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Cloud Services Debut on Annual Channel Partners Compensation Survey

If anything stands out about the most recent survey of channel partners’ compensation, it’s that cloud services are beginning to bring in revenue for a greater number of channel partners in the communications sector. In 2011, for the first time, cloud registered on the annual Channel Partners Compensation Survey as a source of revenue. Sixty percent respondents reported the cloud as a source of sales.

These results really come as no surprise as a persistent weak economy pushes enterprises, government agencies and vertical industries to shrink capital expenditures and focus more on operational expenses. As a result, enterprises and small businesses are gravitating away from capital intensive on-premises equipment and software, opting instead for subscription-based hosted alternatives.

For channel partners, all of that means financial opportunity, even amid a recession. If you want evidence, look no further than to partners themselves. A number of respondents to the 2011 Channel Partners Compensation survey said cloud services pay larger margins than traditional telecom products.

Nearly half (49 percent) said they make 16-20 percent on cloud services while another third (37 percent) said they earn 11-15 percent (see Figure 1). Commissions on data services sales were the most similar; 44 percent reported commissions of 16-20 percent and 38 percent said they earned 11-15 percent.

Other trends include a diversification of compensation sources even as commissions on services delivered by vendors remain the dominant form of income (see Figure 2). Fees from consulting and professional services were reported by more than half of the respondents while more than a third said they received compensation on hardware/software and another third on managed services they offer directly to customers. However, these efforts at diversification dont account for a significant portion of the revenue mix; most respondents said 90 percent or more of their revenue still comes from commissions on vendor services.


Looking for More?

Download the full 2011 Channel Partners Compensation Survey from the Resource Center at www.channelpartnersonline.com/reports.


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