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Beyond cloud: growth of channel relies on talent

Hearing that channel firms are growing is welcome news for Billy MacInnes, who wonders just what is driving that success

This article can also be found in the Premium Editorial Download: MicroScope: MicroScope: January 2017:

I was intrigued by the latest research from Pulsant which found 97% of channel companies had experienced growth over the past 12 months. While I’m not disputing the overall findings, it does appear to me that the emphasis placed on the effects of the cloud on growth is interesting in its own right.

According to the Pulsant whitepaper, entitled Channel and the cloud: opportunities, challenges and what businesses really think, 104 IT resellers in different-sized organisations across various industries attributed their growth to four main factors: new talent (63%), incorporating software as a service (SaaS) or cloud into their product offering (47%), working with a cloud services provider and marketing initiatives (both 37%).

This is interesting because two of the growth factors cited are cloud-based. If true, this makes for an effective counterpoint to the arguments that the cloud represents a threat to the channel. These figures appear to demonstrate that, for many resellers, the cloud is already a driver for growth.

Chris Roberts, channel director at Pulsant, says the findings show the channel has been adapting to the changes brought by cloud and the level of growth reflected in the research is “a powerful indication of the strength of the market”.

The research also found that 96% of those surveyed believed their cloud opportunities had been realised and 90% of those surveyed were becoming cloud or SaaS providers. The difference between those figures suggests that, after realising their initial cloud opportunities, partners have been encouraged to take it a step further by becoming cloud or SaaS providers. This is where things could get interesting because the initial figures concerning the contribution of cloud to channel growth over the past 12 months point towards something that has been incremental to their existing business, rather than a replacement for it.

This makes me think that the cloud opportunities so many realised over the past year were incremental rather than disruptive to the business. That’s a good thing, but it will be fascinating to see what the figures will be like over the next couple of years as the vast majority of those surveyed make the transition to become SaaS or cloud providers.

Once they embark on that course, they will come up against some significant issues that could directly affect their businesses.

Some of them are identified in Pulsant’s research where those resellers shifting to become SaaS or cloud providers cited service delivery, adjusting to a new business model and difficulty in finding the right cloud provider.

In other words, once the shift to cloud starts to eat into their existing business, it could have much more widespread and disruptive consequences for their operations than it has to date. Resellers need to hope that vendors and distributors do enough over the intervening period to ensure that their transformation to SaaS or cloud providers becomes as smooth a process as possible. 

Finally, away from the cloud, it’s also worth noting that the resellers in the survey stated that the biggest contributor to their growth was new talent. Which just goes to show that, whatever the prevailing technology trend, the success of channel companies is still very much down to their people.

This was last published in December 2016

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