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Channel Partners Focus on Cloud and Managed Services

Most business technology vendors are already in the process of revamping their traditional marketing organizations to better support their IT channel partners. The ongoing shift to a progressive digital marketing methodology has challenged many leaders, due to the difficulty in re-training their legacy employees.

Moreover, demand for marketing talent that is skilled in the development of digital business transformation projects has increased over the last year, yet the available talent pool remains somewhat limited. As a result, the competition for recruiting (and retaining) digital polymaths is intense -- particularly for those marketers that possess knowledge of hybrid cloud and IT security technologies.

Market Development in the Channel

The global information technology (IT) channel remains optimistic -- despite predictions of a challenging 2016 -- according to a recent Canalys survey of 260 IT channel partners around the world. 75 percent of partners expect revenue growth in 2016, while 70 percent expect profitability growth. They'll likely achieve that growth via superior market development skills.

Revenue growth opportunities for the channel remain abundant in most sectors. Hyper-converged infrastructure, cloud-based applications and software-defined infrastructure were all highlighted as important growth categories. Of all the segments, IT security is expected to perform the best in 2016, with 87 percent of survey respondents expecting growth.

"IT security is already the number one priority for end customers, and is only going to grow in importance as they invest in next-generation data centers, digital transformation, cloud, mobility and IoT. But this also illustrates the complexity of the security landscape – to capitalize, partners will need to develop much greater levels of expertise," said Jordan De Leon, analyst at Canalys.

According to the Canalys assessment, the vast majority of channel partners see themselves in a state of transformation -- realizing that as the industry evolves, so too must the channel landscape. Cloud and managed services are becoming ever more important to the channel business model, with managed services in particular now contributing significantly to partner profitability.

Competition for New Managed Service Customers

For two thirds of respondents, managed services are now more profitable than reselling traditional IT products. That being said, Canalys believes that the channel must address both new buyers within existing customers -- especially Line of Business leaders -- as well as exploring and pursuing completely different IT sales opportunities.

But new competitors are emerging in the channel, from highly focused cloud-only resellers to savvy digital transformation consultants serving the specific needs of industry verticals, such as banking and healthcare.

These companies are application-literate and professional services-led. They're already helping their customers solve business issues, not just selling new technology or products. Channel partners must invest in developing their own vertical and pre-sales capabilities, in order to stay ahead of the game.

For IT vendors, these findings show the importance of building integrated relationships with channel partners. Maintaining simple, easy-to-use partner programs and predictable incentive schemes, while adapting ongoing training and certification to reflect the known technology buyer demands, will be vital for success.

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