IT and Business Insights for SMB Solution Providers

2022 State of the Channel: Happy Days Are Here Again

Turn that frown upside down, channel pros! Most of you have much to celebrate, according to our annual survey. By Rich Freeman

IT’S A GREAT TIME to be a channel pro.

OK, we’re hardly the first to make that observation. Yet after two years of coronavirus variants, topsy-turvy GDP, supply chain gridlock, and more, we simply can’t resist the urge to say it one more time. Or even two.

It’s a great time to be a channel pro.

Our latest State of the Channel report is packed with evidence. Where the study we published a year ago, based mostly on data collected late in 2020, offered hopeful signs of brighter days ahead for MSPs, VARs, and solution providers, this year’s data suggests that the indisputably indispensable role technology now plays in the world of hybrid work and digital everything has translated to boom times for ChannelPro readers, many of whom see even boomier times ahead.

That, anyway, is the good news. Dig into the numbers a bit and you’ll find hints that not everyone is sharing equally in that success. Dig even further, moreover, and you’ll encounter a few intriguing surprises in what’s helping growing channel pros grow.

Better Financials, Brighter Outlook

Let’s start with that growth. Forty percent of participants in our 2022 survey had higher revenue last year, and 42% had higher profits. That’s down from heady pre-pandemic 2019, when 53% of channel pros collected more revenue than the prior year and 50% recorded more profit, but meaningfully better than the 35% who said revenue was up and 37% who said profits were up in our 2021 report.

Most of you are bullish about the future too. Fully 64% of respondents to our latest poll anticipate greater revenue in 2022 and 60% predict greater profit, up from the already upbeat 51% each who predicted higher revenue and profit a year ago.

Market expectations among channel pros reflect further optimism. While 38% of readers, with inflation possibly on their minds, believe conditions will be the same or worse in 2022 for the economy as a whole, 69% believe they’ll be better for their own company and 35% think they’ll be much better. That last figure is up from 22% a year earlier. A hefty 73% of readers predict higher IT spending by their customers this year, too, versus 56% in our 2021 survey.

More money means more work, which in turn requires more people. As a result, while 44% of you expect headcount to remain about the same in 2022 (down from 53% in 2021), 50% expect it to grow (up from 41%).

With tech sector unemployment down to just 1.7%, according to February data from CompTIA, channel pros are well aware that they’ll have to pay those new hires, not to mention existing staff, more generously this year. Indeed, half of you expect to pay technicians more in 2022 (versus 31% in last year’s survey), 44% expect to pay salespeople more, and 30% expect to pay administrative staff more. On the plus side, 46% of you believe your personal income will be up in 2022 as well (versus 30% a year ago).

Yet for all the glad tidings in this year’s data, there are some troubling results as well. In particular, while higher percentages of channel pros saw revenue and profits rise last year versus the year before, 20% saw revenue decline in 2021 and 22% saw profit drop. Those figures are down from the 25% who reported lower revenue and profits in our previous State of the Channel report covering 2020, but still way up from the mere 6% of readers who experienced lower revenue in 2019 and 5% who pocketed lower profits back then.

About the Author

Rich Freeman's picture

Rich Freeman is ChannelPro's Executive Editor

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