Circa 2019 has been an exciting year for the IT channel with more companies embarking on digital transformation journeys and looking for greater ‘value’ in every technology product they buy. The time is now for the channel to shift from simple value-added reselling towards technology integration and providing management consulting. As we head into a new year, all signs point toward more disruption among existing channel programs, which also means increased opportunities for partners and customers.
Here are the top five channel trends of 2020 for channel partners to keep a watchful eye on.
- Shift from ‘turnkey solutions’ to ‘ecosystem’
The turnkey solution approach worked well for customers, the channel and vendors for decades; but it is out of sync with a hybrid world focused on a continuous path towards ever-greater levels of digital business capabilities. Anurag Agrawal, Founder and CEO of Techaisle, said, “In recent months, we see customers are clearly choosing to move from turnkey systems to hybrid environments that can be aligned with their evolving needs; this will also require an accelerated frequency of partner-to-partner collaboration.”
He believes, in 2020, business users may not want to stick to static systems that manage defined tasks or processes – and instead focus on approaches that allow for incremental deployment of new capabilities that increase reach and efficiency. To address unique and evolving customer needs, channel partners will need to change their approach. They will need to understand business objectives and the ways that technology can support them, and will need to keep pace with changing customer expectations by identifying and deploying new incremental solutions that can be integrated within current environments.
- Tech Consolidation to impact channel
This year saw some of the biggest acquisition in the enterprise technology space, and resulted in the consolidation of channel-focused IT firms. For example, CRM leader Salesforce announced a $15.7 billion acquisition of data visualization leader Tableau. Google acquires business intelligence major Looker. Hewlett Packard Enterprise acquired Cray at $1.3 billion. The $34 billion IBM-Red Hat deal also closed stating independent partner programs of the two vendors. Many of these acquisitions have left channel partners puzzled on how they can make money out of the deal.
Experts foresee this trend to continue in 2020, owing to their vendors M&A strategies, and channel partners may have to find a clear strategy to adapt to their growing needs – by expanding market reach, bringing new products and innovative go-to-market at the breakneck speed as a survival strategy
- Greater focus on Value as a Service
In the crowded SaaS market, ‘value’ will be the biggest differentiation that distinguishes the competition in recent months. For example, IT companies would want to work with cloud providers who understand their challenges and can quantify their needs. “The biggest success will be seen by those partners that stand out, listen and align with their customers’ business goals,” Canalys chief analyst Alastair Edwards said.
As enterprises see the value-add in their channel and reseller partners, they will increase their investments in SaaS providers to support these programs. Partners are realizing that the increasing complexity of enterprise IT operations also presents more opportunities for them. The strongest value-add for partners will continue to be through software solutions, such as unified communications and collaboration solutions, he said.
- Cloud investment to increase
The number of midsized companies converting to the cloud will continue to grow dramatically as we head into 2020. The move to cloud is a question of when, not if. Today’s technology disruptions mandate a clear shift towards the cloud model, irrespective of the criticality of the application.
Veera Swamy Arava, CEO and Director at SAT Infotech said, “Cloud is going to be instrumental in shaping businesses and offers ample opportunities to the solution providers.” He added that ERP in the cloud will see maximum growth as it offers faster time to value, increased innovation, and scalability with the business. Greater adoption of cloud platforms will also spur reliance on their channel partners to support cloud integration which in turn can result into greater profit.
- Time to disrupt and be disrupted
The channel is aware that digital disruption is already underway, with customers adopting disruptive technologies like AI, cloud and IoT, more aggressively than ever, and the only way to be in business is to disrupt oneself. Experts believe, that time has actually arrived. In 2020, partners will look for new ways of doing business–moving to the cloud, consumption-based pricing, everything-as-a-service, IoT partnerships and more new paradigms of doing business to remain profitable.
Channel-focused companies who do not embrace disruption now will find survival difficult in the coming months, believes Amarish Karnik, Channel Director, India and SAARC at Veeam. “That leaves the channel looking at what it will take to reinvent them to meet changing customer requirements,” he said.
For some, this will mean a whole-hearted adoption of digital technologies. For others, it will mean partnering closely with other companies who can handle the disruption for them while or face the prospect of an M&A to gain the scale and market share.