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Developments in the market have tended to coalesce around various areas, which have been captured in this list.
The past 12 months have not been easy, but as this top 10 demonstrates, the channel continues to evolve, and it’s been another year of progress.
Here are the top 10 channel stories of 2023.
January started with the mantra being used to describe the perspective of customers working with partners. “In an environment that feels not too dissimilar to musical chairs – budgets reducing, fewer dollars to go around, but more mouths to feed – channel partners need to come up with something different to catch their customers’ attention,” said Shane Buckley, CEO of Gigamon.
There were clear risks of tightening budgets, with technical debt rising, and SoftwareOne, sharing research in February that highlighted the negative impact it was already having on customer digitisation plans.
The firm quizzed CIOs, with a sizeable number admitting efforts to drive down costs were causing them to fall behind in their digital transformation efforts. The issue continued to be a theme throughout the year, with Daisy sharing research in the summer that indicated customers were continuing to keep a firm eye on costs as inflation took its time to fall.
The launch of enhanced or fresh partner programmes is nothing new, but one major theme in 2023 was the effort by vendors to use them as a more effective way to reward and support their channel. The pack and plaque days have gone, to be replaced by more tailored programmes.
Back in January, IBM launched a fresh programme that would set the tone for many to follow, with the emphasis on not just rewarding those that delivered on its vision, but also making sure the deal registration and rebate processes were quicker and easier. Delivering an easy-to-use system would be credited by Hitachi Vantara’s channel chief as one of the reasons it bolstered revenues significantly over the year. Enablement would be another buzzword, with vendors taking the view that arming partners with more support was one of the most valuable things they could do.
“In 2024, partner programmes will no longer be underpinned by discounts, but instead will give way to comprehensive enablement strategies,” said Abdul Terry, manager of channel sales at Jamf, in mid-December.
As early as the first few days of January, the channel boss at Amazon Web Services (AWS) was talking about channel partners being critical to its strategy, and that message was repeated later in the year.
At the Canalys Channels Forum in October, the assertion was also made that the public cloud giants had recognised they needed solution providers, and as a result, would be further increasing their involvement with the channel. Alibaba Cloud was also keen to stress its commitment to working with partners.
However, innovations around cloud marketplaces would not be confined to hyperscalers, with distribution also actively improving reseller options, Westcon-Comstor cutting the ribbon on its PartnerCentral option and Arrow ECS continuing to add depth to ArrowSphere.
The hardware market came into 2023 after a bad performance in the second half of the prior year, and sales have been down by roughly 20% going through the year. But, even from the first of the grim quarterly updates from analyst houses, there was a view that things would get better.
Some of those predictions of improvement were premature, like Lenovo’s boss forecasting an improvement in the second half of the year. But as the curtain starts to come down on the fourth quarter, the predictions are that a PC refresh, the launch of enticing artificial intelligence (AI) products and improving economic conditions will make 2024 a better period.
It’s a feature of channel life, but numerous deals were sealed over the course of the year. Some of the most active M&A players included Babble, EvolveODM, Aptum, Abacus Group, Version 1, Epicor, BCN, Daisy, Apogee, Jigsaw24, iomart, Insight, Sapphire, NTT and FluidOne.
As well as consolidating, there were also signs of market expansion, with Swiss distributor ALSO deciding the time was right to pitch up in the UK. “An increasing number of customers have been asking us to have access to the full ALSO service and vendor portfolio,” said Gustavo Möller-Hergt, CEO of ALSO Holding. “This is why we have decided to enter the market with a local presence.”
German player Bechtle was also keen to extend its UK reach, and added Tangible Benefit in February to support that ambition.
David Terry, vice-president of IT channels at Schneider Electric Europe, summed up the approach many in the industry recognised needed to be taken. “Not one single person would do this on their own,” he said.
“Sustainability and reducing CO2 emissions across the channels that we have is a team sport. It’s the vendors, the manufacturers, distribution and its resellers. It’s the logistical services we use and it’s the recycling services. But it’s one of the biggest opportunities we have.”
There was plenty of doom and gloom because of the state of the economy, but across distribution and reseller tiers, executives were still prepared to talk of growth. The emphasis was on getting more share of wallet from existing customers and concentrating on reaching those market areas that were untapped.
Paul Eccleston, UK and Ireland managing director at Exclusive Networks, provided some insight into the attitude towards 2023 back in January. “I have got a lot of thoughts and ideas about how we can develop the business and keep the momentum going,” he said. “I think there’s a lot we can do in the next two to five years.”
Results from those listed channel players, the likes of Computacenter, Softcat and Bytes, along with numbers from distribution underlined channel resilience and the ability to find growth in difficult circumstances.
Vendors like to talk about how close they are to 100% of revenue coming via partners, but across the industry, the volume of business that went through the channel was a recurring theme. Canalys highlighted at various points across 2023 just how much business was being transacted by partners.
Back in January, the analyst indicated that the bulk of security sales were going through the channel. It then followed that up with the figure, shared at Canalys Channels Forum in October, that 70% of all IT spending went through the channel.
Jay McBain, chief analyst at Canalys, said the total addressable IT market was $4.7tn, a decent chunk of which went through, with or via partners. “Important to all of us, 73.1% of this entire pie goes to through and with partners,” he said. “If you add on partner assist, the number goes beyond 90%.”
IDC was also talking up the indirect model, expecting growth across Europe in 2023 and around a third of spending to go through partners.
Throughout the year, there were examples of customers sharing their worries about security and efforts by the channel to solve those challenges.
SMEs increased their investments on data protection to fend off growing threats, and ransomware remained a serious problem. Technologies including managed detection and response were some of the hot sellers, with customers keen to secure their environments.
Dell grabbed the headlines for its decision to go all-in with partners on the storage front, but there were others over the course of the year that also indicated they were going to do all of their business with the channel.
“With this announcement, over 99% of Dell’s customers and potential customers will be considered partner-first,” said Rob Tomlin, vice-president of UK channel at Dell Technologies. “Dell will be paying our sales reps more, which is the first time that’s ever happened, to sell storage through the channel.”
In addition, back in February, security players RailQuest and Gatewatcher were also looking to go 100% with the indirect model. Splunk also chose to turn to the channel when it launched its hardware device back in July. That was followed by SecureWorks talking of going all-in with the channel in September.