State of the Australian channel: stable vendor relations

The Australian channel remains upbeat despite numerous hurdles, according to a new study from CompTIA, which says the changing channel landscape presents a number of challenges around vendor partners, emerging technologies and business models.

"The research reveals a host of key trends that underscore the challenges and opportunities the channel is facing today, and attitudes about future prospects," explains Carolyn April, senior director, industry analysis, CompTIA.

"For the most part, however, we can report that the state of the channel is looking good.

According to the research, 52% of respondents are hopeful that the channel will fare well in the future. That compares with 61% of US channel firms that said they felt similarly. The remaining half of Australian respondents either had mixed feelings (28%), a pessimistic view of the future (14%) or didn't know (7%).

"For those firms that are pessimistic about the channel's future, the main reasons are concerns around general business challenges, new types of competitors in the field, IT skills gaps for emerging technologies, and cloud computing," notes Moheb Moses, director - Channel Dynamics, and ANZ Community director, CompTIA.

Moses says the change in the channel remains a mixed bag.

"Some channel firms will shift their business model entirely to managed services or cloud, while others will embrace the hybrid model, adding a services component alongside a product-based revenue stream.

"Still others, primarily veteran firms whose owners are nearing retirement, will maintain the status quo.

Growth expectations

Broken down by business model over the next two years, the numbers are fairly evenly across the three major options for growth:

• product sales (39%)
• one-off project engagements (43%)
• recurring revenue (42%)

 "It's likely that higher satisfaction with vendors may be in play here as greater access to partner program resources is helping with lead generation and closing deals," explains April.

Vendor-partner relations

The research reveals six in 10 channel firms called their vendor relationships stable.

"This means the mix of vendors they work with is likely to remain unchanged over the next two years," says April.

"However, some companies are looking at different options, with one-third describing their current approach to vendor relationships as exploratory in nature.

"While they expect to maintain current vendor ties, it is clear they are open to looking at new partners to work with," she says.

A small group (5%) reported relationships that are shifting in nature, meaning they have dropped a vendor partner in favour of another.

Karl Sice, Head of Staples Technology Solutions, adds, "It is an exciting period for the industry with the days of end-to-end multinational vendors covering all customer needs largely behind us.

"Business customers are smarter, better informed and better able to choose partners who can create value, disrupt process or generate cost savings. It is about understanding these dynamics and realising that the nearest and most potent competitor isn't the same one you had 10 years ago.