What Will Drive Revenues For IT Channel In 2017

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The Channel Industry has matured in many ways over time. With new technologies emerging from every corner, IT channel has seen several twists and turns and learnt to adopt as per the demand and situation. Partners invariably play a major role when it comes to deploying new solutions and services.

Let’s see which new areas will bring revenue for the Channel this year.

Cloud will be Omnipresent
According to the new Worldwide Semiannual Public Cloud Services Spending Guide from International Data Corporation (IDC), worldwide spending on public cloud services will grow at a 19.4% compound annual growth rate (CAGR) — almost six times the rate of overall IT spending growth – from nearly $70 billion in 2015 to more than $141 billion in 2019. The new spending guide expands on IDC’s previous public cloud services forecasts by offering greater detail on industry and geographic spending levels.

This offers enormous opportunity for channel partners to deliver cloud to the business which seeks technological upgradation with cloud solutions. The shift will present the answer to modern business.

Software as a Service (SaaS) will remain the dominant cloud computing type, capturing more than two thirds of all public cloud spending through most of the forecast period. Worldwide spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will grow at a faster rate than SaaS with five-year CAGRs of 27.0% and 30.6%, respectively.
Channel partners will remodel themselves to carry a robust business case encapsulating new technology.

UCaaS is the way forward
Changing demand for UCaaS is coming from customers, which is creating a bubble-up effect in the channel. Organizations are initiating conversations with their trusted IT advisors (channel partners) about moving not just core data-driven applications, but also their business communications systems to the cloud. Increasingly, I hear customers say that going forward they will be “cloud first” and “cloud only” when it comes to all things IT. In 2017, we’ll begin to see an increase in this customer-to-partner demand behavior, which will ultimately drive new channel business models, states Zane Long in a recent blog.

Software market will churn big chunk of revenue 
India software revenue is forecast to total $5.8 billion in 2017, a 12.8 percent increase from 2016 estimates of $5.2 billion, according to Gartner Inc.

The computer software and hardware vertical had a foreign direct investment (FDI) inflow of $5.9 billion during the period from April 2015 to March 2016. This is an increase of nearly 150 percent, compared to the same period last year. Gartner expects these investments to gather further momentum toward the end of 2016. “Make in India” is set to boost the manufacturing sector, as well as make it easier to attract investment, and “Digital India” is focused on creating digital infrastructure, digital delivery of services and increased digital literacy.

“Emerging digital business strategies are changing enterprise organizations’ buying behaviors in India and accelerating the demand for technology innovations and outcome-based solutions”, said Bhavish Sood, research director at Gartner. “New ways of monetizing the value being delivered, such as revenue-sharing models, are also evolving.”
Thus, while carrying software solutions to the clients, partners also have to make it as easy as possible for clients to invest in solutions that are easy to deploy, use and manage.

SMBs: New profit ground for the Channel
report by CompTIA, the IT industry association, points out that SMBs place a high priority on technology; many firms want to increase their investment in technology, but have mixed feelings about the perceived ROI they get from technology. Despite a need and desire to embrace digital transformation, most SMBs lack the necessary vision and strategy.

Small and medium-sized businesses are more persuaded to use IT than ever before. However, they are not prepared to deal with complex modern day technology. This is turn creates an opportunity for the partners to understand their unique requirement and deliver.

There lie abundant opportunities for the channel, once they understand the SMB market. According to a NASSCOM- Frost and Sullivan report- The SMB market is seeing a CAGR of about 15 per cent Y-o-Y and this growth is expected to propel the IT spend to cross Rs. 100,000 crores (USD 18.5 billion) by FY2018. (Read full story here)

To achieve success, partners have to be agile and sidestep vendor lock-in when handholding SMB clients into the era of the SaaS.

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