CompTIA’s 8th Annual State of the Channel Report Takes Partner Pulse

Partners report apprehension about the state of the economy and the potential impact on their businesses, while at the same time are showing excitement for business growth by adopting emerging technologies and partnering with other, nontraditional, firms.

That’s a key takeaway from CompTIA’s recently released 8^th State of the Channel report.

But that’s not all. This year’s research also examines channel partners’ own view on the long-term viability of the indirect channel, how some partners are reshaping their business, changes in portfolio offerings, and insight on managed services and managed service providers (MSPs), for example.

This year’s State of the Channel report doesn’t show dramatic year-over-year change, but partners participating in this year’s research are forging ahead and are building their businesses in ways that are in tune with changes shaping the IT industry. The report is based on 505 U.S. companies engaged in the business of technology.

After years of a healthy growing economy, partners see a few potential red flags that spell concern for the future of the channel. In fact, 37% of partners expressed concern about today’s economic conditions and changes to the general economy. At the same time, 37% of partners view potential government regulation of the tech industry as cause for concern.

These top two reasons for concern about the channel’s future differ from the concerns from last year where new types of competitors and a skills gap in emerging technologies were top of mind. While these two concerns still worry partners – skills gap (35%) and new competitors (34%) – they’ve just dropped a few notches in this year’s survey.

Other concerns that partners have about the channel’s future — aging of IT channel owners (34%), difficulty hiring (30%), commoditization (30%), customer taking business direct (28%), and cloud disruption (27%).

While partners have a number of concerns about the future for their businesses, their take on the negative spin about the channel’s future is that 59% say there’s some truth to it, depending on the individual channel firm and business model, 26% say it’s overblown and 16% of survey takers says it’s an accurate assessment for much of the channel.

CompTIA’s Carolyn April

“There is some economic apprehension that the channel is feeling right now but there are a lot of positives is this year’s report, as well,” Carolyn April, senior director of industry analysis at CompTIA, told Channel Futures.

Seventy-two percent of survey respondents consider emerging tech a significant business opportunity, on par with last year’s sentiment about emerging tech (75%). Other reasons for adding emerging tech to the business portfolio — customer demand (52%), competitive differentiator (43%), to avoid obsolescence (38%), dovetails with existing portfolio (36%) and vendors pushing us in that direction (35%).

“We’re also seeing that partners are moving more into production with emerging tech rather than experimenting,” said April.

In this year’s report, 56% of partner firms’ experience with emerging tech is in production, compared to 51% in 2018; 29% are partners are experimenting with emerging tech this year, the same percentage as in 2018. The report notes the largest channel firms reporting being in the production stage with emerging tech; in fact, two-thirds of the largest organizations are selling emerging technology to customers, compared to one-half of small channel firms.

“A caveat — if only 1% of your business is emerging tech and next year it’s 2% of your business, that’s enormous …