Oct 22, 2019
Downers Grove, Ill. – Information technology (IT) channel companies are increasing their involvement with emerging technologies and actively seeking new partnering opportunities as they strive to maintain their market relevance, according to new research from CompTIA, the leading trade association for the global technology industry.
CompTIA’s “8th State of the Channel” report surveyed 505 U.S. companies engaged in the business of technology to gauge their views on today’s marketplace. These firms are among the nearly 150,000 U.S. channel companies that work with manufacturers and producers to bring technology products, services and solutions to customers.
Emerging technologies such as artificial intelligence, blockchain, drones, and the Internet of Things are viewed by many executives as an answer to the question about the channel’s future relevance.
“Most channel firms see major potential in emerging technologies,” said Carolyn April, senior director of industry analysis at CompTIA. “In many instances adoption of emerging tech remains a slow, iterative process for technology providers and customers alike. But more than half of the channel companies say they’re selling at least one category of emerging tech to customers today.”
The primary reason for adding emerging tech business lines – cited by 56 percent of companies – is the potential for greater revenue opportunities than provided by existing product offerings and customer demand. In fact, customer demand is the second most mentioned driver accelerating the channel’s move to emerging tech.
“Customers are eager to take advantage of this new crop of technologies as a way to drive their own revenue growth or streamline their operations,” April explained. “Many are turning to their current tech providers to help them get there.”
Competitor or Partner?
Accounting firms, law practices and digital marketing agencies are just a few examples of non-traditional players that have become sellers of technology products and services in recent years. This shift has created its own set of unique challenges for the traditional channel of MSPs, resellers, system integrators, and VARs.
But many channel firms are turning these challenges into opportunities by partnering with new market entrants. Three-fourths of channel firms say they frequently or occasionally partners with new players.
“These arrangements help fill gaps in skill sets or solutions portfolios, mitigate technical complexity that prevents some companies from entering new markets, and enable an easier entry into the emerging tech arena,” April said.
Greater use of marketing and social media is also in the channel’s game plan. Four in 10 firms are investing in these areas, including hiring people with marketing skills that fit best with today’s omnichannel way of communication with customers.
“The health of the IT channel remains strong, but some trepidation about its future has crept into the mindset of executives,” said April. “Optimism levels are more nuanced and less positive than in recent years.”
The majority of companies surveyed (59 percent) believe there is some truth to the notion that the channel’s relevance is waning, though they add the caveat that future viability will likely be determined by each company’s business model.
One-fourth of channel executives queried believe that predictions of the channel’s demise are overblown, while 15 percent say there is reason to worry.
“The channel’s chief worries lean more toward general economic issues – increased government regulation and worries about the economy,” April said. “There are also concerns about new competitors in the market and gaps in skills associated with emerging technologies. But many in the channel also see opportunities that can overcome these fears.”
The complete “8th State of the Channel” report from CompTIA is available at https://www.comptia.org/content/8th-state-of-the-channel. For all the latest news from CompTIA visit https://www.comptia.org/newsroom.
The Computing Technology Industry Association (CompTIA) is a leading voice and advocate for the $5 trillion global information technology ecosystem; and the more than 50 million industry and tech professionals who design, implement, manage, and safeguard the technology that powers the world’s economy. Through education, training, certifications, advocacy, philanthropy, and market research, CompTIA is the hub for advancing the tech industry and its workforce. Visit www.comptia.org to learn more.