Canalys Channels Forum 2019: What’s Nou for the channel?

1. Channel future looks bright thanks to connected devices

While not a new phenomenon the explosion of connected devices continues.  Canalys forecasts there will be more than 36.3 billion internet-enabled devices by 2023.  Thankfully, someone needs to sell, install and manage them, and help to build a strategy around user-experience and their usable lifecycle.  Naturally, this is great news for the channel, as is the accompanying growth of the complementary ecosystem that surrounds all these devices – securing them, applications to use with them, cloud services, and even new modes of acquisition and consumption.

2. Strong channel growth

Canalys shared some eye-popping statistics demonstrating the health of the channel.  $100 invested in the stock of publicly quoted channel companies would have delivered a $300 return over the last 5 years.  At a time when the role of the channel has been scrutinised with disruptive market entrants like Amazon Business, this is brilliant to hear.  The big players want to get bigger and more consolidation is anticipated in the market, especially in Europe.

3. Security continues as a major customer priority

The threatscape is growing and the number of businesses getting breached is rising, along with customer demand to double-down on security.  For channel players, it means careful consideration of go-to-market propositions.  Reselling product isn’t enough, it requires focus and skill especially as new technologies converge including facial recognition, physical security, and technology in buildings.  Ethical hacking is also on the rise as more businesses want to test their security posture and Canalys speculate more channel partners will need to consider adding this capability to their offering.  Interestingly, (and it stands to reason) they raised the point that more Managed Service Providers (MSPs) are coming under attack from cybercriminals, as breaching one set of defences potentially yields a far greater prize of access to systems and data belonging to multiple companies, rather than just one.

4. Tech bubble bursts

Previous conferences have raised the challenges and opportunities being presented by disruptive innovators like Evernote, Slack, and HubSpot.  Many of these companies have IPO’d in recent times and following overvalued flotations have subsequently suffered stock losses.  Accordingly, there are several interesting companies that may struggle to make a go of it on their own long-term.  Canalys predict some major consolidation in the market as a big, more established player could pick up these companies at a more realistic value, and with that the potential of mounting more formidable competition to Microsoft in the office arena.  We watch on with interest…

5. AI is transformational

Similar to connected devices, artificial intelligence (AI) is driving an interesting ecosystem of technology from simple infrastructure to development and support.   Impressive ambitions like curing cancer or self-driving cars are proving more challenging and are further out than anticipated.  More modest innovations like customer service and translation are gaining commercial deployment.  Of course, this offers real-world opportunities for the channel and Canalys called for partners to get serious about AI as something that is here and creating business, and not something to be addressed tomorrow.

6. Faceoff: Infrastructure vs Public Cloud

Investment in on-premises infrastructure has been strong in recent years and versus investment in the public cloud, revenues have been running neck and neck until recently.  However, over the last 12-months Canalys believes investment has started to skew in favour of the public cloud.  As a result, a new battleground is emerging over who owns the interface to the public cloud.  Canalys cites Citrix, RedHat, and VMware as the major players shaping this domain.  It will pose an interesting dynamic – customers don’t want to suffer cloud lock-in and using an interface vendor will assist with limiting that risk, but in-turn by doing so they could create lock-in at the interface/intermediary level.  Channel partners will need to think carefully about which horse to back in terms of capability and offering, but the interface will certainly help many partners to develop their role as cloud aggregator.

7. The Circular Economy

Big moves by vendors to use recycled plastics in their devices, be forest-neutral on print, and extend the lifecycles of legacy products brought the Circular Economy into focus during the conference.  While many channel partners have invested in recycling capabilities and WEEE compliant disposal services etc, Canalys highlighted an expectation for greater growth in technology and services associated with environmental responsibility and sustainability.  Partners need to demonstrate their credentials in this regard if not with their own services, then with the vendors and partners they choose to work with.

Finally, on a separate note, the Dell Technologies keynote I watched from Joyce Mullen, President, Global Channel, Embedded & Edge Solutions made a really great observation that resonated with me and is good for the channel to remember.  She said, ‘the value is in the seams not the silos’ and this rings true for the channel today more than ever.  Vendors and cloud providers develop great solutions for all kinds of stuff, but someone still needs to help the customer join it all together.  That, as ever, is the inherent value of the channel.