CompTIA State of Channel Study: Optimism Still Reigns

There’s been a lot of discussion over the past few years about the relevancy of the channel as market disruptors assail the IT solutions space. But that doesn’t seem to be affecting the outlook of the channel as a whole, according to research from CompTIA.

The IT industry association presented some of the results of its fifth "State of the Channel Study" at Channel Directions Live! this week in Tampa. Seth Robinson, senior director, Technology Analysis, and Carolyn April, senior director, Industry Analysis, offered some insights of the study during a discussion titled, “What It All Means.”

“The times we are living in are changing. Technology is changing. So what does it mean to sell and support the new stuff vs. the old stuff?,” Robinson said. “It means we’re having bigger conversations, not just about technology, and IT has moved into a higher-level discussion—we’ve got this new technology and people are using it in different ways, so what can we do with that?”

It also means approaching IT from a more holistic point of view, April noted. “Start thinking holistically when you’re having the discussion with decision-makers. It’s all interrelated. You’re not just selling a mobility solution—you’re selling all the other things along with it, such as wireless.”

According to the study, the channel still is pleased with its collective lot in life, with 61 percent generally optimistic about their prospects. Twenty-two percent have mixed feelings about the future, and 14 percent generally pessimistic. Three percent don’t know one way or another (which leads me to wonder whether those folks are paying attention).

And it seems the smaller and younger your company is, the more morose you are: According to the study, small channel firms (those with 10-99 employees and younger channel firms (those younger than 5 years old) are slightly more pessimistic.

But while many have foretold the death of product sales in the channel, it’s still a major revenue driver, the study noted.  Solution providers reported consulting services as the top way they earn revenue (48 percent), followed by project-based work (46 percent) and margin on product sales (43 percent). Recurring revenue was low on the list at 36 percent.

“That shows we talk a good game about getting into recurring revenue but we’re not there yet,” April noted.

“Product sales will continue to be important,” Robinson added. “A company can’t go productless. Clearly, having a mix where can provide devices, products and integration is the way to be.”

So what is the area of brightest opportunity for the channel? It continues to be security, according to the study. And that makes sense: As the increase in mobility and number of endpoints only enhances the need for effective security.

“Security is wrapped around everything,” April said. “If you’re not wrapping security around everything you’re selling, you’re missing out and you’re doing your customers a disservice.”

The study also covered the managed services market, as well as IT procurement habits of end users and reasons for the successes/failures of vendor partner programs. The entire study is slated to be available from CompTIA in a few weeks.