OneAffiniti, a provider of marketing services for IT solution providers in the channel, has published the results of several surveys that show 2017 was a good year relative to expectations for the bulk of the U.S. channel. The results show that 41.5 percent of the total respondents saw increased revenues, while 44.8 percent report revenues were stable year over year. Only 13.7 percent of the respondents reported a decline in revenue.
Solution providers that saw increased revenues in the past year typically focused more of their attention on IT security and cloud computing services, says OneAffiniti CEO Joel Montgomery.
Montgomery says that at the beginning of 2017 the general expectation was there would be a significant amount of consolidation across the U.S. channel. But a year later Montgomery says the U.S. channel continues to be vibrant. Versus being a threat cloud computing, especially, have proven to provide more of a boon than initially anticipated, says Montgomery.
In fact, one recent survey conducted by OneAffiniti finds 68 percent of U.S. resellers view the cloud as a sales opportunity. Only seven percent of U.S. reseller saw it as a threat, while 25 percent was undecided.
“There’s a lot of opportunity around backup, email, and application hosting,” says Montgomery.
It’s unclear what impact revisions to the U.S. tax code might have on the channel in 2018. Solution providers will undoubtedly have access to more dollars to invest in their businesses. But it’s unclear to what degree customers will reinvest tax savings in IT. The good news is that many organizations today are trying to morph into becoming a digital business. But in many cases, those initiatives result in more of a reallocation of existing IT budgets versus an actual increase in IT spending.
Montgomery says there’s still room for improvement in 2018 for the channel. He says the challenge IT vendors face is, as always, finding ways to optimize the lead generation process. To that end, Montgomery says OneAffiniti focuses its efforts on routing sales leads from potential customers to solution providers that already have a relationship with the customers, which tends to increase lead closing rates.
At the same time, Montgomery notes that as channel partners continue to lead with their own services, versus solely focusing on products, and many of them are more profitable than ever before.
The imminent demise of the channel has been predicted many times before. Each time, however, IT vendors rediscover that relying on channel partners to expand their market reach in addition to offsetting services support costs increases profitability for all concerned.
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