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An Expanding Channel

Added to IoTplaybook or last updated on: 03/28/2019

The speed at which digital technology is advancing hasn’t escaped anyone. But what many integrators overlook is the remarkable opportunity that lies in emerging tech. Indeed, a recent study conducted by trade organization CompTIA finds that demand for solutions using AI, blockchain, 3D manufacturing, the IoT, drones, robotics, and virtual/augmented reality is skyrocketing.

Consider: 72 percent of executives at the 400 U.S. IT businesses CompTIA surveyed say that customer demand is their primary motivation for offering emerging technologies. “More and more customers are getting ahead of the curve and proactively seeking out new technology solutions to help their business,” noted Carolyn April, senior director for industry analysis at CompTIA, in a press statement about the report.

Make no mistake, these emerging technologies represent a significant revenue opportunity. Survey respondents say that the top prospects include IoT software (cited by 48 percent of companies), IoT hardware (47 percent), artificial intelligence (42 percent), virtual reality (37 percent), and blockchain (34 percent).

There are a couple of key takeaways. First, the cloud is driving adoption of many of these emerging technologies. “For years, the cloud was a lightning rod for the channel, with some firms loving it and others hating it. These firms have finally accepted the cloud as the fundamental enabling infrastructure for IT and have decided to use the cloud to their advantage,” April said.

Second, virtually all of these emerging technologies intersect with the IoT in some way. For example, augmented reality and virtual reality require sensors on systems and devices, specialized software, head-mounted displays, glasses, or apps on smartphones to display the appropriate information.

The competitive field has expanded with the emergence of a whole new segment of players. These include cloud-based independent software vendors, along with software-as-a-service resellers and referral partners. Digital marketing agencies and companies from the professional services industry, such as law firms and accounting firms, are also entering the picture. In fact, the report finds that about 2 in 10 channel firms are now competing with nontechnology companies.

That trend has enormous ramifications for IT service firms. “Whether or not these newer folks identify as channel or not, they are essentially performing the same function as many traditional channel partners,” April remarked. This change, CompTIA notes, introduces new competitors but also opportunities for new business partnerships. “The complexity and range of things that are going on in technology today makes it almost impossible for one outfit to be able do to it all,” she added. “The importance of partnering across different types of solution providers is going to become even more important.”

These changes signal the early stages of a massive reorganization of the channel. Smart leaders will recognize that as the battle lines blur and move, they must react accordingly. There’s a need for new skills and knowledge, new partnerships, new ways of buying and assembling systems, and in some cases, a need to explore mergers and acquisitions. Notes CompTIA: “As vertical and application specialization proliferates, channel firms more steeped in horizontal infrastructure are seeing an upside to filling a gap in their portfolio by partnering vs. hiring.”

The message for channel pros and systems integrators? Traditional resellers must adapt.

 

Samuel Greengard is a business and technology writer based in West Linn, Ore. He is the author of The Internet of Things (MIT Press, 2015).