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Channel Partners Event Coverage


Forrester’s Jay McBain: ‘There’s No Single Trusted Adviser Anymore’

  • Written by Buffy Naylor
  • November 2, 2021
In the decade of the ecosystem, those advisers that become orchestrators could realize triple-digit growth.

CHANNEL PARTNERS CONFERENCE & EXPO – According to Forrester’s Jay McBain (pictured above addressing the Channel Partners audience), worldwide telco and tech spending will double in the next decade. But that growth, from $3.5 trillion to $7 trillion, will take place among “a ton of change.”

In “The Tech-Telco Tipping Point: Get Your Business Ready for the Decade of the Ecosystem,” his keynote at the Channel Partners Conference & Expo, McBain examined those changes. He also explained how they would both alter and emphasize the role of the channel.

Currently, 64% of the $3.5 trillion telco and tech spend comes through the indirect channel. But McBain believes that will change. “As we look toward the end of the decade, we’re starting to see some shift in the way money changes hands,” he said.

McBain predicts that 1/3 will flow from indirect, 1/3 from marketplaces and 1/3 from direct. But behind the scenes, the role of the indirect channel will become more important than ever.

“The channel for 40 years has been synonymous with the flow of money,” McBain said. “What isn’t talked about enough is that about 90% of that number is partner-assisted.”

For instance, Microsoft sales have always been more than 90% through the channel. “But now they talk about 96% partner-assisted,” McBain said, “They never talk about partner-sourced anymore.”

Similarly, Azure has grown by 50% per quarter for the last six quarters. Only about 30% of Azure growth is through the channel. But it’s 96% partner-assisted.

To illustrate the channel’s evolving and escalating role in the changing tech and telco buying journey, McBain created a Top 10 List of “uber-level” trends affecting the channel. While some trends are within the channel and some are not, McBain thinks “when you put these 10 things together, they’re going to be the most impactful thing in the next decade. And the companies that take advantage of these converging trends and accelerating trends will be the ones growing at triple digits.”

The Top 10 List

10. Tech Buying Is Changing; So Are Psychology, Behavior and Journey

“There’s a demographic shift happening for the first time in a long time,” McBain said. “The majority of buyers are going to be millennials within four years.” And technology buying is becoming more consumer-like, with buyers doing online research, reading reviews and watching video cookies.

9. End of the Cookie

Google and Apple recently announced they were eliminating the online cookies used to target and trace consumer behaviors. The companies that own 99% of mobility and 86% of desktop browsing share no longer tracking the buying journey will be huge for the industry. Indirect sellers will become vital for their influence.

8. 76% of CEOs Think Their Current Business Model Will Be Unrecognizable

Public and private companies alike are feeling pressure to think about subscription and consumption models and recurring revenue (which those in the telco market and the MSP market already know and already do.)

These companies cited the need to build teams to address all the facets of the ecosystem. They expect to move forward as part of a team.

7. The World Shifts to Subscription and Consumption Models

Cisco, Dell, Lenovo and IBM are following HPE in moving to a subscription-only model. Instead of one-time purchase fee, it’s now a monthly fee. Within a subscription economy, a subscription company is rated with the same type of metrics as an entity like Netflix. The focus is on the number of subscribers, churn rate, etc.

6. The Embedded/White-Labeled Future Replaces the SKU

Despite leading the field in the number of patents received for 28 straight years, IBM saw revenue drop for 10 straight years. They never monetized that innovation. In an inventive world, we’re not a product sales company anymore. Companies’ growth will come from driving adoption, deeper integrations and stickiness, and driving cross-sell/upsell/enrichment of other parts of their portfolios and other innovations.

5. Marketplaces Accelerate the Decline of Resell

McBain predicts that by the end of the decade, there will be 20 leading marketplaces that take 80% of the marketplace opportunities. The other 20% will go into a niche marketplace.

4. Marketplace Taxation Takes Center Stage

Taxation is now being closely examined. Microsoft lowered its taxation from 20% to 3%. Google followed…

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