Top 3 Profitable Revenue Streams for Channel Partners

Look at a channel ecosystem model, plus offering professional services, more managed services capabilities.

Dale Smith, Channel Director, EMEA/LATAM

October 25, 2023

4 Min Read
Revenue streams

The channel's market landscape is constantly shifting. Partners that keep their fingers on the pulse will likely be the ones to remain the most profitable as customer needs evolve in line with the rhythms of the wider business, economic volatility and the technology backdrop.

Despite the external macro-economic factors that have affected businesses over the past few years, partners overall seem to be optimistic about their profitability in 2023. A poll by Canalys (registration required) found that almost two-thirds of respondent partners expect growth of at least 1%, with almost a quarter of respondents forecasting growth beyond 10% cent this year.

What revenue streams will best help partners to remain profitable and continue a growth trajectory? Smart partners are evolving to expand their services to become more than a traditional reseller. Three key revenue streams can help ramp up profitability for partners looking to expand their offerings, in line with current customer needs.

Traditional Resellers Become Trusted Advisors

Partners want to be able to solve a customer's needs, no matter how complex the problem. After all, this is how customers build strong, long-term relationships with partners. Expanding and differentiating services and offerings will draw in and retain as many customers as possible. As more offerings become available to customers, partners are adopting the role of the trusted advisor, meaning customers are now identifying partners they can come to with their specific needs. They can trust that the partner has the level of expertise, coupled with the right services and offerings, to be able to deliver a solution with a seamless outcome.

In this sense, a channel ecosystem model works well for partners that want to deliver end-to-end service for their customers. Often, partners may not have all the solutions, offerings or the global reach to deliver an end-to-end customer experience. Working in tandem with channel peers with differentiated but complementary offerings enables a better customer experience and paves the way for more profitability.

Many partners are also incorporating more managed services capabilities due to a surge in customer demand. As businesses face the challenges that come with evolving the network to handle hybrid working, remote work, workforce shortages in the IT team and the overbearing pressure of the rising cost of business, managed services can often be the perfect solution to tackle all these problems.

In a pulse survey by Canalys, EMEA partners predict 15% of their revenue, on average, will come from managed services. Partners should identify common areas where their customers are struggling and focus on these specialities when considering which services to adopt as they begin their journey. Security is one area businesses would likely rather have a third-party specialist take care of, especially if they've developed a trusting relationship with partners through other solution and service delivery.

Professional Services Make Deployment Seamless

In the same vein, professional services are also expected to be an increasingly important profit driver for partners. In the same Canalys pulse survey, 16% of EMEA partners expect that professional services will contribute most to their gross profits in 2023.

Offering professional services to customers further establishes professional skills that gain a customer's trust, enabling partner expertise to take the pressure off stages of deployment such as the design, build and optimisation of a network. There are many avenues a partner can explore when expanding their services creation, including support through deployment, testing and ongoing support if needed.

As customers come to grips with a transformed network, having the partner "dotting the i's and crossing the t's" can make a difference in the customer experience. The customer has reassurance from start to finish, with the addition of ongoing support should they need it.

Given the increasing demand for digitalisation, the need for professional services is unlikely to diminish. Partners that capitalise on this opportunity should expect not only increased profitability, but increased growth as customers' needs continue to shift.

Automation Eases Strain for IT Teams

The playing field is constantly changing with automated, intelligent solutions. Although customers may be aware of the benefits of upgrading to an automated network, it can be daunting for in-house IT teams to know where to get started, especially when there's minimal room for downtime.

How can partners maximise the profitability potential of automated networks? Seeing is believing. If partners can facilitate a proof-of-concept for a customer, it illustrates how efficient automated networks can be, in daily operations and in deployment.

Automation is the cherry on top when it comes to offering the best solutions and services to customers. Going back to the idea of the customer wanting partners to help ease the pressure and complexity of upgrading the network and general network management, automation ensures network management is straightforward, without the partner having as much hands-on responsibility whilst still meeting customer needs.

Automation is increasingly being used for network management within intelligent solutions, and partners can boost their profitability by utilising it and knowing how to sell the benefits to customers.

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About the Author(s)

Dale Smith

Channel Director, EMEA/LATAM, Dale Smith

Dale Smith is channel director, EMEA/LATAM, at Juniper Networks. He has 20 years of experience in technology, starting his career in the partner community and then moving to value-added distribution. He joined Juniper Networks in May 2018 from Exclusive Networks, where he was EMEA channel manager.

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