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CompTIA 5th Annual State of the Channel Study

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he indirect IT channel continues to experience healthy growth along with the rest of the IT industry, remaining resilient and upbeat about future prospects as both channel veterans and newcomers find their way in a rapidly evolving market.

The Fifth Annual State of the Channel study provides an overview of the size, shape and growth factors influencing changes and attitudes in the channel. It offers deep analysis of the topics driving debate across the channel and further delves into today’s leading sales and marketing practices and challenges. The report also provides knowledge and applicable insights while examining the channel’s most pressing hurdles.

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CompTIA 5th Annual State of the Channel Study

  1. 1. 5th Annual State of Channel Study Copyright (c) 2014 CompTIA Properties, LLC. All Rights Reserved. | CompTIA.org October 2015
  2. 2. 3% 14% 22% 61% Generally pessimistic Though mostly positive in their thinking, two groups have a slightly more pessimistic outlook than the rest: • Small channel firms (10-99 employees) • Younger channel firms (Less than 5 years in business) Big Picture Opinion on the Future of the IT Channel Don’t know Mixed feelings Generally optimistic Source: CompTIA 5th Annual State of Channel: Base: n=350 IT channel firms
  3. 3. Reasons to Be Optimistic About Channel’s Future 1. Cloud computing opening new doors 2. Customer demand for managed services 3. Customers still want a local provider to be a “trusted advisor” 4. Broader use of tech by all types of customers ups need for IT experts 5. Complexity of today’s solutions and services 6. Demand for vertical industry expertise 7. Customers want internal IT free to work on strategic projects 8. Vendor direct sales insufficient to cover full market Note: rank order listings are useful for summary purposes, but should NOT be interpreted quantitatively. For example, the first-ranked item is not necessarily 8 times more important than the eighth-ranked item. Source: CompTIA 5th Annual State of Channel: Base: n=350 IT channel firms
  4. 4. Reasons to Be Pessimistic About Channel’s Future 1. General business challenges 2. Skills gaps for emerging/complex IT 3. Wider availability of purchase options/customer self sufficiency 4. New types of competitors (e.g. telecom providers) 5. Many aspects of IT easier to deploy and manage internally 6. Cloud computing and shift away from on-premises IT 7. Aging of the channel/lack of younger generation filling void 8. Vendors increasingly going direct 9. Customer access to price and feature transparency online Note: rank order listings are useful for summary purposes, but should NOT be interpreted quantitatively. For example, the first-ranked item is not necessarily 8 times more important than the eighth-ranked item. Source: CompTIA 5th Annual State of Channel: Base: n=350 IT channel firms
  5. 5. 55%37% 7% By the numbers… • 66% of channel firms identifying CLOUD as their primary business model consider hardware sales very important • Just 43% of firms older than 10+ years consider hardware very important, compared with roughly 2/3 of firms younger than that Does Hardware Still Matter to Today’s Channel? Not important Very important Somewhat important Source: CompTIA 5th Annual State of Channel: Base: n=350 IT channel firms
  6. 6. Channel Revenue and Customer Trends Copyright (c) 2014 CompTIA Properties, LLC. All Rights Reserved. | CompTIA.org
  7. 7. Primary Means Channel Firms Make Money Today 8% 36% 37% 39% 43% 46% 48% Other vendor-driven benefits Recurring revenue (managed services/cloud) Referral fees Upfront discounts/backend rebates Margin on product sales Project-based work (not ongoing) Consulting services (no products sold) Source: CompTIA 5th Annual State of Channel: Base: n=350 IT channel firms
  8. 8. In business <5 years In business 5- 9 years In business 10+ years Product sales (hardware/software/peripherals) 62% 58% 38% Project-based solutions & services 62% 70% 35% Recurring revenue (managed/cloud services) 64% 63% 52% Other (e.g. referrals, extended warranties, etc. 56% 47% 28% Positive Expectations for Growth by Business Model Percentages above represent NET findings, combining responses for “significant growth increase” with “some growth increase.” Source: CompTIA 5th Annual State of Channel: Base: n=350 IT channel firms
  9. 9. Generating Revenue: Who Does the Heavy Lifting? 15% 19% 22% 45% Other channel firms you partner with Distributors Vendors you partner with Your own company Source: CompTIA 5th Annual State of Channel: Base: n=350 IT channel firms
  10. 10. Expectations for Revenue Growth by Tech Area 1. Security (NET 63%) 2. Cloud infrastructure (NET 61%) 3. Storage (NET 60%) 4. Custom application development (NET 59%) 5. Database/data analytics/BI (NET 57%) 6. Cloud SaaS (NET 57%) 7. Business process automation (NET 57%) 8. Mobility solutions (NET 56%) 9. Backup/DR (NET 56%) 10. Office productivity (NET 55%) Source: CompTIA 5th Annual State of Channel: Base: n=350 IT channel firms Not everyone’s a happy camper. Respondents professing general pessimism about the channel’s future expect NET growth in all these tech areas by about 20% less on average.
  11. 11. Channel Revenue: Customer Contributions 28% 45% 27% Majority net new customers Majority existing customers Balance between net new and existing 46% 30% 24% Expect more from net new Expect more from existing Expect balance stays same Where is channel revenue coming from TODAY? Where do channel firms see revenue coming in next TWO years? Source: CompTIA 5th Annual State of Channel: Base: n=350 IT channel firms
  12. 12. Vendor-Partner Relations Copyright (c) 2014 CompTIA Properties, LLC. All Rights Reserved. | CompTIA.org
  13. 13. 41% 52% 7% Food for Thought… • Statistically speaking, ZERO respondents reported being very or mostly dissatisfied with vendors • Satisfaction levels were mostly consistent across all channel business model types, company size and years in business Channel Contentment with Vendor Relationships Partly satisfied/di ssatisfied Very satisfied Mostly satisfied Source: CompTIA 5th Annual State of Channel: Base: n=350 IT channel firms
  14. 14. 28% 14% 56% Profile of firms expecting a NET drop in number of programs • 7% micro • 23% small • 20% medium/large • 19% <5 years in business • 15% 5-9 years in business • 10% 10+ years in business Expectations for Partner Program Participation Next Year No change in total # of programs NET drop in total # of programs NET gain in total # of programs Source: CompTIA 5th Annual State of Channel: Base: n=350 IT channel firms

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