Despite everything, 2020 turned out to be a pretty good year for the channel. But what does the future hold for channel businesses in 2021? Is it more of the same or something better?
According to Adam Simon, managing director at Context, next year is set to be much the same for the first half of the year. “2021 will be known as the year of digital acceleration as the impact of the Covid-19 crisis drives companies and individuals to invest in transformation projects they have been delaying,” he says.
The types of businesses to prosper will be those that are agile in their markets and creative in retaining employees, he adds. “Businesses that can develop their own solutions and intellectual property and those that are adaptable will not only survive, but prosper, as we’ve seen across Europe with the huge spike in resellers starting to sell cloud jump from 44% to 70%,” he says.
Alex Tatham, managing director at Westcoast, agrees that 2020 went well for most channel businesses. “The speed and flexibility shown by the channel has proved its key strength – and habits are hard to break, so there will be no going back. I predict channel sales as a proportion of overall business will continue to accelerate,” he says.
He singles out “agile resellers and distributors” as the type of channel businesses that will prosper in 2021. “They always have. The pandemic has proved that agility is a core skill and that those that have it have prospered. Those businesses – suppliers, distributors and resellers – that do what they always did, will get what they always got. Change and dynamism is the way forward for 2021,” he adds.
Dan Waters, UK country manager for Arrow’s enterprise computing solutions business, observes that demand will continue to be strong “for the software, cloud and security solutions needed to enable remote working. We have seen this from the market’s ongoing shift to the hybrid and multi-cloud marketplace that use our platforms such as ArrowSphere”.
Johannes Kamleitner, vice-president of global channel sales at SolarWinds MSP, believes 2021 “is set to be another pivotal year for the channel”. Many managed service providers (MSPs) played a key role in helping customers move to remote working, migrate business processes to the cloud and combat rising security threats.
Alex Tatham, Westcoast
“The agility, proactivity and support they provided shifted the perception of MSPs. Overnight, the pandemic reinforced that MSPs are integral strategic partners for their clients as extensions of business continuity teams, rather than merely ‘third-party service providers’,” he says.
This year they will focus on “sustaining the digital transformation trajectory for clients”. One of the key opportunities will be cyber security. With so many employees working from home, it has become an even bigger issue than before.
“Once hybrid working is in full swing, with people using their homes, coffee shops and restaurants, as well as their own office spaces, security will become even more paramount,” says Kamleitner. “It will be primarily about data protection and how to keep data secure amid this new hybrid world.”
Adapting with services
Simon Aldous, global head of channel at Dropbox, believes 2021 “could be an uncertain time for many” given the backdrop of Covid-19.
“Businesses will be debating whether they go back to the office and, if not, what work will look like. There’s going to be a knock-on impact for the channel, so providers that don’t adapt to a service-first approach could struggle,” he claims.
James Pittick, partner channel director at Canon UK, agrees that partners that provide as-a-service-type offerings will be appealing as businesses seek flexible arrangements that their old models may not support.
“Those that truly understand how to support a flexible working environment will see the most opportunity. As the working landscape changes in a seismic way, the channel needs to be adaptive and understand what customers’ concerns might be – and then provide the right solution.”
Kevin Bland, Red Hat director of partners and alliances for UK and Ireland, says: “Business re-engineering is 2021’s big opportunity. With 2020 forcing a change in the way we work, we’re going to see things increasingly delivered as a service, which means there’s going to be scope for the channel to help customers re-think the way they do business and how to deliver value to users.”
He identifies self-service and automation as the customer trends drive as-a-service models. “The accompanying challenge for the channel is making the most of this opportunity and helping customers deliver the solutions they want,” Bland adds.
John Morrison, senior vice-president of international markets at Extreme Networks, believes the as-a-service theme will be taken up at the networking level as well. “2021 will be the year where many companies start to move away from investing in physical network infrastructure and instead consider outsourcing some, or all, network operations and management by committing to the network-as-a-service model,” he states.
Using tech to solve business problems
Stuart Taylor, channel director for Western Europe at Palo Alto Networks, predicts demand for automation and machine learning will be fuelled by the cyber security skills gap.
In addition, businesses will have far more to secure if they undergo more digital transformation, migrate to the cloud, take advantage of next-generation software-defined wide-area network (SD-WAN) capabilities, or add internet of things (IoT) devices.
“There are many legacy cyber security products out there that are no longer fit for purpose,” he warns, adding that channel partners are in a strong position “to advise on what technologies, solutions and services customers need and what they need to protect against”.
Describing 2020 as an experiment that was forced on the world, WatchGuard’s Northern Europe regional vice-president, Jonathan Whitley, says he expects the success stories of this year “to disproportionately include channel partners who are able to cater for subscription and consumption-based billing”.
Rick Ribas, vice-president for global channels at LogMeIn, believes that one of the unexpected benefits of Covid-19 has been a global increase in channel business as organisations worldwide rapidly looked to change the way they conducted business.
“The channel is an interesting ecosystem. When things are bad globally, it still thrives helping clients become more efficient. When things are good, it is rewarded with increased demand for their services,” he adds.
Stevie Dennis, UK and Ireland regional alliances manager at Okta, predicts 2021 will be “an even better year” for the channel. She suggests success will be determined by how well partners are able to build relationships remotely, noting that partners are increasingly developing relationships without face-to-face contact.
“Moving into 2021, the channel will continue to invest in these partnerships to help clients drive transformation and solve business issues with technology”
Scott Murphy, Ingram Micro
“The working relationships our partners have spent years nurturing are vital for our joint success. With the shift to working from home, building new ones has been challenging,” she says.
Michael O’Hara, managing director at DataSolutions, predicts strong growth in technologies associated with improving and securing remote connections. Technologies such as SD-WAN will see exponential growth. Business continuity “will continue to be key” and businesses will need to show agility. The move to cloud is set to continue at a pace.
He speculates that budgets set aside to pay for renewals or on-premise solutions could be used to assist businesses to move to the cloud. “This represents a challenge and an opportunity for resellers in that they need to be able to follow where the investments in technologies will be in 2021 and offer appropriate solutions to their corporate customers,” he adds.
Scott Murphy, UK and Ireland director of cloud and advanced solutions at Ingram Micro, says the channel demonstrated its ability to quickly design and implement solutions to help business last year.
Many channel businesses that didn’t have the skills required partnered with organisations such as Ingram “to support them in solving customer demands or requirements through leveraging skills and services”, says Murphy.
“Moving into 2021, the channel will continue to invest in these partnerships to help clients drive transformation and solve business issues with technology,” he adds.
Accelerating digital transformation
Karl Roe, vice-president for digital transformation and customer success at Nuvias, isn’t quite so bullish. He warns that the channel will have to prepare for tighter budgets as businesses delay run rate business to ensure large transformation projects are given priority, due to uncertainty caused by Covid-19.
As a consequence, he says, managed services that accelerate transformation will be a considerable area of focus in 2021 as customers look to sharpen the efficiency of their existing systems.
At Exertis Group, business intelligence manager Jonathan Wagstaff highlights the expectation that enterprise spending will pick up again in 2021 “as postponed projects start to restart”.
He agrees with Roe that the acceleration of digital transformation will continue, adding that the channel has a critical role. “The largest organisations will likely be further down the road of cloud migration. However, SMEs [small and medium-sized enterprises] are still going to need the channel, particularly in countries where cloud adoption is lagging,” he says.
He sees digital transformation and automation as “huge opportunities, alongside the growth of edge solutions which will support the expected IoT systems, vehicles and devices dependent on them. Unlike centralised cloud provision, edge needs the channel to push out, rather than pull back in, so to speak.”
“In 2021, we’ll see many of the structural changes and hybrid trends that were turbocharged in 2020 solidify, presenting opportunity for the channel”
Rob Tomlin, Dell Technologies
Rob Tomlin, vice-president and general manager for UK channel and distribution at Dell Technologies, describes technology as “the bedrock for how people, businesses and society” reacted in a year of uncertainty. “In 2021, we’ll see many of the structural changes and hybrid trends that were turbocharged in 2020 solidify, presenting opportunity for the channel,” he says.
The channel can help customers “boost remote working and build agility into their business models to drive consistency and growth” by focusing on building trusted adviser relationships. “I also think we’ll continue to see the focus on operational resilience and agility translate into a greater focus on hybrid cloud,” he adds.
“The hybrid cloud approach mirrors the increasingly hybrid nature of work and reflects the way organisations will expect to consume IT, much in the way they’ve consumed public cloud services.
“They will want solutions that can be ordered and scaled with a few clicks, providing more options and less complexity. The channel will need to continue to adapt to this as-a-service approach to help customers make simpler and faster decisions that support their IT demands,” he says.
Gavin Jones, director of channel at BT Wholesale, agrees that customers will be looking to adopt technologies “which support the accelerated digital transformation we’ve seen over the past few months”.
“Partners need to offer solutions that support remote work styles, such as cloud solutions, collaboration software and virtualised network systems, alongside strengthened connectivity. The types of businesses that will likely prosper are those that will lean into emerging tech and favour more mobile ways of working for employees,” he says.
Chris Martin, Europe, Middle East and Africa (EMEA) channel leader at A10 Networks, focuses on cloud migration, addressing network security concerns, IoT proliferation and a lack of agility and visibility throughout the IT infrastructure as core issues for this year. “The adoption of 5G will see the scope of partnerships change and adapt as it brings innovation and access to new revenue streams,” he adds.
There will also be significant growth opportunities in vertical sectors going forward, so vendors will focus on partners with specialist skills in those areas.
Richard Wyn Griffith, managing director at Softcat UK, admits it is difficult to predict anything in 2021 because “things are changing on a daily basis”. The end of government financial help to businesses could lead to redundancies and some businesses (and their customers) going under. He points to three main areas of priority for Softcat: security, digital workplace and hybrid infrastructure in the cloud.
“The challenges we faced for most of 2020 will remain for some time,” he says. “But adversity is always an opportunity. I’m optimistic of a return to some version of normality in 2021.”
Richard Wyn Griffith, Softcat UK
Matthieu Brignone, EMEA vice-president of channel at Pure Storage, agrees. “It’s difficult to predict what the next 12 months could look like as the business landscape changes every week, so stable growth will be reliant on creativity, strong customer relationships and being business savvy,” he says.
“The predominant business objective is to reduce unnecessary costs and evolve operations to make them as efficient as possible. Increasingly, this extends to a company’s IT estate where high-cost assets that do not deliver enough return on investment can be seen as an indulgence.”
Nick Sacke, head of IoT and products at Comms365, predicts Covid-19 will continue to affect business operations and workforces for some time. “Acceleration of digitisation for all UK businesses will continue at a fierce and sustained pace as organisations adjust to the new landscape. The channel will need to continually adapt its knowledge, expertise and offerings to support their clients’ operational and communication requirements,” he says.
The prospect of repeated lockdowns could affect the financial health of channel businesses and lead to “more consolidation of smaller players who do not have the financial liquidity and strength to absorb delays and interruptions to cash flow”, he adds.
Keith Jackson, channel sales director at 8x8, says the onus will change as businesses move from quick fixes to permanent solutions. “While digital transformation has accelerated, this was driven by necessity, rather than careful planning,” he says. “For those in the channel, that means taking on the role of the trusted adviser and being able to simplify complex challenges into impactful solutions for their clients to remain competitive.”
Distribution is king
As for distribution, the consensus is that it will continue to play a very important role this year.
Lee Fletcher, UK and Ireland channel manager at Snom, describes distribution as vital in any industry. “Without it, how do you get your product out to the wider market? Take Amazon, for example – when you want a product for your home or your office, you don’t think of the vendor who makes it, you think of the distributor or reseller that sells it to you.”
James Mundel, channel chief at Quantum, agrees, but warns that similar to resellers who are transactional, distributors who are transactional will lose. “Distributors who integrate, automate and streamline the procurement process will add the most value to resellers and vendors alike,” he says.
“Distributors help vendors scale via coverage and credit facility, but they will need to continue to add value in other ways including reseller recruitment, enablement, management, demand generation, logistics and technical support.”
Tatham at Westcoast doesn’t hold back, claiming distribution will be bigger than ever. “Brexit will be best handled by distribution assisting customers with imports and exports to and from Ireland. Distribution will hold stock allowing flexibility for customers and assist with removing many different types of costs for resellers, vendors and retailers”, he adds.
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