Channel Influencer Spotlight: Forrester’s Jay McBain on the ‘Shadow Channel’ Threat

… back-end integration services; hotshot startups with hyper-targeted products; and adjacent consulting services, such as accounting firms, getting into the tech services game.

There’s a reason shadow channel companies have come to this space: high margins. This is a good sign for traditional channel companies, too, McBain says. Channel companies that can change course and court the LOBs will find a target-rich environment.

“I lived in the day of big 30-40 percent margins for PCs in the channel, and I was in charge of the programs that reduced that to two,” McBain says. “But today, I watch the margins in SaaS business applications at 40 percent. Millennials working at shadow channel companies have figured out the new buyer and how to add value, and they’re making money hand over fist.”

The channel is going to take off, he says, growing by five to 10 times over the next three to five years.

Afterburner

McBain isn’t slowing down, either.

He’ll deliver a keynote at the Channel Partners Conference and Expo in Las Vegas on April 18. He’s putting the final touches on a major Forrester report on channel marketing automation. This summer, he expects to graduate with an MBA from Louisiana State University.

Is it all hard work and no joy? Hardly.

McBain takes online courses at LSU from his new home in South Florida, where he lives with his wife, Michelle. Looking like a mansion fit for a movie star, the two-story, Spanish-style home is surrounded by palm trees. There’s a pool with a waterfall, pink flamingos, and a multi-car garage.

Inside the garage, among a few polished vehicles, is a brand-new Honda CBR650F motorcycle, because McBain still feels the need for speed.