Tech Advisors Saw Big Cloud, Security Growth in Q2

Cybersecurity is picking up traction in a big way for technology advisors (agents), according to a recent survey from Channel Futures.

Channel Futures in its Q2 Market Outlook survey of 67 tech advisors (TAs) found ample sales growth from partners in the categories of security and cloud infrastructure. Other technologies, including connectivity, also grew in sales more than they decreased, but security and cloud scored the two largest overall increases.

Forty-six percent of responding TAs said they increased their security revenue year-over-year in Q2. Moreover, 14% said this was an increase of more than 10%, the highest such increase of any tech category.

Next came cloud infrastructure, where 42% of partners saw revenue growth.

Q. How did your revenue in Q2 2024 compare with Q2 2023 in the following areas?

However, growth in those two categories did not appear to come at the expense of other technologies. WAN/connectivity, in particular, grew in revenue for 38% of partners, although most of these partners saw singe-digit growth. Data center colocation registered the lowest percentage of partners who increased their revenue at 21%, but the increase still outweighed the decrease (6%).

Contact Center Least Penetrated

Some technology advisors and tech services distributors (TSDs) who partner with them have shared their ambitions for the contact center as a service (CCaaS) and customer experience (CX) market, and many of them have already landed significant enterprise deals. To that end, 11% of partners said they saw a significant increase in CCaaS/CX, and another 25% saw a moderate increase.

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However, 30% of respondents said they do not offer CCaaS or CX. That outweighs the other technologies in terms of non-participation. On the other hand, only 14% of partners said they don't sell cybersecurity.

Jacqueline Catala, principal partner and senior consultant at Forge Technology Advisors, entered the advisory space with experience in contact center. She said the complexity of the technology has created a barrier for some partners to enter.

Forge's Jacqueline Catala

"Contact center is, in my opinion, one of the most difficult areas for a TA to work in because contact center is incredibly broad, spanning many technologies across multiple areas of the client’s business. Unless the TA has a deep knowledge of the various components of contact center, how they work, and how each component can help achieve business goals, the technology advisor will not be able to advise and guide the client," Catala told Channel Futures. "Understanding contact center requires significant learning or hiring (however you solve the knowledge gap) so it is often easier to focus on technology areas that are less broad and easier to understand."

Related:Avant Looks Beyond CCaaS with CX Effect Acquisition

Retention and Account Management

Advisors quarter after quarter list "customer inaction and inertia" as their number one challenge, and hey did so again in Q2. Partners have pointed to increasing levels of red tape and stakeholders at the purchasing level, especially as companies factor AI more into their tech roadmaps.

The next biggest challenge was customer retention and account management.

Client management and retention appears to be popping up on the radar of more and more advisors. Some partners attribute to the shift to agents adopting technologies with less time before renewal. Gone for many is the practice of selling to a customer and walking away. Nevertheless, tech advisors must stay proactive to stay front and center with their customers.

"I agree that customer retention is tough," Catala told Channel Futures. "TAs usually have an audience with the C-levels at the beginning of projects, and then as the project proceeds into the day-to-day the relationship at the executive level can get lost. We are actively implementing quarterly business reviews to keep executives engaged and move sideways to other projects."

Related:New Intelisys President Makes Big Plans, Bullish for TSD's Future

Account management moreover plays into cross-selling, which continues to be a popular topic in the channel. "Cross-sell and upsell with existing customers" was the top cited go-to-market enhancement TAs are making, according to the Q2 survey.

Direct Contracts on the Rise

Respondents each quarter list how their business with different tech services distributors (TSDs) is changing. This quarter, Channel Futures added "direct agreements" to the mix. As partners evolve their tech stack to add different vendors in security, SaaS, AI and CX, some of them have elected to forge agreements with suppliers that do not exist in the TSD line card. Twenty-one percent of partners said their customer bookings through direct vendor agreements increased in Q2 year-over-year.

In terms of TSDs, the results show 21% of partners increasing their business with Intelisys. Sandler Partners also saw 21% of respondents increase their business with it. And multiple TSDs reported a double-digit increase in partners doing business with them.

Q. How did your number of bookings/accounts in Q2 2024 compare to Q2 2023 for the following companies?

Source: Channel Futures