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Optimism about pandemic, COVID

Despite Pandemic, Change, State of the Channel Has ‘a Lot of Optimism’

  • Written by Kelly Teal
  • August 19, 2021
CompTIA’s Carolyn April talks about the association’s new report, which surveyed partners from around the world.

The state of the channel in 2021 resembles little that has come before.

CompTIA’s Carolyn April

“It’s very difficult to characterize this year’s study because of the pandemic,” Carolyn April, senior director for industry analysis at CompTIA, told Channel Futures. “It’s almost like this study is an outlier, even though we do this annually.”

Earlier this year, CompTIA surveyed 880 IT channel professionals around the world for its “International State of the Channel 2021.” The report marks the ninth the IT association has published; it did not issue one last year because of COVID-19. The last one came out in 2019.

“While a lot of the trends are the same, it’s very difficult to make an apples-to-apples comparison,” April said.

Regarding the general health of the channel, though, “there’s a lot of optimism,” she added.

That comes as welcome news, and not just because of the pandemic. Over the past several years, various industry pundits have predicted the channel’s demise. That’s not happening, April said.

“It’s more about a changing channel.”

The cloud, of course, has served as that tipping point. Yet rather than killing the indirect channel, cloud ended up pushing partners to evolve. Big tech morphed into the main seller of platforms, applications and connectivity. That meant the channel has had to redefine itself. And it has.

“There’s a real tilt toward more business consulting, and consulting in general, among channel firms who realize that today’s customers have really easy avenues to do their own procurement,” April said.

Therefore, instead of competing with online marketplaces, for instance, many partners now help clients choose which apps to buy — and then implement them.

“Just because you can get it yourself real easy doesn’t mean it’s ready for primetime,” April said, citing cybersecurity and compliance as two key examples.

The Channel Is Not ‘Irrelevant’

Also as a result of the cloud era, more partners are serving verticals they previously had not, April said.

“I think the biggest impact of cloud has been the change in business models and the change in the way consumers interact with technology,” April said. “Channel companies have had to pivot around that. …The cloud did not kill the channel.”

Instead, the cloud forced channel companies to re-assess how they operate, she said.

“To all those doom-and-gloom pundits, they had a point but I think the point should have been more about the channel needing to change … vs becoming irrelevant and not needed.”

The state of the channel, then, looks promising. To be sure, the United States remains the most mature geography, CompTIA found. This makes sense, since the indirect channel model originated in North America.

Outside of this region, some partners are expressing frustration. They want more local access to their vendors. In places such as the UK and Australia, partners “don’t feel like they get the same amount of attention” as their U.S. counterparts, April said.

That may be an ongoing issue. For decades, vendors have been accustomed to making the rules.

“Vendors used to sit at the top and dictate terms,” April said.

But that, too, is shifting. Partners hold more power than perhaps they ever have — again, because of the cloud.

“There are so many more choices,” April said.

As a result, more channel firms are telling CompTIA they will walk away from a vendor if they don’t like the partner experience, she said.

That has vendors in a bit of a tizzy. The ones that have been around for some time, the ones that still offer volume discounts and backend rebates — neither of which work well in a cloud setting — are rethinking their approaches.

“The vendors are all trying to revamp their dusty partner programs right now,” April said.

Meanwhile, partners outside of the United States also have been a bit slow to convert to more of a managed services model, she said. Yet a significant amount — 50% — of UK respondents told CompTIA that consulting services make up a primary part of their portfolios.

“We at CompTIA think is a good thing,” April said. “This is where you can make some serious coin and it protects you from this shift away from selling something you can show to a customer necessarily. … You need to provide your value somewhere else.”

Channel partners can take…

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