Avant, Tech Advisors Eye '$100 Billion' IT Buying Shift

AVANT SPECIAL FORCES SUMMIT — Technology advisors (TAs) and technology services distributors (TSDs) are driving an estimated $12 billion in technology spend, according to Avant CEO Ian Kieninger.

Kieninger in a keynote at the Avant Special Forces Summit Tuesday in Phoenix said the trusted advisor channel Avant services has been growing at a 28% clip. It improved from an estimated $2 billion in vendor billings across the industry five years ago, to about $12 billion in 2024.

"The GDP only grows at 2.5%. The global IT market is growing up 3.1%, so I think we're kicking ass," Kieninger said. "There’s $100 billion shifting in front of our eyes, from legacy IT distribution to the opex, as-a-service trusted advisor channel.”

Advisors, once known as agents, operate in a model that is unique within the larger indirect technology sales channel. They partner with software and service provider suppliers, who manage and bill the end-user business customer and pay the advisor with a monthly commission for the lifetime of the customer. Advisors represent a fast growing component of various IT and telecommunication vendors routes to market. For example, Cloudflare has gone from 3% channel-driven revenue to 90% in a few years since it began partnering with Avant and other tech services distributors, Kieninger said. He said AT&T is seeking to drive 50% of its fiber business through the channel, which adds up to a $5 billion opportunity.

Related:What Is a Technology Advisor? Understanding the Role, Scope and Size of the TA Model

Avant's Ian Kieninger

Kieninger said the as-a-service nature of advisors has allowed them to expand their focus from telecom and connectivity to include cloud, data center, managed IT services, cybersecurity, customer experience and now artificial intelligence. Kieninger added quantum computing as another technology that might enter the portfolio in the future.

“If you look back over 15 years, it's been a big journey for being a single-threaded broker to a multidimensional, high-powered trusted advisor selling five or six advanced technology categories," he told attendees.

Kieninger said Avant has been pushing awareness of the trusted advisor model to the end user, in hopes that advisors will spend less time explaining and justifying their model and more time consulting and selling.

“We're showing up at places like Enterprise Connect and end-user conferences. We're creating a forum to bring customers into a room together with really cool brands and great trusted advisors. We're out there doing CIO events, so we're standing next to our trusted advisors, talking to IT buyers about technology. We're bringing our top talent to help you go convince them that the trusted advisor is the right place to turn," he said.

Related:Avant Looks Beyond CCaaS with CX Effect Acquisition

Advisor Model Prevails

Luminaries across the broader IT channel have extolled the benefits of recurring revenue, particularly when speaking to audiences of value-added resellers, who historically based their businesses on up-front, one-time sales of hardware. Add to that the influence of IT staffing shortages and macroeconomic uncertainties that have incented purchasers to emphasize operational expenditures (opex) in their budgets.

That reality is nothing new to advisors, who have been selling recurring services for the better part of 40 years.

“Technology's moving from on-prem to this as-a-service, opex world. The on-prem value that the channel offered in the past is starting to diminish because it's changing. Well, guess what? This community is comfortable and used to selling reoccurring revenue services. It fits right in with what we've been doing for decades," Kieninger said. "A huge proof point to this; there are 10 times more VARs in this room than we've ever had before.”

Kieninger and Avant co-founder Drew Lydecker started their careers in the channel at CDW, where they built an advisory practice at the behemoth VAR. Today, several large VARs and systems integrators use TSDs like Avant to source cloud and carrier services through a monthly commission-based revenue model. CDW, Presidio and SHI are just a few of the VARs that partner with Avant.

Related:8 Takeaways, Questions from Avant Special Forces Summit

Information, Complexity Increase in Buying Process

Kieninger has talked about shifts that are taking place at the customers whom tech advisors serve. That includes the entrance of more digitally savvy millennials who engage in more upfront research about technology and vendors before contacting an advisor. In addition to tapping into resources from research firms like Gartner, IT buyers are using large language models to assist with research, Kieninger said.

As a result, information-gathering is no longer the channel partner's value-add. He said partners may still be tasked with building spreadsheets of different vendor options and quotes, but they'll need to add their own flavor.

“That responsive approach is not going to be as valuable in the future. We need to move ourselves into what's called a prescriptive sales approach," he said. " ... We've got to make the buyer's journey less painful. We've got to bring clarity and informed decisions with an opinion. But we have to back it up by verified sales data, analysis and examples.”

That data and consulting will also help advisors handle widening purchasing committees. Kieninger said Avant has observed sales cycles lengthening, with a key culprit the increased number of buyers involved. That number is an average of seven for the enterprise, according to Gartner.

And CIOs may not be the primary target.

“Some of you are really good at selling to the CFO. I've seen some great playbooks. I've seen some people have a really good strategy around the CMO, attacking that angle. A lot of the contact center business we're selling is signed off on by CMOs or CROs," Kieninger said. "However, far too many of us are still positioned at that middle level IT buyer. There are two problems with that. One, they're really great stacking up pricing on the spreadsheet, and not so great at business outcomes. And guess what? Their power, which wasn't even that great in the past, is diminishing."

Rise's Eric Ludwig

Eric Ludwig, co-founder of Avant partner Rise Technology Advisors, said many customers are dealing with too much information. Advisors will need to use more than spreadsheets to help them wade through the complexity, he said.

"These are all delivered as a service, and service performance and leverage can't be calculated on a spreadsheet," Ludwig told Channel Futures.

Alvaro Gonzalez, senior vice president of channels and alliances for Avant supplier Thrive, credited Avant for building empirical data, such as vendor NPS scores on portfolio crowdsourced from advisor partners.

"Everything that we do, from the supplier standpoint, is trying to marry up our expertise in the things that we do ... with getting to the right opportunities in the right segments where it is the most friction-free experience for us to have the opportunities where we are qualified well to win," Gonzalez told Channel Futures.

AI and Advisors

Avant last month announced the acquisition of specialist TSD CX Effect. Avant has framed the acquisition as one of the ways it plans to capitalize on the AI opportunity. CX Effect added dozens of new vendors, some of them with an AI focus.

However, Kieninger on Tuesday emphasized how advisors are seeing AI "designed into everything we're selling already." Moreover, he said businesses' AI investments will spur investments across the stack. Avant dubs this trend " the era of the global upgrade."

"If all your customers are going to take advantage of AI, then guess what they're going to need? More bandwidth, more power, more data center, security, more networking, more cost," he said. "It is the ultimate double-dip opportunity. Sell the AI solution; everything else grows."