IDC: Partner-Generated Revenue Remains Strong

IDC‘s Channel Panel found that partner-delivered services revenues remained strong in the second quarter of 2009 (2Q09), with the highest levels (47 percent of total partner revenue) coming from those selling networking products. The Channel Panel results also show that revenue received from reselling third-party services is dramatically lower, with storage services leading the way and contributing just more than 15 percent of partner revenue.

“Services are the cornerstone of most U.S. partner communities’ business,” said Janet Waxman, vice president, Infrastructure Channels and Alliances at IDC. “For years, the amount of revenue partners derive from services has steadily increased and we expect this trend to continue.”

Services continue to grow in importance to channel partners largely because of their universal demand: All products within the IT market require services and the types of services are independent of the product vendor. In addition, services can be sold to customers at a variety of times and represent a potential annuity revenue stream for the astute channel partner. Because the channel partner has the opportunity to deliver its own services, resell the suppliers’ services, or subcontract to or from the supplier, services have become a critical component in determining who will be the leaders in the channel and the winners among the suppliers.

“Suppliers that are not prepared to allow the partners to participate in delivery of their own services will face increased competition from, and possibly some loss of share to, suppliers with similar products that allow partners to determine their own mix of service offerings,” noted Matt Healey, research manager, Software and Hardware Support Services.

Additional findings from the 2Q09 Channel Panel include the following:

  • Partners that sell servers experienced a similar pattern as networking equipment in terms of services revenue.
  • Partners that sell storage, whether a primary product set or not, have the lowest incidence of delivering services.
  • In terms of revenue received from the delivery of services, there is not a significant difference between partners who sell a combination of hardware and partners that sell only one type of hardware.

IDC’s Channel Panel is a quarterly Web-based survey of channel partners that identifies trends in IT channel business.

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