The IT channel has seen its fair share of troubled commentary in recent times.
The rapid recent changes which have enveloped the channel as part of the broader technology environment have forced it to take a painful look at its existing operations.
Pressures from cloud, increased competition, smaller margins, direct distribution and electronic software downloads have all forced the glacial winds of change to blow through the industry, and many prophets of doom have crowed about how the various channel intermediaries’ days are numbered.
Not so fast it seems.
In CRN.com’s article titled ‘There’s Never Been a Better Time To Invest In The Channel’, writer Steven Burke highlights how the IT Channel is attracting private equity funding, and lots of it. $26 billion in 2016 was enough to make even the most ardent negative commentators sit up and take notice. So why, if the channel is being squeezed from both ends, is it attracting so much investment?
According to Burke, it’s because private equity firms believe that it’s the best place to take advantage of the current growth in cloud services and security. Additionally, the channel is seen as being trusted, independent, and a major factor in driving digital transformation and customer demand for the ‘cloud services revolution’.
The channel is seen as being trusted, independent, and a major factor in driving digital transformation.
Vendors however, don’t always see it that way, with channel intermediaries and solution providers often being viewed as a necessary evil in getting product to customers and achieving market reach and penetration. Burke contends that vendors should view channel businesses as extensions of their own sales force instead, and the shortest route to driving digital transformation sales.
Some of the inherent advantages for channel companies is that outside investors see them as being able to pick and choose the best and most promising technologies and vendors to work with, effectively spreading their risk. They own relationships with both vendors and resellers and, being so entrenched in the channel, have access to recurring revenue as well as vertical market expertise and business knowledge.
Such significant private equity investment on the channel has resulted in increased channel business sophistication and more business expertise driving better results. This in turn feeds the channel in becoming stronger, promotes further growth, enables more business and technological maturity, and further entrenches distributor relationships between vendors and resellers.
Vendors thus need to change their channel-critical viewpoints, and move to building long-term relationships with channel intermediaries to take advantage of this increasing channel ‘firepower’, writes Burke.
By marrying digital new age systems thinking with an innovation mindset, ChannelCenter has created something truly new and exciting for channel businesses. And because the ChannelCenter platform enables automated and increased business efficiencies both within and between channel intermediaries, it effectively aggregates technologies and facilitates cross-channel tech pollination.
The ChannelCenter platform improves buying efficiencies and enables cross- and up-sell.
ChannelCenter also facilitates channel businesses in having access to different technologies and services like never before. Real-time dashboards and analytics empower platform users to view their key business metrics at-a-glance, whilst improving buying efficiencies and enabling cross-and-up-sell.
It all ties into our vision – to fundamentally improve the way the IT channel conducts business operations, by increasing efficiency throughout the process via innovative digital thinking. It’s gratifying to see that we’re not the only ones investing in the channel – as evidenced by $26 billion in private equity investment last year.