CompTIA State Of The Channel Study: Dealing With Details, Drivers Of The Transition To A New Business Model
In its Fourth Annual State of the Channel study, CompTIA asked IT companies to describe the progress of their business transformation. Of the 350 companies surveyed, 24 percent assessed their transformation at a low degree, 55 percent said a moderate degree, and 22 percent said a high degree. Interestingly, in 2012, the responses were low degree, 17 percent; moderate, 59 percent; and high, 24 percent. It might seem like the channel isn’t as far along with business transformation now as it was two years ago.
Carolyn April, senior director of industry analysis for CompTIA, explains this is more likely a case of perception than progress. Companies are experiencing what is involved in adding services to a transactional, “break-fix” business model — and it’s more complicated than it appeared at the outset. “They’re realzing there are a lot of pieces (to a business transformation). They need to retrain sales teams and there are operational and financial changes …You can’t just flip — you won't have money to pay the bills,” April says.
She points out IT solutions providers — in many cases SMBs with mostly SMB customers — will probably operate under a hybrid business model: part break-fix and part recurring revenue. This means, among other things, developing a sales team that can sell both types of products — as well as developing a compensation plan for that team.
“That’s why we see a slight entrenchment in the numbers … so many details,” comments April.
The survey also reveals drivers forcing IT solutions providers to change their business model. Of those responding to the survey, 41 percent cite cloud computing pushing the channel in new directions, and 36 percent say it’s customer demand for different services and IT delivery models. “The way customers purchase technology is changing and customers have the leverage to purchase cloud services on their own,” April explains.
Other drivers are the desire to move to a recurring revenue model (35 percent), the perception that new financial models are more lucrative (32 percent), vendors pushing solutions providers to change (27 percent), declining margins on product sales (27 percent), and making a defensive move against obsolescence (23 percent).
As CompTIA surveys IT solutions providers for its State of the Channel study each year, it chooses one of the areas of the study to focus on in detail. CompTIA looked closely at sales and marketing this year.
The study shows IT solutions providers are more actively branding and marketing their companies. “In a cloud world, the vendor brand becomes less important. There is more emphasis in service providers needing to brand themselves,” April says.
One of the avenues suvey respondents say they will use to market their companies is social media. April explains it can be a cost effective way to reach their customers and can be a tool for lead generation and conversion.
The study also reveals IT companies are planning changes to their sales teams: 72 percent of those surveyed report major or moderate activity related to adding new sales represenatives, and 66 percent report major or moderate activity related to hiring sales reps from backgrounds other than IT. The survey also reveals 72 percent report major or moderate activity related to adding new sales people, and 63 percent report major or moderate activity eliminating sales people based on a business model change.
More data from the study is available on SlideShare at http://www.slideshare.net/comptia/comptia-4th-state-of-it-channel-study.
The Fourth Annual State of the Channel study is the latest addition to the CompTIA research library, which includes more than 100 studies, briefs, buyer’s guides, whitepapers and other market intelligence. These independent, vendor-neutral studies cover a range of topics, from technology adoption and business attitudes to market and channel trends and workforce issues. Many of these publications are available at no cost to CompTIA registered users.