A recent industry study shows a major trend: channel partners adopting managed services in order to grow their business.
An Extreme Networks survey of more than 100 solution providers found that three in five (60 percent) respondents plan to offer managed services and a managed cloud recurring revenue model by 2018. More than that – almost half (48 percent) of the respondents said they expect those services to account for double-digit growth during the next year.
The survey identified “managed services/cloud” as the biggest sales trend in the channel. At 85 percent, it was tops, trailed closely by integrated solutions (83 percent) and vertical-marketing specialization (64 percent). Each respondent voted for the top three trends.
“The results validated what we’ve been seeing in the market, and we have conducted subsequent, deeper surveys with our partners and have learned that the speed of acceleration to deliver managed services and cloud is even greater than anticipated,” Bob Gault, Extreme’s executive vice president, Worldwide Sales, Services and Channels, told Channel Partners.
Gault attributes the managed-services move to the increase in use of new technology. The survey highlighted bring-your-own-device/mobility as the biggest technological trend, getting 72 percent of respondents’ votes. Security (68 percent) and cloud (58 percent) rounded out the top three.
“… BYOD and mobility continue to be dominant trends among solution providers, as unrelenting device proliferation, the advancement of the Internet of Things (IoT) and increased mobile-application consumption continue to place heightened pressure on IT departments and networks,” Gault wrote in a blog. “Additionally, as technology and networking rapidly change, user demand for advanced services is steadily increasing.”
Out of those respondents, two in five (40 percent) said they were already offering managed service or cloud recurring revenue, and 30 percent said they had plans to expand to those. Only 31 percent said they weren’t thinking of making the transition.
“Transitioning from product sales to a services model is not trivial,” Gault said. “While many partners are already delivering managed services or are evolving their product mix, others are looking for guidance and support to change.”
The survey discussed how solution providers are aligning their businesses for the future. Additional questions in the survey covered trends in networking. Respondents identified Wi-Fi as the key growth area for network equipment and network security as the fastest growing request from networking customers.