The document summarizes findings from a study on sales and marketing trends in the IT channel. Some key findings include: - Many channel firms see a need to transform their business models to focus more on services like managed services and cloud as product sales margins decline. - Top challenges to business transformation are cash flow/financing and customer education. - Most channel firms see their sales and marketing efforts as only moderately effective. Managed service providers are more critical than solution providers. - Firms are taking actions like hiring new sales reps and increasing social media usage to adapt to new business models and sell more services.

1. Sales & Marketing Trends in Time of Business Transformation
CompTIA State of Channel Study
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September 2014

2. 17%
59%
24% 24%
55%
22%
Low degree Moderate
degree
High degree
2012 2014
Self Assessment Business Transformation
CompTIA MPS Trustmark Value Proposition
1. Validation of MPS expertise to customers
2. Mechanism to evaluate internal MPS
operations / follow best practices
3. Differentiator
15%
72%
13%
20%
49%
31%
15%
48%
37%
Low degree Moderate
degree
High degree
Small channel firm
Medium channel firm
Large channel firm
Current State of Transformation by Size
Source: CompTIA 4th Annual State of Channel: Base: n=350 IT channel firms
How Far Along the Path to Business Transformation?

3. Primary Catalysts for Channel Business Transformation
23%
23%
27%
32%
35%
36%
41%
Defensive move against obsolescence
Margins on product sales declining
Vendors pushing us to change
New financial models are more lucrative
Desire to move to a recurring revenue
model
Customer demand for different services
and IT delivery models
Cloud computing pushing us in new
directions
Source: CompTIA 4th Annual State of Channel: Base: n=350 IT channel firms

4. Top Challenges Experienced with Business Transformation
1. Cash flow and other financing challenges
2. Customer education
3. Balancing existing business operational needs with new business
4. Hiring skilled staff to accommodate new lines of business
5. Need for new kinds of technical training
6. Need for sales and marketing training and repositioning
7. Need to learn new financial metrics and accounting schemes
8. Lack of business transformation roadmap
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 4th Annual State of Channel: Base: n=350 IT channel firms

5. 29% 48%
21%
3%
Highly effective
Moderately effective
Hit or miss
Ineffective
Self-assessment of sales &
marketing effectiveness of channel
Source: CompTIA 4th Annual State of Channel: Base: n=350 IT channel firms
MSPs are far more critical of
the channel’s sales and marketing
acumen than solution providers.
Just 6% of them deemed
channel efforts ‘highly effective’
vs. 31% of solution providers
who responded favorably. Twice as
many MSPs characterized these
operations as ‘hit or miss.’
Channel Firms Weigh in on Sales & Marketing Efforts

6. 32%
34%
20%
15%
Enterprise (500+ staff)
Midmarket I100-499)
SMB (10-99)
Micro (Less than 10)
Typical Customer Size Last Year
More than TWICE as many
MSPs sell to either
company owners or non-IT
line of business executives
than do conventional
solution providers, who are
more than 3X as likely to
sell to CIOs or IT staff than
MSPs.
Source: CompTIA 4th Annual State of Channel: Base: n=350 IT channel firms
Customer Demographics Among Channel Firms

7. 1. Routine visits/interactions with existing customers to upsell
2. Marketing/business development to identify/attract leads
3. Sales proposals presented to customers
4. Outside sales rep face-to-face visits with potential new customers
5. Use of social media to attract new customers
6. Contractual terms discussed for services, including SLAs
7. Inside sales cold-calling of qualified leads
8. Purchasing outside database/customer list
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 ninth-ranked item.
Source: CompTIA 4th Annual State of Channel: Base: n=350 IT channel firms
Main Sales Activities Taken by Channel Firms

8. Actions Taken to Sell to Non-IT LOB Executive
Source: CompTIA 4th Annual State of Channel: Base: n=350 IT channel firms
19%
23%
25%
32%
34%
36%
40%
Incentives for staff to further engage with business
execs
Maintain dual approach for business and IT execs
to meet both needs
Hire new sales reps with experience in vertical
industries
Focus less on HW/SW specs and more on total
solutions
Redesign marketing collateral with more of an end-user
focus
Use of social media to target non-IT executives
Sales training to enable reps to sell to non-IT
executives
49% of
solution
providers
plan this
step vs. 28%
of MSPs

9. Social Media Usage and Marketing Plans for Future
42% Use of social media
34% Increased use of white labeling
32% Webinars, blogs, etc.
23% Hire of marketing professionals
20% No longer leading with vendor brand
or vendor certification skills to attract
customers
19% None of the above
Planned Changes in Marketing Strategy
Source: CompTIA 4th Annual State of Channel: Base: n=96 IT channel firms which are using social media
Plans to Increase/Decrease
Social Media Usage
35%
38%
2% 25%
Increase its usage significantly
Increase usage somewhat
Maintain same usage
NET Decrease

10. Impact of the Adoption of New Business Models, Such as
Managed Services and Cloud Services, on Sales Structure
12%
6%
28%
27%
20%
No impact
Simplifying the complexity dramatically
Simplifying the complexity somewhat
Increasing the complexity somewhat
Increasing the complexity dramatically
Source: CompTIA 4th Annual State of Channel: Base: n=350 IT channel firms

11. Staffing Activity for Channel Firm Sales & Marketing
26%
34%
39%
28%
51%
44%
36%
48%
23%
22%
25%
24%
Added new sales reps
Hired reps outside the IT industry
Eliminated sales reps based on
business model change
Added new marketing reps
Major activity Minor activity No activity
Source: CompTIA 4th Annual State of Channel: Base: n=350 IT channel firms

12. Rating Various Activities as Part of Sales Model Transition
10%
12%
12%
18%
17%
18%
15%
10%
49%
46%
47%
38%
48%
45%
50%
49%
41%
42%
41%
44%
36%
38%
35%
41%
Creating incentives to drive sales to new business
areas
Performing demand generation/lead generation for
new customers
Effectively rebranding/messaging as a services
provider
Learning to sell to non-IT and line-of-business end
customer buyers
Adjusting to different sales cycle durations
Realigning sales compensation models for reps
Hiring new sales staff to accommodate new lines of
business
Retraining existing sales reps to engage in services-based
selling vs. product/project sales
Major factor Minor factor Not a factor
Source: CompTIA 4th Annual State of Channel: Base: n=350 IT channel firms

13. About This Research
Source: CompTIA Market Research
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responsible for all content contained in this report.
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