Today, I attended Everything Channel’s 2010 State of the Market presentation, a great annual scorecard on the state of technology solutions provider channels. The typical survey respondent books about $3.5 million in annual revenues, in b-2-b transactions (no retail data here) so it’s a real-world look at issues facing technology solutions providers across many vertical markets.
– upward trend of professional services as a total % of earnings, now sitting at 54%. It is through specialized services that Solutions Providers can differentiate themselves, whether in vertical sectors or via enterprise-vs.-government customer bases. Margins are great, and it’s the truest unique value proposition a channel provider can pitch
– highest growth trends are among small customers. Annual revenue per client is lower and there is risk in extending terms, but solutions providers enjoy faster sales cycles, loyalty and willingness to innovate
– customers seek solutions that reduce costs, cut budgets and streamline processes. That’s where those professional services come into play!
– SaaS and cloud computing affect overall service revenue more than anything. Many small businesses may resist outsourcing data storage and software licensing, but the ROI is too hard to ignore
– not surprisingly, storage and security lead the pack of most-sought after solutions.
Also, seems that alliance-driven marketing is edging out MDF- and coop-funded programs in importance. Solutions Providers in the channel who join programs offered by Cisco, HP, Oracle, RSA and others perceive themselves as being closer to the decision maker. I have personally found alliance programs to be a blessing and a curse for a small ISV or hardware manufacturer. Selling cycles of 18-24 months may be too little, too late for a startup and try the patience of the most supportive CEO. And, most of the selling effort is aimed at the alliance’s own decision makers, vs. at end-user customers.
I appreciate Everything Channel’s methodology because, in the most recent survey, they double-polled respondents after 6 months, as a reality check on hoped-for vs. actual. This has been especially valuable during the fallout over the past 18 months.
The annual State of the Market is a must for every solution provider and channel marketer who relies on SPs for their revenue. Since our leading tech companies now realize most of their revenue via channels, we all need to pay attention to trends. Learn more at Everything Channel’s website.