Cloud, Managed Services Brighten Channel Outlook

Optimism

1 - Cloud, Managed Services Brighten Channel OutlookCloud, Managed Services Brighten Channel Outlook

The channel is relatively bullish about its outlook for reasons ranging from cloud computing opening doors to robust demand for managed services, CompTIA finds.

2 - Channel Sales From New, Existing CustomersChannel Sales From New, Existing Customers

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.

3 - What the Channel Is SellingWhat the Channel Is Selling

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%).

4 - Rate of Business TransformationRate of Business Transformation

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%).

5 - Participation in Channel ProgramsParticipation in Channel Programs

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.

6 - Number of Channel Programs Plan to Participate InNumber of Channel Programs Plan to Participate In

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.

7 - State of Vendor RelationshipsState of Vendor Relationships

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.

8 - Amount of Conflict in the ChannelAmount of Conflict in the Channel

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.

9 - Top Reasons for Dropping VendorsTop Reasons for Dropping Vendors

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.

10 - Vendor Financial IncentivesVendor Financial Incentives

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.

11 - Mix of CustomersMix of Customers

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.

12 - Drivers of Sales OpportunitiesDrivers of Sales Opportunities

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.

13 - Top Technologies Driving New SalesTop Technologies Driving New Sales

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.

14 - Sales and Marketing EffectivenessSales and Marketing Effectiveness

More than half (55%) say channel sales and marketing efforts are moderately effective, while 32% say they are highly effective.

15 - Channel OutlookChannel Outlook

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%).

16 - Top Reasons to Be OptimisticTop Reasons to Be Optimistic

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.

17 - Top Reasons to Be PessimisticTop Reasons to Be Pessimistic

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.

18 - Keys to Keeping the Channel HealthyKeys to Keeping the Channel Healthy

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.

Michael Vizard
Michael Vizard is a seasoned IT journalist, with nearly 30 years of experience writing and editing about enterprise IT issues. He is a contributor to publications including Programmableweb, IT Business Edge, CIOinsight, Channel Insider and UBM Tech. He formerly was editorial director for Ziff-Davis Enterprise, where he launched the company’s custom content division, and has also served as editor in chief for CRN and InfoWorld. He also has held editorial positions at PC Week, Computerworld and Digital Review.

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