Shaun Lynn – Agilitas CEO
2017 has been an interesting year so far for the Channel. We’ve seen continued market disruption and many are facing an uncertain future with the precise access to the European Union we can expect still up for debate.
Despite this however, all indications point to a positive outlook for the channel. The bottom line is we may face a tough time ahead, but at the end of the day, the channel provides essential business services, that will continue to be of significant importance particularly as the technology sector continues to grow.
You might be surprised to learn that this is a view shared by much of the channel. In an independent survey conducted for Agilitas by OnePoll, 74% stated that they expect the channel to see growth or stay the same size between now and 2020. Despite uncertainty, confidence that we’ll pull through appears to be high.
That being said however, as an industry we must not simply sit on our laurels and be complacent. If there is one thing we’ve learnt from our years of working with the Channel it’s that change and innovation are both critical. Markets and technology changes, and therefore so do customer requirements.
Understanding market direction is key to building a successful business. Advancements in areas such as artificial intelligence, virtual reality, machine learning and on-demand services are all working to alter the channel landscape in addition to revenue streams.
New technologies are arguably increasing demand for channel services. The more dependable technology there is, the more we as an industry will be required to provide support and hosting. Our research pointed to the rise in support services – expected to provide the strongest revenue streams by 2020. The trend highlights the need for specialists to look at how they can provide required levels of customer support. Business models may need examining and tweaked to increase support scalability to prepare for changing priorities and requirements.
The trend has further manifested itself in the rise in collaborative services. There appears to be a general feeling amongst channel players that we can’t all be a one-stop-shop. The result is that we’re starting to see different company types from VARS to Vendors and Distributors evaluate and adopt a more collaborative approach to servicing customers. At the same time, these companies are changing their relationships with one another, opening up more dialogue and increasing interdisciplinary collaboration.
Collaboration’s rise in transparent and white-label services has meant service providers can on-board credibility to better service customers. The benefit for the end user is an enhanced guarantee of quality from industry experts. It highlights a wider recognition from channel players that each shouldn’t be afraid to partner and focus on their own expertise.
One of the most significant changes we’re expecting to see that channel suppliers should be adopting now is the move from CAPEX to OPEX models. Big one off capital costs are already well in the past for some companies however, according to our research we’re set to see a big move from CAPEX to OPEX between now and 2020: IT services for example is set to see the biggest shift (30%), followed by hardware sales (19%). OPEX offers a more cost effective, agile and scalable approach to doing business. In changing markets, with continued technology innovation, business buyers do not want to be tied down to an expensive solution for five years. They want flexibility, the ability to swap solutions and services in and out, and grow their IT footprint as the business demand dictates – highlighting a need for organisations to look at how they can make their services both more flexible and operations focused.
To take hold of these trends and truly drive growth, channel leaders will need to continually adapt and change. We’re in a fast evolving technical environment, and in the same way that organisations are innovating with technology, they must do the same with their approaches to business. To stay relevant, the channel needs to innovate, collaborate and disrupt, and most importantly, not get left behind.