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August 4, 2017
COMPTIA CHANNELCON — Channel research firm The 2112 Group has teamed with Barracuda-owned Intronis, the provider of backup and recovery for MSPs, and distribution giant Ingram Micro on separate studies that reveal eye-opening channel trends.
The first, State of North America Managed Services, homes in on the importance of recurring revenue and the role managed-services sales can play in keeping a channel business viable and growing.
Intronis’ Neal Bradbury
A channel partner, on average, now earns nearly 30 percent of its revenue and almost 20 percent of its profit from managed services — supporting the study’s finding that managed services are the greatest driver of growth for any channel company. They outpace both professional and value-added services in percentage of growth.
“Those channel firms that adopt recurring revenue are set up for success for the future,” Neal Bradbury, VP of channel development, Intronis, told Channel Partners in a sit-down interview at CompTIA’s ChannelCon in Austin, Texas. “Those that aren’t might have difficulty with growth.”
Breaking it down, nearly two in three (64 percent) channel businesses surveyed for the Intronis-commissioned study said that managed services are their biggest drivers of growth. And with that comes more money: More than half said prices of, and profits from, managed services are on the way up.
The demand for security is the biggest driver of managed-services adoption, the report revealed — and the opportunity in security is evident. Only 15 percent of those surveyed offer security services, but nearly two in three (62 percent) plan to within the next year.
“If you look at the security trends, there’s an acute shortage of security pros in the market,” said Larry Walsh, CEO and chief analyst, The 2112 Group, in that same interview. “The only way the market is going to solve that is through services. Services will scale to meet the market demand for talent.”
The report identified managed security as a very promising growth area for channel firms, no matter if large enterprises or SMBs are their primary customers. Ransomware attacks and other threats are proving to pose a challenge for any size of business.
Yet many channel companies still don’t offer security services; not only are only 15 percent of survey respondents offering security services, few are selling sophisticated services such as security policy management; incident response and mediation; security information and event management (SIEM); and cloud security.
The study further revealed that MSPs are missing an opportunity in data recovery. Many don’t go beyond backup; only 30 percent of those surveyed actually recover data, showing that there’s plenty of room for growth in this area.
“This survey reinforces my daily conversations with trusted partners — they want to work with a solutions provider that embraces changes in the IT landscape,” said Michael Hughes, senior vice president, worldwide sales, Barracuda. “Whether it’s cloud computing, managed services or new offerings available for resale, a smart channel organization recognizes changing market conditions and adapts accordingly, and organizations that aren’t doing this …
… risk being left behind.”
That’s not the only partnership involving The 2112 Group making headlines at his week’s ChannelCon. The research firm also teamed with Ingram Micro on a new tool for partners that’s designed to help them build bigger and more profitable cloud practices.
Ingram Micro’s Jason Bystrak
Dubbed the 2112 Group Cloud Altimeter, this new web-based tool helps partners develop new cloud strategies and shows them how they stack up against their competition. It offers ideas on how to improve cloud-services performance and ROI.
“Collectively, The 2112 Group and Ingram Micro have delivered an easily accessible and powerful tool for collaborative growth,” said Walsh. “The insight and intelligence provided by the Altimeter gives channel partners a starting point for developing better cloud practices that can lead to greater cloud sales growth and business profitability.”
And it’s not just software as a service (SaaS). Jason Bystrak, global executive director, technology partner enablement, Ingram Micro Cloud, tells Channel Partners there’s a big opportunity for his company’s partners in infrastructure as a service — so much so that it has reconfigured its structure in part to help address the growing demand across the entire cloud landscape.
“Twenty-six percent of IaaS business goes through the channel, but only 7 percent of our business is IaaS,” said Bystrak. “The growth has been about 10 times the rest of the cloud … it’s an opportunity to add more value.”
Bystrak’s comments come on the heels of a new report, “2017 State of the U.S. Cloud Channel – A Special Report by The 2112 Group, Microsoft and Ingram Micro Cloud.” Major takeaway: To improve cloud development and practices, partners better put more emphasis on strategic planning, marketing and sales execution. They should also pay closer attention to development of closer vendor and customer relationships.
Read more about:Agents
Editorial Director, Channel Futures
Craig Galbraith is the editorial director for Channel Futures, joining the team in 2008. Before that, he spent more than 11 years as an anchor, reporter and managing editor in television newsrooms in North Dakota and Washington state. Craig is a proud Husky, having graduated from the University of Washington. He makes his home in the Phoenix area.
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