Are you ready for fundamental changes to how the channel works in 2014? A new report from CompTIA outlines the trends and makes recommendations for success for channel partners.
CompTIA Research Vice President Tim Herbert says the term "trusted advisor" needs to change with the times.
The global IT industry will see a growth rate of 3.4 percent in 2014, with upside potential of 5.9 percent. That's according to IT industry association CompTIA's "IT Industry Outlook 2014" report released this week, which also included a list of 2014 channel trends.
According to the study, the U.S. forecast calls for less robust growth than the global forecast -- 3 percent in the same year, with upside potential of 5.4 percent.
CompTIA Research Vice President Tim Herbert told Talkin' Cloud that "change isn’t an all-or-nothing proposition" for channel partners looking for ways to make adjustments to CompTIA's projections.
"In fact, creating a hybrid model of existing business operations -- product sales, for example -- that co-exist with a cloud or managed services practice is just as acceptable as moving everything lock, stock and barrel," he said.
IT companies plan to increase investments for staffing in 2014, the report stated, revealing that 41 percent of IT companies plan to increase technical positions this year. The study revealed that 32 percent of firms are expecting to increase non-technical positions.
Herbert said IT firms don't necessarily need to hire more non-technical positions, pointing to the fact that many channel firms are expected to "take on the worlds of mobility, big data, cloud and other innovations."
"This is especially important for the vast number of veteran channel firms that have been in business a long time providing basic networking, systems, security and break/fix services, but want to grow into new high profit margin sectors," he said.
IT services and software show the most growth potential in 2014, according to the CompTIA report. IT hardware is projected to grow at a slightly slower rate, partially due to more intense margin pressure, the study revealed.
"IT services often have the potential to command higher margins, customer 'stickiness' and add-on sales opportunities, making them attractive to IT firms, small and large," Herbert said.
While business operations are keeping software growth in the driver's seat, shifting to "lower-cost options and customers’ willingness to embrace open source software solutions" may limit software revenue growth, he said.
CompTIA said in its report that channel partners should pay attention to the following IT Channel Trends in 2014:
- When it comes to your channel business, it’s OK to stay in two lanes -- Investing in too many verticals can be dangerous for channel partners. Verticals require expertise and time. Before taking up a new vertical, it may be a good idea to understand the entire picture.
- Time to rebrand the "trusted advisor” -- Do channel partners need to rebrand the way they pitch their expertise to SMBs?
- Back to basics: reinvesting in technical expertise -- Should channel partners reinvest more in technical expertise? According to the study, some already are.
- Channel dynamics: partner or competitor? -- There are plenty of vendors out in today's market looking to work with the channel, but will they directly compete with channel partners in the market? Find out if vendors are looking to partner or become another competitor.
"Brand image needs to evolve with the times -- and with your customers," Herbert told Talkin' Cloud. "The consumerization of IT has upped the tech-savvy of today’s IT buyers like never before, especially younger demographics like the Millennials or certain lines of business executives who are looking for different qualities in a tech provider."
He added: "Some buyers today seek less for a 'trusted advisor' to guide and handle IT needs for them and more for a partner that will work collaboratively to create a great IT experience."
On the other hand, Herbert noted, not every buyer "is on the cutting edge -- or wants to be -- when it comes to technology," which is where the role of "trusted advisor" will come into play.
CompTIA’s IT Industry Outlook 2014 is the result of an online survey of 525 IT industry companies conducted in late December 2013.