TD SYNNEX: Security and services driving growth

Distributor shares research that shines a light on the current state of the European channel

The channel is continuing to focus on services and looking to ensure it has strong sustainability as it looks ahead.

Inaugural research from distributor TD SYNNEX has found that almost three-quarters of partners quizzed across Europe expect to sell more managed services in the next three years.

With pressure rising to have a story around environmental, social and governance (ESG), the distie found that 40% were also looking to offer sustainability/ESG reporting within the next two years.

The immediate concerns for channel partners that took part in the benchmark survey, carried out by Canalys, was to make sure they were meeting end-user technology expectations, managing technology ecosystems, and technology ecosystem engagement, enrichment and enablement.

Plenty of recent headlines have been spreading doom and gloom about inflation, war and the cost-of-living crisis, but even through that, the channel has maintained an optimistic tone. That was echoed in the TD SYNNEX research, with 82% of European partners expecting to report growth this fiscal year, and 43% pointing to security, servers and storage as the top revenue-generating areas.

Security was ranked the most profitable technology for the channel to be selling, as rated by the European partners. Services of all kinds (see box below) are also expected to grow. Hardware also remains a revenue driver and is often key to unlocking further revenue streams.

Services are the new black

The survey found that all categories of services are projected to grow: 

  • Managed services by 74%
  • Professional services by 65%
  • Consumption-based XaaS by 50%
  • Packaged services by 44%
  • Product lifecycle services by 38%

Where the researchers felt there might be a missed opportunity was in the channel’s ability to cash in on growing interest in the metaverse. Billions of dollars are being pumped into this area and numerous headlines have been generated by firms wanting to position themselves as potential market leaders.

Despite that, only 17% of those partners questioned intend to get involved with augmented and virtual reality in the next couple of years.

“The TD SYNNEX Technology ecosystem benchmark report captures how the IT channel is anticipating, and responding to, innovations that are transforming the way we interact and consume,” said Patrick Zammit, president, Europe and Asia Pacific Japan at TD SYNNEX.

“By harnessing the potential of emerging trends, the channel will be well positioned to help accelerate the adoption of new technologies that will produce exponential advances in efficiency, connectivity and safety.”

Zammit added: “We are really encouraged to see European technology leaders put ESG capabilities on their roadmap.” He emphasised that this also mattered to the distributor and it had made net-zero carbon commitments.

The survey also found that more partners are increasing their own IP, with mor than one-third expecting it to grow as an activity in the next couple of years.

“Channel partners are actively developing their services businesses,” said Rachel Brindley, senior director, channels at Canalys. “We see that partners are looking to invest across the technology ecosystem.”

Read more on Sales and Customer Management