Channel partners, are you ready for the challenges that await in 2016?
Channel Partners got input from Carbonite, EMC, Datto and Intermedia on what lies ahead for the channel in 2016. They cited a broad range of trends and opportunities for partners in the coming year.
“As cloud technology adoption grows, the threat of security risks from inside an organization will remain a top concern for IT solutions providers in 2016,” said Jessica Couto, Carbonite’s vice president of U.S. channel sales and marketing. “The new year will also bring about budget challenges for IT professionals to tackle, having to make due with smaller budgets while business needs increase. Reliable, affordable and compliance-friendly technology solutions will become necessary for channel partners more so than ever.”
With IT departments cutting costs and getting creative with resources, vendors and their channel partners will need to make a “strong business case for new technology, and make it as easy as possible for IT pros to invest in solutions that are easy to deploy, use and monitor,” Couto said. The most successful companies will excel at developing comprehensive bundles of products and services that address specific problems, she added.
Partners not engaged with their clients about cloud today will find it increasingly difficult to grow and succeed in the year ahead, said Fred Kohout, EMC’s vice president of global partner marketing.
“Partners that build competencies around converged and hyperconverged infrastructure, as well as flash, will win,” he said. “These segments are growing faster than any other part of the storage market.”
Also, the days of carrying multiple manufacturers’ product lines are quickly fading, Kohout said. Customers want “depth, not breadth,” he said.
“Every day you spend selling everything is one day less of selling something that drives a richer, repeat business with your customers,” he said.
Rob Rae, Datto’s vice president of business development, said 2016 will be the year when MSPs will start creating a gap between themselves and those that are “still squandering the recurring revenue opportunity.” As a result, the term “managed service” or even MSP, will become antiquated, he said.
“Instead, it will be back to the generic solution provider, the way it should be,” he said.
The new year will bring an abundance of acquisition opportunities, Rae added.
“Those that made it through the economic downturn are viable, profitable businesses with meat on the bone … very appealing to a larger organization looking to make some smaller acquisitions, eliminate …
… some competition, and grow fast and strong very quickly,” he said.
The new year also will usher in “more cloud weariness” prompted by more exposure and reporting of ransomware, cybercrime, hacking and outages, Rae said.
“Remember at parties when people were fascinated by you talking about cloud technologies?” he asked. “OK, neither do I, but it was something people were at least somewhat interested in. Those days will end. Instead it will be more about terrorist hackers, Russian submarines too close to Internet pipelines, North Korea planning satellite attacks and just general wariness about what’s out there and who’s seeing it.”
John Rice, Intermedia’s senior director of partner community, said MSPs and VARs next year will start to take a more holistic approach to working with customers, focusing on business value and results, not technology.
“The most successful MSPs and VARs will identify and specialize in key vertical markets, developing intellectual property (IP) as solutions in order to provide the most value to their partners,” he said. “For example, IP solutions may include security and compliance assessments as part of a bundled cloud solution. Cloud success requires differentiation and the only way to do that is by adding unique value in some form. The technology alone as a differentiator will no longer be enough.”
Also, recurring revenue will continue to increase as VARs and MSPs focus more on integrating cloud services into their overall go-to-market strategy, Rice said.
“As they move away from simply selling cloud services as point solutions, service providers will look to expand their relationships with larger partners,” he said. “Additionally, mergers and acquisitions will increase as MSPs and solution providers look to gain economies of scale by consolidating their cloud and managed-services business units, moving away from dependence on project revenues.”
And finally, security and compliance requirements will continue to become more difficult and expensive to meet, encouraging the move to the cloud, Rice said.
“In order to meet these stringent policies, VARs and MSPs will continue to add security and compliance services,” he said. “We will see this not just for regulated industries, but across the entire client base, and soon the cloud will emerge as the most economical way to meet security and compliance requirements. Understanding security policies and how cloud services deliver against those requirements is critical if you want to be a successful cloud services reseller.”