Posted 11 March, 2016 • by Brandon Garcin
It’s always interesting to look at how technology service providers and resellers are conducting business in different geographic locations. What’s true in one location may not be true in another, and best practices, industry regulations and business drivers can vary from one place to the next.
CompTIA, a non-profit trade association with approximately 2,000 member companies, 3,000 academic and training partners, 65,000+ registered users and more than 2 million certifications issues, recently published their 5th Annual State of the Channel Report – and there were some interesting insights and takeaways specific to the U.K. market included. CompTIA Faculty and Managing Director Tracy Pound recently presented the results of this report at Continuum’s first, sold-out European Partner Day in February.
An abstract from CompTIA’s website reads: Seven in ten U.K. channel firms report at least some degree of business transformation taking place in their organization. This suggests a highly dynamic environment, and there are many obstacles to overcome as channel firms seek new partnering arrangements, meet new customer needs and build new models around emerging technology.
This summary touches three key drivers of growth and evolution in managed IT services today that aren’t bound to any particular geography; seeking out new partnerships, meeting new customer needs, and building new models to adapt to emerging technologies and solutions. In looking at the U.K. specifically, however, here are some of the key takeaways and insights reported:
When asked where channel revenue is coming from today, 46 percent of firms claimed the majority is coming from existing customers, while 35 percent reported it’s from a balance of both net new and existing customers. When looking to the future, however, the numbers begin to shift a bit. 41 percent of organizations expect to see more revenue over the next two years come from net new customers, while 32 percent expect more revenue from existing customers.
Looking at vendor relationships, 68 percent of respondents were “mostly satisfied” and only 21 percent reported being “very satisfied.” Interestingly, twice as many US-based respondents reported being “very satisfied” with vendor partner relationships. The report also explored top reasons to drop vendor partner programs; responses included the cost of membership, low margins or minimal discounts/rebates, lack of marketing support and several others.
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As cloud and virtual resources become increasingly accessible and widespread, MSPs are finding they no longer need to rely as heavily on hardware sales to achieve revenue goals. 38 percent of U.K. firms identified hardware sales as “very important” (the distinction from the US here was also sizeable, where 55 percent reported hardware sales as very important). Not surprisingly, cloud infrastructure was identified as the technology area with the highest-expected revenue growth.
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The report also contains some interesting insights and predictions regarding the future of the U.K. channel. 52 percent of firms identified their opinion as being “generally optimistic”, and 35 percent had “mixed feelings.” Respondents looked to opportunities such as cloud computing opening new doors, an increasing demand for managed services, and the fact that customers still want a local provider who acts as a trusted advisor.
Conversely, a skills gap for emerging and complex IT solutions, growing competition from new players like telecom providers and the notion that many aspects of IT are becoming easier to deploy and manage internally were reported as reasons to be pessimistic about the channel’s future in the U.K..
Brandon Garcin is Continuum's Director of Content Marketing, and is responsible for the creation and execution of a variety of resources designed to win new business and support existing customer accounts. He has authored more than a dozen eBooks which have generated thousands of downloads, and has consulted with hundreds of Continuum partners to help improve their marketing and lead generation efforts through website optimization and content development. Brandon is also the host of The Weekly Byte, a video and audio series produced by Continuum that provides quick, digestible tips and best practices that MSPs can use to help their business succeed.