Channel Partners: Services Revenue Remains Healthy

By Jessica Davis  |  Print this article Print


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A new survey from IDC's Channel Panel found that services revenue has stayed strong, with the highest levels in Q2 going to those reseller channel partners who sold networking products.

Partner-delivered services seem to be recession-proof, according to a new survey of reseller channel partners.

The survey of IDC’s Channel Panel for the second quarter found that the highest levels of service revenue, making up 47 percent of total partner revenue, came from those who sold networking products.

But the revenue received from reselling third-party services was dramatically lower, with storage services coming in the highest and contributing just over 15 percent of partner revenue, according to IDC.

"Services are the cornerstone of most U.S. partner communities' business," says Janet Waxman, vice president for Infrastructure Channels and Alliances at IDC, in a prepared statement. "For years, the amount of revenue partners derive from services has steadily increased and we expect this trend to continue."

That’s because services are in demand regardless of the product’s vendor, and they can be sold to customers at a variety of times, representing a potential annuity revenue stream. IDC believes that the variety of services offerings and delivery methods available to partners and how vendors position their own offerings will ultimately influence which vendors succeed.

"Suppliers that are not prepared to allow the partners to participate in delivery of their own services will face increased competition from, and possibly some loss of share to, suppliers with similar products that allow partners to determine their own mix of service offerings," says Matt Healey, research manager of Software and Hardware Support Services at IDC, in a prepared statement.

The survey also found that partners that sell services associated with servers also experienced a similar services revenue contribution as did the networking partners. But partners that sold storage saw the smallest contribution to revenues from service sales.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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