The channel is relatively bullish about its outlook for reasons ranging from cloud computing opening doors to robust demand for managed services, CompTIA finds.
Nearly half of channel firms expect revenue growth to come mainly from net new customers over the next two years, while 30% anticipate more sales from existing customers. The other 24% expect their revenue mix to remain balanced.
Solution providers are shifting from reliance on product sales to project-based solutions and services and recurring revenue streams from managed services. In the next 12 months, product sales are expected to grow at a lower rate (47%) than project solutions (56%) and recurring services (59%).
Nearly eight in 10 U.S. channel firms say they have experienced some transformative activity to date, but 55% say hardware is still important, while 37% say it’s somewhat important. Almost half (48%) identify consulting as top source of revenue, followed by IT projects (46%) and product margins at (43%).
The number of vendor partner programs that channel firms say they participate in remains consistent. On average, each solution provider participates in eight programs. Larger firms tend to participate in more programs, while smaller firms tend to join fewer, with six in 10 involved in between one and four programs.
More than half (56%) forecast a net gain in the number of programs they will join in the next year, while 14% expect a net drop and the remaining 28% maintain the status quo.
Partners are either very satisfied (41%) or mostly satisfied (52%) with vendors, but nearly four in 10 say they are open to new vendor partners and 11% say their vendor alliances are shifting.
Nearly half (46%) say they perceived an increase in channel conflict to at least some degree, while 36% say conflict in the field remained about the same.
The top four reasons cited are cost of membership, vendor products not fitting customer needs or business model, difficulty in doing business with vendors and constantly changing requirements.
Just over a third expect vendor financial incentives to increase either significantly or moderately over the next two years; four in 10 expect no change. The other 23% are predicting a net decrease. About a third say they would reduce business with a vendor if incentives dropped, and 15% say they would drop the vendor.
Respondents report that 30% of their customer base consists of “micro-sized” companies (fewer than 10 employees) and that another 30% are small companies (10 to 99 employees). The remainder are either midsize (100 to 499 employees) or large (500+ employees) organizations.
Close to half report developing revenue opportunities organically through their own company efforts, with the remainder coming nearly evenly from vendors, distributors and other solution provider partners.
Top technology areas where channel firms expect growth next year include security, cloud infrastructure, storage, custom application development, data analytics/business intelligence and cloud SaaS.
More than half (55%) say channel sales and marketing efforts are moderately effective, while 32% say they are highly effective.
More than 60% expressed optimism that the channel will fare generally well in the years ahead. The most pessimistic were firms with10 to 99 employees (19%) and those in business less than five years (21%).
The top four reasons for optimism are cloud computing opening new doors, customer demand for managed services, customers wanting a local provider that is a trusted advisor and increased customer reliance on IT.
The top five reasons are general business challenges, the skills gap, customers becoming more self-sufficient, new types of competitors, and IT is simpler to deploy and manage by internal IT.
Important ways for maintaining channel health range from business and IT training to the availability of skilled workers and vendors being truly committed to partnering.