Channel Optimism Reigns, But There’s No Time for Complacency

As the channel rolls into 2017, general optimism about the IT industry is at an all-time high, but there’s no time for dawdling in the channel ecosystem as players, i.e. vendors, distributors and partners face a number of issues — including competition, aging, rethinking partner programs, and a spike in cloud opportunities, according to CompTIA’s 2017 IT Industry Outlook released Wednesday.

CompTIA's Seth RobinsonIn CompTIA’s most recent IT Industry Business Confidence Index (BCI), the latest figure was 6.5 points higher than the previous quarter as businesses head into 2017. This represents an all-time high for the BCI, which has been on a steady incline over the past several quarters. CompTIA calculates the BCI quarterly and bases its figures on channel partner executive feedback about the IT industry and U.S. economy.

“Typically in the new quarter we do see a bit of elevated optimism and people feeling pretty good about the year, but that said, it is at a new high,” Seth Robinson, senior director, technology analyst, CompTIA, told us.

He suggested a couple reasons for the latest BCI score. One is the change in presidential administration and the belief that it might be more business-friendly going forward, and also acknowledgement that the IT sector is a strong driving force in the economy.

IDC projects that IT industry spending, worldwide, will surpass $3.5 trillion in 2017, up from $3.4 trillion in 2016. The U.S. market represents 28 percent, or a bit more than $1 trillion, of that figure.{ad}

Still, notes Robinson, the technology sector and the channel continue to be in flux.

“We’ve seen that for the past few years. This year, companies are still trying to figure out exactly how they can help their clients drive technology solutions with the new models that are available — such as software-defined and adding value around that,” he said.

Robinson refers to this phenomenon as a blending in the channel, also visible as the telecom and IT sectors begin to learn from each other.

The 2017 Industry Report – based on 530 responses from IT industry executives in the U.S., Canada and the U.K. – looked at three key area trends: technology, channel and workforce.

Honing in on the channel trends, the report highlights four notable takeaways:

  • New channel players, such as digital agencies, marketing firms and accountants selling and recommending IT solutions continue to pose a challenge to traditional channel firms.
  • A combination of new channel partner types and the move away from traditional hardware solutions to SaaS, IaaS, etc. and services, are pushing vendors to rethink partner programs and what type of compensation and enablement are relevant in today’s services market. In fact, Robinson believes it will drive the partner ecosystem – vendors, distributors and partners – to rethink their relationships.
  • We’re seeing the graying of the channel and a critical need to attract millennials and next-generation entrepreneurs. An estimated 40 percent of the channel is expected to retire or leave their businesses within the next decade. And, although young people are active users of technology and may be software development, they’re not as aware of the hardware, security or services opportunities tied to technology solutions.
  • Cloud management is a growing opportunity for partners as companies turn to cloud solutions from multiple sources and then lack the resources to manage it all. That’s where the channel, and in particular MSPs, are finding ways to provide value, solving a crisis for clients and managing vendor relationships. It’s one way channel firms can cement relevancy in the era of cloud, according to the report.

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