What’s the overarching strategy around this as you guys are continuing to acquire and grow across the EMEA region?

Ikram Khaled

Our mission is to be the critical distributor for the vendors that we strategically work with. And of course, the resellers and the partners and the customers that we serve in these markets. Of course, we want to grow the business organically and see how much we can make a difference in the markets we’re existing upon. At the moment, our focus is going to be predominantly in EMEA. We want to strengthen our sales force within EMEA. The vendors that we have currently working in specific regions, we want to open up different regions for them and expand the market that they have not had the chance to play in previously. While acquisition is part of the strategy, as much as I would love to give you information on that, I’m not privy to it myself. Hopefully we’ll find something out on LinkedIn when our CEO Dave Stevenson decides to make a post about it.

Scott Mann

Yeah, that’s fair. I wasn’t trying to get you in trouble for exposing anything that’s top secret information, so I appreciate that. I share the same sentiment as one of the vendors that you guys obviously have on your line card. You guys have definitely helped us grow and expand in new regions as we’ve continued to grow out in EMEA. It’s interesting to hear that the global reach that you guys have, that’s something that we’re very much focused on as well. So, we appreciate everything that you guys have done for us.

This might be an obvious question, or you might come up with something a little unique from your perspective and your stance being very software driven. What are the top three most common dilemmas that you hear from customers or partners, however you want to define those?

Ikram Khaled

As you probably know, we do have a wide breadth of customers who serve different verticals of end users that we regularly engage with. One of the most common ones that I come across is we’ve bought a platform, we don’t know what to do with it. 9 out of 10 times someone will end up raising a PO for a tool that looks amazing on the outside. There’s a lot of, let’s say, noise around the product and its benefits of having it in your stack. But as I said, 90 % of the time, after deploying it interoperability is a key requirement nowadays, when cost of ownership has become real. Working from a single pane of glass is quite important for end users and consumers nowadays. And they do end up buying tools that in the long run don’t benefit the business at all. If anything, it’s going to increase their IT debt.

The other common use case we hear about is that our AI policy is ungoverned. I think this is something that’s the top of the town at the moment. Shadow AI, it’s becoming a pandemic if you think about it. 90 % of the IT teams don’t really know about what AI tools or LLMs are being used within their environment. And organizations that do identify this issue at an early age and start working on it based on, that being part of their ecosystem as opposed to just an add-on are the companies that are going to win in the next three to five years because AI, as much as we want to jump around it, we all know that eventually it will become a part of everyone’s daily lives one way or the other. Whether we’re talking about agentic AI, which is definitely going to be something that’s going to come in in full force in the next coming years.

The last one that I’ve started coming across quite recently actually is about the hardware investment. As we know, there’s been some shortages across the world due to conflicts that are unavoidable. End users and organizations are finding ways to extend their refresh cycle of the hardware they’ve got. Which means essentially software will have to do the heavy lifting. It has become crucial for the consumers and the resellers, that they need to find ways that software can optimize their existing hardware lifecycle as opposed to wait for the refresh. The cost of ownership has become key. Everyone’s looking for ways to save money and QBS is trying to enable the resellers to choose the right products that fit into the ecosystem, as opposed to just shoving a product down the engineer’s throat.

Scott Mann

Those are three great points. I hear internally and externally that AI is the next thing, it’s been talked about for years. I’ve done a lot of PR interviews and everything and if you don’t have something to talk about on AI, they’re not interested. It’s the buzzword, but you see these cyclical trends with everything, same thing happened with cloud. It comes from this, there’s buzz and then there’s mass adoption and then it comes down to the governance of it all. Then everything changes after that, as everything becomes a little bit more mature. We’re at that stage now. Especially now that it’s so consumer driven. Everybody as an individual uses AI in some way and if you’re not using AI, you’re lagging behind. Somebody else is able to do it more efficiently than you because they’re using it. Then you have all this information that potentially can be shared outside of your company. It can be very sensitive information that once you post it into a public ChatGPT or something like that it’s out there for the world, so governance is huge thing.

Ikram Khaled

Right. Governance is key, Scott. And a lot of users don’t realize the data that they are putting in these LLMs, these LLMs are usually using that data to train their agents. And a lot of people don’t understand the sensitivity of the data that they’re actually working with. It may just sound like a name or maybe a numerical number that comes up, but these may be sensitive, without their knowledge. It is critical that organizations start building on their AI governance and policy now because it’s better late than never.

Scott Mann

Absolutely. And then the irony is that your third point was conflicts that are happening around the world, that’s back to do with AI. This second conflict that we’re talking about, internal governance, it’s driving why all the prices on hardware, and everything are going up and what everybody’s currently facing in the market. I remember talking about this in the summer of last year. Hardware prices and everything were coming; this AI boom is creating a shortage. This might last six months and then it’s, now this might last three years. You’re right though, it comes down to the software play. Money is set aside for the CapEx, the OpEx. People are looking at, maybe I need to make a change with how I’m leveraging this to preserve. Obviously still use the budget that they wanted to use and get the same outcome that they want to get, but they have to do it in a very different way and leverage software, different tools that they can to optimize their data and everything. It sounds like it’s a great way to get a short-term outcome that’s going to help benefit them in the long term.

Ikram Khaled

With the hardware piece as well, Scott, I think there’s this misconception now that there’s a shortage. Yes, there was a shortage with the stock orders and the back orders and all that stuff. What it has done now is basic economics. They have hiked up the price, which in turn has made the end users and the consumers rethink what the cost of ownership is going to look like for the next fiscal and how can they optimize the tools and software they have in their stack currently as opposed to going for a refresh.

Scott Mann

Yeah. I think people that are in a good position, they’re able to extend that life cycle. We used to see three-year hardware refreshes. Now these hardware refreshes are just going to extend further and further. The average is probably three to five. You see people do seven, 10, depending on the workloads and the how mission critical the workloads running on the hardware are. We’re going to see some big changes that are happening over the next few years. I don’t have a crystal ball, but typically when these prices go up, they don’t come back down to where they were before ever. Even if they do come down, they’re always going to stay a little higher than they were. It’ll be really interesting to look back on this 12 months from now and see what that looks like. That’s the point where we have the crystal ball, because we’ve experienced it all and can see what that looks like this time next year. We’ll have to mark that on our calendars to rewatch this.

We’re hearing a lot of concerns, obviously. We’re talking about the hardware stuff and we’re seeing a lot of concerns around hardware longevity and sustainability lately. There’s a rising cost on the hardware servers. Everybody knows this. This isn’t anything new. It’s impacting budgets. Are you finding that it’s because of the hardware pricing increases, it’s impacting software budgets, where they have less to use or is the inverse happening where because they’re now extending the lifecycle of that hardware, they have more software budget to leverage, or is it a mix of both?

Ikram Khaled

It will be a mixed bag, Scott. I think the right question that we should be asking given what the current world situation is, is where does the environment actually fit? We’ll be talking about cloud, edge, on-prem. It actually comes down to the point of where the end user or the consumer sees the longevity of deploying the tool and the ROI that’s coming from the investment that they’ve made.

Cloud is, of course, exceptional for elasticity. If you’re looking for a global reach, cloud is the way to go. But there are organizations that would prefer to be on edge or on prem because they don’t want the latency. It’s critical for them to ensure that the services don’t drop. It’s quite heavy to run these loads, so they want to make sure that they’re not on cloud, but on-prem. This comes down to efficiency at the end of the day, which platform is literally offering what type of return on efficiency for the organizations. Thankfully, QBS, we are working towards creating a vertical play where we are able to support our resellers when it comes to both cloud, edge, or on-prem.

Scott Mann

We’ve been talking about hybrid architecture forever too. It’s just never been more relevant than it is right now.

Now we talked about the hardware piece, the AI piece is obviously the biggest talk right now in the market. What are you seeing? What’s the impact that you’re seeing with that? Is there a ton of new vendors popping up? Is there a big ecosystem of AI software applications, governance? Different providers that’s growing and that are constantly knocking on your doors to say, hey, we want QBS to support us.

Ikram Khaled

I think the important question is to define AI. Because at this point, everyone has an AI agent, assistant, an LLM of some sort attached to it. So yes, there is a rise of AI being involved or included in everyone’s feature or the future releases that are coming as a part of their patch, everyone’s talking about it. Now, the most important thing is to understand what the definition of AI is, what do you actually mean. What the AI is actually doing, or is it just another fancy way of branding your product. Yes, we have seen a surge of such brands, but also we have seen a lot of agentic AI tools coming out of the market. Of course, we all know about the big boys like OpenAI and Anthropic, but there are smaller players and niche players that are coming out, there’s been a rise and we will see that for the next three to five years for sure. There will be a rise and as you know about IT or technology, it’s a never-ending game. Every week there’s something coming out.

The other day I was listening to Jensen Hwang and he was talking about long-term plans. And five, six years ago, companies or organizations would have an IT budget or planning done for three to five years. And that was because the rate of which the technology was coming out, it was manageable. We have a year to go through the fiscal and understand the value of this and then probably implement changes to our strategy. But now there’s a new technology coming out every single week. There’s a new company registering in San Francisco every single week. You may have a main objective or a primary objective where you see your company or your organization to go, but the nuances will change on a regular basis. Especially if you’re an innovator and when it comes to the software adoption lifecycle, it’s crucial that innovators and early adopters test out these tools so that the early majority and the late majority can then buy into it.

I think the rate at which the adoption is going at the moment, it’s increased far, far, far more than it was a year or two years ago. We have seen a rise, we will see a rise, and we have taken precautions, whereas we have created a vendor council internally where we are screening these vendors. We are actively speaking to our top partners, resellers, MSPs, GSIs, to understand the use case and which framework does it actually fit into. Yes, there will be a lot of hits and misses, I can guarantee that. That’s the life of distribution. But we want to make sure that the partners we onboard strategically from the QBS side are the ones that add value into long-term for our resellers.

Scott Mann

The budget piece, that was really interesting. I have an accounting background, so any time it comes to finance, like I didn’t think of that, and that’s a very interesting perspective on it. Because you’re right, people used to build budgets for three to five years and now they probably have to look at that as a one to two year because they know they’re going to have to readjust it in on the fly. You’ve got all these vendors knocking on your doors and the challenge for you guys. You’re doing the right things, you’re communicating, you’re taking feedback from your partners and then telling them what they need, what they’re looking for. And then you’re putting that into the whole picture of, this needs to fit into our ecosystem. This product needs to be brought in and it needs to have the same values to fit along all the other products that we talked at the start about, the relationships and everything.

It’s not an easy feat being in the position that you guys are at, because you’re kind of at the forefront of bringing some of these vendors to market and bringing them in front of your partners before they even get to customers and before they grow to a size that they’re on, billboards and TV ads and everything like that. It’s a neat perspective that you have at the early stage on everything.

You kind of touched on the three to five years, but what do you think? Is there anything else that you think companies will need from vendors and partners in the next three to five years that they maybe don’t prioritize today?

Ikram Khaled

Every reseller partner or MSPOG that I meet, I keep reminding them how crucial it is to have an AI governance and policy within the end user organization. This is crucial because if you’re not building it into your ecosystem from the get go, in the long run, you will have an issue, especially with the EU AI Act kicking in. The British customers, the United Kingdom customers are also picking up on this, the government’s picking up on this as well. We will get more policies and governance pieces coming into play from the government as well. It is crucial that the conversation that our resellers are having with these customers or their customers in fact, is going to be around enablement on the AI governance policy. So that’s one important thing.

I’ve mentioned about cost of ownership. The more we progress into this year, the more we are seeing that end users or resellers are more open to understanding about the technologies out there and had their discovery hat on to understand what the technology is all about. That has shifted and we’re going to see a shift in that as we go along because there’s going to be so many technologies coming. There’s so many out there in the market. It’s not about just adding a product to a stack. It’s about the longevity and the lifecycle of that ecosystem you’re building. Organizations that maybe have just started planning for the IT budget, the infrastructure refresh, have probably just started thinking about the security and the governance policies within the organizations. This is the right time. The time is now, rather than waiting for some regulatory act to come out and then trying and fight a legal battle with the courts. I would rather say, invest in getting the governance in place. One of the famous quotes that I think you probably have heard around, get your house in order first. That’s the most important rule of thumb. I can’t be going out and telling people and evangelizing about AI and governance if I haven’t got my own house in order.

The last thing that I would obviously touch base on is the change that we will see as I mentioned in the beginning of this podcast is that consumers are becoming more aware. When I said they’re becoming more aware, it’s not just about the technology and how it fits into the ecosystem, but also how it talks to other business applications within their portfolio. Vendors that will not realize the power of integration, especially out of the box integration, are going to be missing out. There are tools that are enabling people to connect these applications, but they’re having to shift from one UI to the other. People are looking for simplicity. That is going to be a key in getting the efficiency rate out from their employees. Being able to offer that to consumers, that they will be able to operate from a single pane of glass, rather than having to switch applications and use the UI as much as possible. That will definitely start shifting towards the right side. We will see more and more clients asking for a tool that, MCP now is something that everyone’s talking about, of course, but when it comes to critical business applications, they will be asking if there are out of the box integrations, not just open API integrations, but out of the box integrations, so it’s click, click, deploy.

Scott Mann

That’s a good lesson for both partners and vendors. From the partner’s perspective, there’s usually like, I’m this one vendor that I sell and I sell this to all my customers. But the consumer landscape is changing so much that it’s not a one size fits all for everybody. Partners have been burned by that approach where that vendor decides to make a change. So they’re kind of operating as a “hey, we need to figure out these are our segments that we focus on and this is a good solution here and we have some alternatives”. And from a vendor’s perspective to learn from that, the integration side of it is so important to be able to integrate with, not to think of yourself as the ecosystem, to think of the ecosystem as all of the other players around it. And you need to be able to serve from the bottom of the stack to the top of the stack and make sure that there’s cohesion across all of it.

That’s an interesting take on it. I think every vendor needs to be considering that as they’re growing their product. It’s not about just acquiring all of these and building all of these in-house. There’s somebody else that’s doing it very good. How do you work with that? Because your customers are going to be using that among some of the other solutions out there.

Ikram Khaled

Just to kind of highlight one point for vendors out there, that it’s not a small market. EMEA is huge. The total addressable market, it’s phenomenal. No vendor is going to be left behind if the technology is solid and if it fits certain customer portfolios and stacks. There is enough for everyone to go fish around on. The concept that, the market’s small and I have to compete with everybody, that is simply not the case anymore because there are more and more organizations that are adapting into their IT stack and they’re investing more money in their IT stack. The use cases that we’re seeing, it’s phenomenal. I’ve seen use cases from ministry all the way to drilling. I’ve seen in healthcare, I’ve seen in fintech. The world’s your oyster.

If you really want to go out there and fit into someone’s stack and provide that longevity, people with positive experiences, always love to boast about what they have, what’s happening within their stack and what’s made their lives easier. There are multiple different avenues in which a vendor can obviously get into the market and grow their brand using awareness and branding. But there is enough for everybody to be happy with.

Scott Mann

I absolutely agree. I think the challenge with the EMEA market itself has always been that there’s so many barriers because while it’s Europe itself, it’s one commission, but there’s every different cultures, there’s different languages, there’s different challenges in each country that you serve. From a vendor’s perspective, having a distributor that can bring down those walls and has the reach across all those regions, that’s what makes it feel like it’s one region that you’re targeting and it’s so much more of a lift from a vendor’s perspective to have to go to each country and onboard and enable, start with the distributor, find the partners, find the customers. It’s a lot more work to do that as opposed to being able to centralize that with someone like QBS.

Ikram Khaled

Absolutely. Simplicity is key. Our onboarding rate and launch rate is phenomenal compared to the market. And what we intend to do is give the best of both worlds to our resellers and partners. There is enough for us, for everybody to go out and grab onto us just finding the right partners and the right clients.

Scott Mann

I love that. And obviously you sound very passionate about everything that’s happening. You’ve been with QBS for a good amount of time. What excites you about the future? We’d be remiss not to talk about the future. We don’t have the crystal ball, but let’s put that crystal ball in here. What excites you about what’s coming up?

Ikram Khaled

There’s a lot happening at QBS. We have recently launched our security business unit where we have allocated certain expertise from the industry. It’s been built up very aggressively from our side. We have obviously started engaging our primary vendors or the strategic partners vendors into other regions as well, but there hasn’t been that much exposure for these vendors previously. And obviously the acquisition piece is quite important. There’s a team that is actively looking after the acquisition piece and trying to understand which markets are viable for us to get into at this point.

One of the most important things that I am really excited about is the AI piece. We have started speaking to a lot of these AI vendors as you want to call them. It is an interesting conversation because again, the licensing model is very different to the SaaS license that we have at the moment, understanding the consumption base and the credits and how it’s distributed. It’s an interesting world to be in, I’m not going to lie. We are looking to make the most out of what we have plus understand how we can go out and get these beasts that are going to be the next big thing in the market.

Scott Mann

Ikram, it’s been fantastic, I appreciate your time. I’m looking at the clock here and I think I’ve talked too much that it extends all of these podcasts a little longer than we expected, but such good conversation.

I appreciate you joining us today and to everybody tuning in. Thank you for tuning into PodMagic. Where simple, reliable, IT meets real-world impact. If you enjoyed the conversation, be sure to subscribe and share. Until next time.