Never mind the buzzwords: How the landscape looks to resellers

By now you should all be busy filling in the latest channel survey, but it’s worth casting your eye over the results from our last channel survey, conducted at the back end of last year. It showed that resellers were increasingly getting out of their boxes - and not just because it was Christmas.

The results covered a range of companies and technologies, representing a good swathe of the reseller market as a whole.

But two themes jumped out at this writer. Firstly, in many ways, today’s channel looks very similar to the channel 10, even 15 years ago. Second, the channel itself expects things to have changed massively in the next two years.

This might appear contradictory, but that’s always been part of the fun in the channel.

So let’s take a closer look. On the first point, almost 90 per cent of respondents listed software as somewhat or very important to their business in terms of revenue, with around 45 per cent feeling it’s “very important”. When it came to hardware, around three quarters listed it as very or somewhat important, with a smidgeon over 40 per saying tin was “very important”.

Software and hardware, the twin pillars on which IT, and many channel fortunes, are built on. It’s almost as if the last 15 years never happened. But looking ahead two years, the proportion of respondents expecting software to be “very important” to their business dropped to just over 30 per cent, while just barely 10 per cent expect hardware to be very important. Vendors are forever positing paradigm shifts, but now it seems the channel actually expects one to happen.

Three guesses what might have supplanted software and hardware as “very important” to resellers’ revenue.

Here’s a few pointers. Hosting services are expected to skyrocket in importance, with less than a fifth of respondents thinking they will be “less important” in two years. Around 45 per cent expect hosting services to be “very important”. Managed services will also ramp up in importance. This is hardly a surprise. Vendors themselves have been banging the drum for cloud, SaaS, etc, for years. But it’s fair to assume channel practitioners are a sceptical bunch, and tend to discount vendor buzz words. They prefer to let their customers and the P&L do the talking. If they’re expecting this change, we’d assume it’s because it’s what their customers are telling them to prepare for.

It’s not immediately clear how this will affect resellers’ finances. According to our respondents, 2011 generally showed growth on the previous year, but 2010 was a year of stabilisation so that’s not a big surprise. The outlook for 2012 was seen as quite rosy: 67 per cent expected some degree of growth, with just under a quarter thinking this will be significant growth. Around a fifth expected things to stay the same. Only around 14 per cent expected business to slip this year.

But overall business expectations are just part of the story. Drilling down into channel players views’ on specific product areas, shows PC software becoming progressively less important, and the number expecting PC hardware to remain very important to their business slipping under 10 per cent. In their place comes a range of infrastructure technologies, while security and networking also increase in important.

Virtualisation and consolidation is already driving customer demand, while all those buzz words we’ve been hearing about, Big Data, BI, Saas, web-based productivity, will become more important, those surveyed predicted.

With that expected change, it’s worth considering how resellers are likely to see the vendor landscape. It should be no surprise that when it comes to software, Microsoft dominates, attracting plaudits as well as grumbles - though resellers tend to be happier when punting its server software than its PC packages. Microsoft also made inroads in security software, though Cisco remains the key vendor thanks to its networking dominance.

In PC hardware, HP dominated the field, though again there are grumbles while Apple has become a vendor that is difficult to ignore. HP dominated server hardare too, although this is under attack from new entrant Cisco which has made big inroads so far with UCS.

Things are more diverse in storage and networking, though competition may be expected because of the shifts detailed above. So there you have, the state of play for the channel as it crept into 2012. You may recognise the outlines of this picture, or you may be thinking your competitors’ biggest business expense is rose coloured spectacles.®