Optimism Surfaces in New IT Outlook Studies

By Sharon Linsenbach  |  Posted 2009-05-04 Email Print this article Print
 
 
 
 
 
 
 

The recession continues to grip the economy and the bankruptcy news about the automakers isn't helping, but new reports by Amazon Consulting and MXLogic shows glimmers of optimism among solution providers, IT vendors and end users.

Despite the gloom-and-doom atmosphere surrounding 2009’s economic outlook, both vendors and solution providers are surprisingly optimistic about their prospects this year. Two studies bear this out – one from managed security services provider MXLogic and the other from Amazon Consulting. Here are the top five channel trends expected by both vendors and solution providers.

1. Growth still expected
Despite the challenging economic outlook, most vendors expected their partners to grow at or above their own company growth rate, anywhere from 1 percent to 10 percent. Growth will be especially high for solution providers that identify as ISVs, SaaS or Managed services providers, according to Amazon Consulting.

And if vendors are bullish, channel partners are even more so. According to an MXLogic study, over 85 percent of their solution provider respondents said segments of their business have been doing well despite the economy, and 44.2 percent said those successes were in their MSP practice. Conversely, 57.1 percent said hardware and software sales were slumping, says Steve McCutcheon, vice president of marketing at MXLogic.

2. All politics are local
The Amazon Consulting study showed that vendors will continue to focus on smaller regional resellers and systems integrators as their way to continually build their "volunteer army" and get closer to their SMB customers.   

Resellers as a constituency are still the biggest audience for vendors in their ecosystems, says Beth Vanni, Director of market intelligence, Amazon Consulting. As vendors become more solution-centric they encourage partners to sell services around their products. In fact, Vanni says, more than 60 percent of vendors says they’ll add or enhance programs for MSPs to attract more of these types of partners.

3. Marketing drives demand
Marketing has always been a challenge for both vendors and solution providers, and will remain tough through at least 2010, Vanni says. While vendors say they will reevaluate their marketing spending, distributors could pick up the slack, but many are also seeing decreased MDF funds from vendors.

McCutcheon says many solution providers are taking proactive steps to counter any negative impact the economy has had on their business. Marketing initiatives are taking center stage, with 61.8 percent of respondents saying they’re stepping up their proactive marketing strategies and leveraging sales and marketing tools from vendors to help them reach a wider audience.

4. Services delivery is the next frontier
Vanni says whether trying to use partners as sales agents, services infrastructure builders or professional services sub-contractors, for vendors, building an ecosystem of partners based on their services sophistication is an often under-resourced dimension of vendors’ channel programs.  

She references Channel Insider’s own Market Pulse study data showing that ISVs, software VARs, MSPs and SaaS providers would experience significantly higher growth than other types of solution providers or integrators.

"It’s very important to make sure that, as products increasingly become services, that vendors evolve to address this shift," says Vanni, especially since 62 percent of vendor respondents said they still experience channel conflict within their services delivery mechanisms.

McCutcheon says solution providers are actively pushing services in their business, and 48 percent of partners now lead with managed services.

5. Collaboration isn’t a destination, it’s a journey
Both vendors and their channel partners are experimenting with new means of collaboration as a means to drive profits and increase business. Vanni says 13 percent of vendors reported that their audience says increasing sales through peer partnerships is a priority, and another 13 percent say partnering with peers was going to be central to their growth in 2009.

In fact, 17 percent were already increasing peer-to-peer partnerships and 52 percent said they are likely to do it this year to drive growth.  In addition, a total of 86 percent said they were very likely or somewhat likely to pursue partnerships with other solution providers.

6. Spend wisely, but spend
Even as vendors struggle to develop metrics to ensure their channel spending is
getting a high return on investment, solution providers are claiming their sales will increase or stay the same year-over-year. McCutcheon says 87 percent of solution providers surveyed reported sales will increase or stay the same, while 52.7 percent said they hadn’t put business investments on hold because of the economy. 

 
 
 
 
Sharon Linsenbach Sharon Linsenbach is a staff writer for eWEEK and eWEEK Channel Insider. Prior to joining Ziff Davis, Sharon was Assistant Managing Editor for CRN, a weekly magazine for PC and technology resellers. Before joining CRN, Sharon was an Acquisitions Editor for The Coriolis Group and later, Editorial Director with Paraglyph Press, both in Scottsdale, AZ. She holds a BA in English from Drew University and lives in the Philadelphia suburbs with her significant other and two neurotic cats. When she's not reading or writing about technology, Sharon enjoys yoga, knitting, traveling and live music. Sharon can be reached at Sharon.Linsenbach@ziffdavisenterprise.com.
 
 
 
 
 
























 
 
 
 
 
 

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