The IT channel is at an inflection point. New business models and purchasing habits are appearing. Non-IT executives are increasingly able to buy IT services from the cloud. And the balance of power among vendors, solution providers, distributors and end users is shifting.
So says a new IT-industry outlook report, issued yesterday by CompTIA, a technology industry membership association.
CompTIA points to estimates that as much as two-thirds of all IT products are influenced by the channel. That’s more than $200 billion worth of equipment. Working with U.S. government figures, CompTIA figures the country now has slightly more than 133,000 channel companies with employees. An overwhelming number of them — nearly 121,000 — are small businesses, with just 1 to 9 employees.
What’s likely in the channel future? Here are CompTIA’s top predictions:
> Cloud: Cloud has the channel worried. That’s mainly because the cloud enables non-IT professionals to purchase IT services directly from service-based providers, cutting out the channel entirely. Indeed, only about a third (37%) of channel pros surveyed by CompTIA last year said the cloud has had an extremely positive effect on the channel. That’s down sharply from the nearly 65 percent who felt that way in a survey conducted the year before. That said, most channel companies have embraced the cloud. And all but 9 percent told CompTIA they expect their managed services business to grow this year.
> Staffing: About 40 percent of channel professionals are due to retire in the next 10 years, CompTIA says. As a result, the industry needs new blood. But when young tech workers think about exciting job opportunities, the channel isn’t often their first choice. The industry will need to figure out how to change this — or face serious consolidation soon.
> Partner Programs: It’s time for vendors to revamp their partner programs, CompTIA believes. While these programs were once essential to the channel, they’re now less important, given the industry’s new emphasis on IT services over hardware. That’s even more true for channel companies that now focus on consulting and services. “Traditional incentives, such as sales splits, upfront discounts and back-end rebates, are not what endears [the channel] to any one vendor over another,” the CompTIA report asserts.
> New Competitors: Solutions providers find themselves competing not just with each other, but also, increasingly, with digital agencies, marketing firms, accountants and other non-IT organizations. In response, many channel players are switching from being simple resellers to offering both services and vertical-industry/niche solutions. “The SaaS ecosystem alone is reinventing what it means to be ‘in the channel,’” the CompTIA report states.
Taken together, all that may sound challenging. But don’t let it get you down. CompTIA also predicts that the global IT industry will grow by about 4 percent this year. Assuming it does, that would mean a worldwide IT market worth some $3.5 trillion — plenty to go around.
Also, channel executives are an optimistic group. In a recent CompTIA survey, nearly 65 percent said they expect the channel’s prospects over the next 2 years to be positive. Here’s hoping they’re right.
Download and view the full CTIA report, IT Industry Outlook 2017.
You may also enjoy: