It’s always interesting to look at how technology service providers and resellers are conducting business in different geographic locations. What’s true in one location may not be true in another, and best practices, industry regulations and business drivers can vary from one place to the next. 

[easy-tweet tweet=”Seven in ten UK #channel firms report at least some degree of business transformation” hashtags=”cloud”]

CompTIA, a non-profit trade association with approximately 2,000 member companies, 3,000 academic and training partners, 65,000+ registered users and more than 2 million certifications issued, recently published their 5th Annual State of the Channel Report – and there were some interesting insights and takeaways specific to the UK market included. CompTIA Faculty and Managing Director Tracy Pound recently presented the results of this report at Continuum’s first, sold-out European Partner Day in February.

An abstract from CompTIA’s website reads: Seven in ten UK channel firms report at least some degree of business transformation taking place in their organisation. This suggests a highly dynamic environment, and there are many obstacles to overcome as channel firms seek new partnering arrangements, meet new customer needs and build new models around emerging technology.

The three key drivers of growth in managed IT services today include seeking out new partnerships, meeting new customer needs, and building new models to adapt to emerging technologies and solutions

This summary touches three key drivers of growth and evolution in managed IT services today that aren’t bound to any particular geography; seeking out new partnerships, meeting new customer needs, and building new models to adapt to emerging technologies and solutions. In looking at the UK specifically, however, here are some of the key takeaways and insights reported:

Channel revenue

When asked where channel revenue is coming from today, 46 per cent of firms claimed the majority is coming from existing customers, while 35 per cent reported it’s from a balance of both net new and existing customers. When looking to the future, however, the numbers begin to shift a bit. 41 per cent of organisations expect to see more revenue over the next two years come from net new customers, while 32 per cent expect more revenue from existing customers.

Vendor relationships

Looking at vendor relationships, 68 per cent of respondents were “mostly satisfied” and only 21 per cent reported being “very satisfied.” Interestingly, twice as many US-based respondents reported being “very satisfied” with vendor partner relationships. The report also explored top reasons to drop vendor partner programmes; responses included the cost of membership, low margins or minimal discounts/rebates, lack of marketing support and several others.

Is your vendor relationship healthy? Here are 10 red flags when evaluating or working with an IT management platform provider!

Hardware dependency

As cloud and virtual resources become increasingly accessible and widespread, MSPs are finding they no longer need to rely as heavily on hardware sales to achieve revenue goals. 38 per cent of UK firms identified hardware sales as “very important” (the distinction from the US here was also sizeable, where 55 per cent reported hardware sales as very important). Not surprisingly, cloud infrastructure was identified as the technology area with the highest-expected revenue growth.

What are other cloud trends to look out for? IT experts share their 2016 cloud computing forecast here!

As cloud and virtual resources become increasingly accessible and widespread, MSPs are finding they no longer need to rely as heavily on hardware sales to achieve revenue goals

The future of the UK channel

The report also contains some interesting insights and predictions regarding the future of the UK channel. 52 per cent of firms identified their opinion as being “generally optimistic”, and 35 per cent had “mixed feelings.” Respondents looked to opportunities such as cloud computing opening new doors, an increasing demand for managed services, and the fact that customers still want a local provider who acts as a trusted advisor.

Conversely, a skills gap for emerging and complex IT solutions, growing competition from new players like telecom providers and the notion that many aspects of IT are becoming easier to deploy and manage internally were reported as reasons to be pessimistic about the channel’s future in the UK.

[easy-tweet tweet=”46 per cent of firms claimed the majority of #channel revenue is coming from existing customers” hashtags=” cloud”]

CompTIA’s 5th Annual State of the Channel and UK State of the Channel reports are available for CompTIA premier members. To learn more about premier membership, click here.