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Forrester Research: The Channel Is Aging Out

Forrester's Jay McBain at Channel Partners Evolution

CHANNEL PARTNERS EVOLUTION — The numbers about the aging IT/Telecommunications channel are shocking.

The Channel Partners Evolution pre-conference began with a keynote from Jay McBain, Forrester Research‘s principal analyst of global channels, who presented evidence on the shifting demographics of the channel.

Forrester’s study found that 40 percent of channel owners plan on retiring by 2024, and millennials will comprise 75 percent of the channel by that time. That’s a lot of change in just seven years.

McBain said that although millennials will be much more populous in the channel, the industry is struggling to attract them. Why isn’t this digitally savvy generation seeing the channel as a prime opportunity? McBain says technology is now a primary aspect of most industries.

“You want to go work in technology? You can go work for a hotel (AirBNB). You can go work for a car company. You can go work for a peanut butter company. It doesn’t matter who you work for. Technology is part of your job,” he said.

McBain argued that the channel will look very different seven years for now, describing what he calls the growing “shadow channel.” This shadow channel consists of five types of businesses.

  1. SaaS ecosystem consultants
  2. Industry-based professional services firms
  3. ndependent software vendors (ISVs)
  4. Born-in-the-cloud Firms
  5. Members of the startup community

Other startling statistics from McBain’s speech are that business leaders on average make 65 percent of a company’s technology decisions, and 68 percent of business buyers would rather research technology options on their own.

Partners need tackle three objectives, McBain said. First, they need to analyze their internal capabilities; they must build the capabilities they lack using either organic growth, partnering or M&A; and they must expand their sales and marketing.

The pre-conferences for Channel Partners Evolution and colocated SDxE (the Software-Defined Enterprise Expo) offered multiple education options for attendees. SDxE offered a session titled “Protecting Customers is Job #1,” where security experts discussed the future of data protection.

Bill Kleyman, chief technology officer of MTM Technologies and moderator of the panel, argued that the ongoing wave of digital transformation will change businesses’ mindsets.

“That’s not going to be just a word any more,” Kleyman said. “That’s going to be a part of our everyday lives as people start to transform their business and really start to be much more in tune with what technology requires from the business.”

He presented five growing areas of targeting and vulnerability: SSL traffic, IoT, mobile apps, cloud services and drone threats.

Two other problems are that hacking has become industrialized and economized, and attackers are more hungry to steal data than ever.

“We see that data is valuable. It’s being sold and resold, and we have to do something to protect it,” Kleyman said.

Kleyman’s panel discussed the hot-button issue of the Equifax hack and the many problems with how Equifax responded. One of the major problems is that two to three months went on between Equifax discovering its vulnerability and actually patching it.

“If you look at the way they responded, I think they did a really bad job. There [are] a lot of things they could have done differently,” said David O’Neil, director of incident response and cyber resilience for Kudelski Security.

The panelists noted that Equifax had gotten rid of its security contractors and was looking for a less expensive option. One of the takeaways from the talk was that businesses leaders are more interested in security than ever, but many of them – even Fortune 500 businesses – don’t know where to start.

Other education sessions from Monday included a digital business workshop full of table discussions, and an IoT Bootcamp, which took partners through the main elements of a successful IoT practice: a hardware/software platform, connectivity, services and the sales cycle.


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