Channel Futures' 2023 EMEA Outlook: Partners Will Help Customers Weather the Storm
EMEA channel experts from Dropbox, Juniper Networks, Kaseya and Mitel give their channel predictions for 2023.
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There was a clear surge in cloud uptake during the pandemic. However, current geopolitical and economic pressures could drive a re-think in 2023 when it comes to cloud.
“In terms of cloud we’ve started to see companies suffer from increased professional services costs, and increased software licensing fees as well. These were in line with contract renewal cycles, where companies were facing increases, largely due to skills costs. What we’re seeing now are those energy costs trickling down, we’re seeing rising public cloud infrastructure costs.” – Penny Madsen, senior research director, IDC Cloud Pulse
And while cloud is still one-third of IT budgets, said Madsen, those budgets are decreasing in line as a proportion of revenue. So now companies are trying to do more with a lot less. That means they’re going to be a lot more strategic about how they consume IT, and what they consume.
“There is a cloud re-think happening. According to Aptum’s Cloud Impact Study, almost half (47%) of respondents anticipate an increase in their organisation’s use of traditional infrastructure over the next 18-24 months. [This is] up from just under a quarter (23%) in 2021. In the past, cloud migrations were used as a capex delay, in the future, cloud costs are seen as rising so need to optimize / reduce exposure.” – Michael O’Hara, MD of distributor DataSolutions
The era of “one and one” could be over. In 2023, vendor partner programs will continue to shift away from one-off transactional deals. Instead, partners will increasingly be rewarded on the value they provide throughout the entire customer life cycle.
“The marketplace shift toward customer life cycle management (CLM) will continue in 2023 and partner programs that fully embrace it will see the most engagement. Fully engaged partners who are given the right tools and data to respond to customer priorities are positioned to benefit the most from this focus on CLM as customers look to drive sustained value from their communications investments – now and into the future. To further support CLM, we will see a trend toward programs that encourage partners to further embrace their role as trusted advisors throughout the customer experience.” – Lana King, VP of partner programs, training and enablement, Mitel
We’re already seeing this in action. The forthcoming launch of HPE’s new partner program, Partner Ready Vantage, will approach channel engagement through a “customer lifetime lens.”
“The new partner program recognizes more IP of different partners,” said HPE’s UK MD, Matt Harris. “Second, it has customer life cycle value in mind.”
Elsewhere, NetApp’s forthcoming partner programme, Partner Sphere, “is focused on the value and contribution the partner ecosystem provides through the life cycle of a customer engagement.”
The lack in face-to-face interaction during the height of the pandemic was a source of frustration for many partners. However, 2022 saw the return of many in-person channel events. This will continue in 2023.
“One of the most important trends we’ll start to see in 2023 is an increase in in-person events and meetings, especially within the channel ecosystem.
“With the world returning to normal, we’ve seen a significant rise in the return of in-person meetings throughout 2022 – and we’ll see the same as we head into next year. As international travel continues to bounce back to pre-Covid levels, we’re expecting an uptick in the number of partner, distributor and vendor events on the calendar.
“What does this mean for the channel? We’re expecting a better understanding of users and products. The deeper the knowledge and the closer the relationships, the more business success we’ll see driven across the board for everyone.” – Tim Britt, head of channel, EMEA, Dropbox
Research by Schneider Electric and Canalys shows that more than 75% of customer RFPs have sustainability criteria included today. Sixty-nine percent of partners confirm that customer environmental considerations are driving IT investment decisions.
“Services such as those that look at the total cost of ownership, power audits, battery refreshes, predictive failure analysis and monitoring can help customers avoid waste and reduce costs. These services are great opportunities for the channel and we are likely to see greater demand for them in 2023. – Brent Owens, director sales & partner enablement EMEA, Vertiv
Microchip supply chain issues have been causing serious concerns for the tech industry. The problem has been exacerbated by COVID-19 and Russia’s invasion of Ukraine. A report by Accenture predicted that the supply chain challenges could result in a €920 billion cumulative loss to the gross domestic product (GDP) across the Eurozone by 2023.
Lead times for some advanced chips needed for medical devices, telecoms and cybersecurity systems have reportedly extended to approximately 52 weeks. This is compared to a previous average of 27 weeks, according to data from Everstream. This doesn’t, of course, factor in product manufacturing time.
“In addition to impacting the ability to produce and meet the demand for existing products, the lack of chip availability has meant a reduction in the capacity to develop new products. Older generations of chips that are used in the manufacture of white goods, for example, are made using equipment that has been used for several years. Innovative new components that run AI models and render graphics in the latest smartphones and computers, however, require cutting-edge technology to manufacture.
“While this all paints a challenging picture, things may be looking up. With the cost of chips being reduced and consumer spending cooling down for a myriad of reasons, supply may yet catch up with the demand in 2023. While there are immediate challenges to navigate, we are likely to see the pressure taken off the microchip industry next year.” – Neil Patel, marketing director, D-Link
Those that adapted and embraced new ways of working during the pandemic are faring much better than those that failed to do so. This is one reason for continued M&A activity in EMEA in 2023.
“Those that miscalculated the risks are now sadly struggling. We’re seeing evidence of this today in the rise in company acquisitions and integration, as well as lingering uncertainty for some businesses. These have been the toughest to watch.
“The channel will continue to consolidate through acquisitions, with more and more of the bigger channels buying our smaller channels.” – Sean Collins, VP of EMEA channel and sales, Extreme Networks
Meanwhile, the monthly revenue business model adopted by many MSPs has made them a popular target for acquisitions by tech companies.
“We have seen U.S. and Canadian firms buying European companies as the exchange rates have been in their favour. The market is moving toward a combination of very big MSPs and boutique MSPs serving certain sectors. MSPs will need to stand out by building a distinctive profile for themselves and ramping up their sales and marketing efforts.” – Greg Jones, VP of business development, EMEA, at Datto, a Kaseya company.
The number of B2B marketplaces has exploded over the past few years. Indeed, Canalys has said that these marketplaces will become critical distribution channels in the future.
The likes of Adobe, Azure, Salesforce, AWS and Oracle Cloud Marketplace currently dominate the industry.
“Marketplaces will grow more important to enterprises in 2023 as they embrace the ‘one-stop-shop’ approach to application deployment. The ‘marketplace-as-a-channel’ strategy will provide a one-stop-shop approach for companies overwhelmed by the complexity of their tech stacks. While technology providers will look to marketplaces to increase channel revenue, the growing popularity of marketplaces will provide development agencies with additional opportunities to partner with companies to create and execute their channel strategy properly. – Kirk Horton, VP of channel & partners, Netacea
The channel is facing the most challenging business environment in over a decade. At the same time, longstanding challenges are not going away. In particular, a shortage of talent and a continued increase in cyber threats. There is an opportunity to help customers navigate these challenges.
“There is a real opportunity for the channel to help their customers to weather the storm. When a problem seems too complex to solve alone, that’s where partners can really add value and differentiate themselves. Those that hold trusted relationships, know their customers inside out and are looking out for their customers’ best interests, will become the most valuable partners during this time.
“With business investment likely to remain slow in Q4, companies will start to shift the focus to where costs can be reduced or savings can be made. Partners, VARs and distributors need to think about how they can help their customers simplify their tech stack, consolidating vendor relationships to deliver value for money. The partners that offer a managed service, helping their customers to reduce complexity and improve operational efficiency, will be best placed to navigate the undoubtedly challenging end to the year.” – Charles Milton, VP strategic alliances, Censornet
The working world has experienced a lot of upheaval and chanrge over the past few years, from the pandemic to “The Great Resignation.” Now, prepare for “The Great Reshuffle.”
“The ‘Great Reshuffle,’ combined with skills shortages, has created much change in the IT industry. It’s likely the industry will continue to feel the effects going into 2023. Workforce changes and skills shortages are both an opportunity and a risk to partners, resellers and MSPs.
“This means more businesses will be looking to invest in new solutions that can handle a distributed workforce effectively and safely. For other businesses, this change in work may call for an MSP to better manage the network.
“Similarly, skills shortages in the IT industry mean many businesses are lacking the necessary skills within their IT teams. So resellers can recommend AI-driven network solutions that offer an extra pair of expert hands, and MSPs provide the specialist skills businesses need to navigate digital transformation successfully.
“The flip side is that the channel landscape is also hit with the same skills shortages and workforce changes. Therefore, those same challenges are impacting resellers and MSPs. In 2023, the channel should prepare to see a continuation of these issues and plan for upskilling the workforce to harness the opportunities with businesses.” – Sander Groot, head of channels EMEA, Juniper Networks
The working world has experienced a lot of upheaval and chanrge over the past few years, from the pandemic to “The Great Resignation.” Now, prepare for “The Great Reshuffle.”
“The ‘Great Reshuffle,’ combined with skills shortages, has created much change in the IT industry. It’s likely the industry will continue to feel the effects going into 2023. Workforce changes and skills shortages are both an opportunity and a risk to partners, resellers and MSPs.
“This means more businesses will be looking to invest in new solutions that can handle a distributed workforce effectively and safely. For other businesses, this change in work may call for an MSP to better manage the network.
“Similarly, skills shortages in the IT industry mean many businesses are lacking the necessary skills within their IT teams. So resellers can recommend AI-driven network solutions that offer an extra pair of expert hands, and MSPs provide the specialist skills businesses need to navigate digital transformation successfully.
“The flip side is that the channel landscape is also hit with the same skills shortages and workforce changes. Therefore, those same challenges are impacting resellers and MSPs. In 2023, the channel should prepare to see a continuation of these issues and plan for upskilling the workforce to harness the opportunities with businesses.” – Sander Groot, head of channels EMEA, Juniper Networks
The European channel is heading into 2023 facing serious headwinds. The war in Ukraine. Soaring energy prices. Record inflation levels. Supply chain problems. A skills shortage. This is set against increasing regulatory requirements and a new, post-pandemic workforce. How will the channel react and respond to these challenges? Is there any good news to be found?
We asked EMEA channel experts for their predictions on such topics as the economy, cloud, sustainability and M&A.
Industry experts we polled include:
Tim Britt, Dropbox
Brent Owens, Vertiv
Charles Milton, Censornet
Greg Jones, Datto, a Kaseya Company
Matt Harris, HPE
Lana King, Mitel
Kirk Horton, Netacea
Michael O’Hara, Data Solutions
Neil Patel, D-Link
Penny Madsen, IDC
Sander Groot, Juniper Networks
Sean Collins, Extreme Networks
See the slideshow above for Channel Futures’ 2023 EMEA channel predictions.
Dropbox’s Tim Britt
Extreme Networks’ Sean Collins
Juniper Networks’ Sander Groot
HPE’s Matt Harris
Netacea’s Kirk Horton
Datto’s Greg Jones
Mitel’s Lana King
IDC’s Penny Madsen
Censornet’s Charles Milton
DataSolutions’ Michael O’Hara
Vertiv’s Brent Owens
D-Link’s Neil Patel
Want to contact the author directly about this story? Have ideas for a follow-up article? Email Christine Horton or connect with her on LinkedIn. |
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