The Covid-19 pandemic rewrote the IT Channel rule book, overnight businesses had to explore new ways of working with customers and supply chain partners.
Today, the question for the Channel is whether the changes that have occurred since March 2020 will be permanent and are they ready for this?
We asked leading Channel experts for their predictions for future changes and tech trends that every Channel marketer needs to know in 2022.
Top 5 challenges the Channel must overcome in 2022
“The current speed and acceleration of security in organisations is currently quite frightening and is something that has the potential to worsen the already recognised and worrying skills gap in the industry. To combat this as we move into next year, it is paramount that we harness the power of the Channel as a mediator. The highly skilled individuals within the Channel, who see the industry and its shortcomings from all angles, are the key to providing system integrators, enablement programs, and graduate programs to promote the generation of skilled individuals who can implement technology, offer strategy, provide consultancy services, and recommend software to those future organisations being breached. Tackling the skills gap and keeping up with the ever-changing cyber security landscape will be a real trend for the channel in the near future.” Scott Walker, Senior Director, Channel and Alliances EMEA at Illumio
Fragility of the supply chain
“This year we have experienced the true fragility of the supply chain. The semiconductor chip shortage, petrol scarcity, Covid-19 and Brexit have all rocked global distribution channels, highlighting a need for greater resilience and agility. In light of this, we can expect to see further reviews into logistics and a recognition that the supply chain is under far too much stress to be wholly managed by humans. Putting data at the heart of the supply chain, will reduce some of the complexity derived from human-dependent processes and protect the supply chain against future obstacles and challenges. Rather than simply look backwards and use data as a proof of performance, we’re now using it to look forwards and predict the future.” Kevin Brzezinski, SVP Operations, Westcon-Comstor
Changes in customer buying habits
“Due to the pandemic, a high percentage of customers are now purchasing technical solutions online, so the Channel industry has to adapt to this new way of selling. In 2022, we’ll see the rise of Channel partners that have a strong online presence. They will need to demonstrate their integration services and how they can make the customer journey much simpler and smoother. Customers can easily purchase solutions directly from the vendor, so it’s important resellers provided that added value through their management, integration and deployment services, which customers need the most.
Customers are also now much more informed and knowledgeable coming into the buying process. This means that over the next year, Channel partners really need to step up and change their approach to training employees, equipping them with the right knowledge and tools to provide the best customer service. It’s crucial every single employee knows the technology inside and out, which is why resellers need to invest the time and energy to ensure they provide the best customer experience.” Tim Britt, Head of Channel EMEA, Dropbox
Digital marketing fatigue
“Fatigue with traditional digital channels presents a challenge to Channel marketers today. These are mediums we can’t ignore because they are established and cost effective. But we really need to drive creativity to overcome this fatigue, and for me, that’s really about humanising our approach. Helping people to feel connected to the business in new ways and aspiring to disrupt with innovative Channel marketing initiatives.” Jeff Chancellor, Vice President, Ecosystem Success, Sage.
The future remains hybrid
“After a tumultuous 2020, this year’s theme has been hybrid – flexibility is now at the core of most workplace cultures, and it’s not binary. The question is no longer whether staff are working in the office or at home, it’s whether they’re working in the office or elsewhere. The need for an exceptional user experience, more effective collaboration and security has been pushed even further up the agenda. This megatrend is putting substantial demands on the IT department because securing the network, in this hybrid environment, is tough. As the scale and complexity of enterprise environments grows, the Channel community will play a critical and strategic role in helping businesses (from SMBs to enterprises) to meet this challenge, at a time when they’re prioritising IT investments for 2022.” David Grant, CEO, Westcon-Comstor.
Top 7 major changes we will see in the tech channel in 2022
New routes to market
“One of the most important trends we’ll start to see in 2022 is businesses moving customers away from a direct transaction model through their own sales teams to interacting and billing via a selected number of partners. This will allow companies to interact with their customer through a number of trusted resellers, who either are in the position of having established a great working relationship with a particular customer or are willing to invest in building a new one.
This new route to market will deliver additional benefits to mutual customers as they get a more personalised customer journey. These resellers provide local language skills, tiered support models and additional training on new products, which would be time intensive and costly for the business to provide.
Not only this, but Channel partners will also benefit from this new model, with many seeing lower churn rates among their customer base as a result. Importantly, partners will be given the opportunity to show just how beneficial they are to businesses with this new customer approach.” Tim Britt, Head of Channel EMEA, Dropbox.
The continued growth of the cloud
“Channel partners will pick the cloud communications winners – for years, Channel partners have worked with an array of cloud communications vendors. However, now that the emergence of hybrid work models has driven growth and maturity within the market, the partner community is uniquely positioned to drive revenue for those companies that provide strategic value to both partners and end users – ultimately determining the market leaders for 2022 and beyond. Partners will no longer look for businesses that have the trendiest solution or package of the day, and instead will invest in the companies that prioritize long term collaboration instead of short-term profit.” Chris Jones, chief revenue officer, Fuze.
Networks will become more complex
“Traditionally, most businesses have considered networks to only consist of two separate layers: software and hardware. In 2022, organisations will begin to discover the value of viewing their networks holistically and will come to appreciate how their networks are in fact multi-layered.
Going forward, networks will only continue to become more intricate and complex, with many more parts now comprising the whole. Thus, companies must reflect on their infrastructure in the same way – as a whole. They can do this by finding ways to combine the power of cloud management with next-generation switches and access points, utilising the likes of AI and ML and deciding whether public cloud, private cloud, and/or on-premises solutions best cater to them. This approach allows them to achieve both diverse business connectivity and their commercial needs.” John Morrison, Senior Vice President EMEA, Extreme Networks.
Customers still struggling to correctly deploy & maintain cybersecurity solutions
“One of the biggest cybersecurity threats facing companies today, and a trend we see continuing into 2022, is a lack of investment in training when deploying new software. For SMEs, which may not have internal security teams, necessary precautions such as software maintenance and upgrades often fall by the wayside. A lack of understanding from SMEs, particularly those without a dedicated technical expert, on how to properly maintain their cybersecurity tools is leaving them open to breaches.
A key part of eliminating this threat is support from vendors and the roll-out of adequate training on new software. As more companies race to deploy security solutions, ensuring that consultancy and necessary support is not lost is crucial to long-term protection. The cybersecurity market for SMEs is really opening up as we approach 2022, vendor support could soon become a need among customers and a make or break selling point.” Daniel Hurel, VP Cyber Security & Next Gen Solutions, Westcon-Comstor.
The role of the Distributor in the Channel will change
“The role of distributors has already started to change but in 2022 this will be one of the biggest disruptors in the Channel industry. For Software-as-a-Service vendors it’s not just about providing an advanced marketplace for transactions. They still look to distributors to provide value-added services around new resellers, recruitment, enablement, and knowledge-based services.
This means that in 2022, distributors need to think about their offerings as a whole, rather than just about the one aspect that brings in the most revenue. For example, they need to think about how they provide support for their level two and three vendors – this is where partners need support the most as it helps build a sense of loyalty amongst customers.
There are a lot of players currently in the market and so distributors need to create value with integrated services in order to stand out. Next year, this will be a commodity item rather than a luxury.” Tim Britt, Head of Channel EMEA, Dropbox.
Growth of the subscription economy
Increasingly, businesses are looking to move from traditional software ownership to the subscription economy.
“The trend to the subscription business model continues to grow quickly at a CAGR of 17.9% for 2020–2025 and is forecast to represent 83% of total software revenue by 2025,” said Mark Thomason, research director for Digital Business Models and Monetization with IDC.
Whilst the benefits of moving to a subscription model are significant, the pivot is not so simple. As customers look for more flexible financing agreements following the pandemic, demand for these service models will only grow. In 2022 we will see many channel partners recognise their role in supporting the transition and tailor their own service offerings accordingly. Or risk being left behind.
Further investment in Ransomware
“Ransomware attacks have been the most prevalent form of cybersecurity threat this year, with this threat type taking hold of businesses of all sizes and sectors. As a result, we have begun to see more companies taking the realities of ransomware seriously, which will prompt further investment into ransomware protection in 2022. In particular, we’re anticipating an uptick in technologies and tools in the back-up software and antivirus software spaces. The most important piece businesses must focus on, however, is education. Even with all the tools in the world, businesses will fail if their staff aren’t aware of the risks and dangers of breaches. It’s basic, but critical and we will see more severe and frequent ransomware attacks in 2022 unless cybersecurity education is taken seriously.” Daniel Hurel, VP Cyber Security & Next Gen Solutions, Westcon-Comstor.
“For the security industry in 2022 in particular, we need to be constantly evolving and adapting to the new threats: from looking at how to secure remote access with the principle of least privilege (Zero Trust cybersecurity approach), through to helping prevent and stop ransomware attacks with early detection. Those that stand still and continue to offer traditional security platforms will be missing an opportunity. Those that adapt, offer complimentary technology solutions and understand the pain points facing a business and the specific threats for the industry they operate in, will be far better positioned throughout next year, helping customers to emerge more secure than before.” Majid Mohammed, Channel Manager, Wallix
How can Channel marketing adapt to predicted challenges and changes?
Marketers will have to cut through the noise
“The main challenges are the same for everyone, and that’s the current uncertainty. Add to this the fact that marketing is often the first budget that gets cut. Within marketing, I think the biggest challenge will be to cut through the noise because vendor activity is at an all-time high. This doesn’t necessarily mean we want to be the company that shouts the most but finding new ways to engage our customers. Social media has definitely become more important for this purpose, and LinkedIn is now a must-have in every campaign.” Fanny Clavel, Marketing and Communication Director France & UK, Zyxel Networks
Continued investment in digital
“Investment in digital marketing will continue to be a growth area as we look to deliver more targeted, relevant content to Channel partners, helping to educate and enable them in their roles. Individuals need to be able to consume content in a way that is personal to them, on the platform of their choice and at a time they require so we are investing in the right tools and systems that will ensure content deliver mechanisms are more agile, relevant and personalised. Direct mail has gone completely off the radar in the last few years but we will be using a balanced blend of online and offline marketing that will create a better engagement with our customers and provide the more personal touch that everyone has been lacking in the last 18 months.” Andrea Horton, Head of Marketing, Nuvias Group.
There will still be a place for face-to-face events
“Events will continue to be a key focus for us and our 2022 event schedule is looking the most varied and interesting than it has ever been. At Nuvias, we will be offering a more diverse and inclusive range of events to not only address the changing demographic of the Channel, but to give customers more choice on when and where they meet with us and can choose an environment where they feel safe and considered.” Andrea Horton, Head of Marketing, Nuvias Group.
What does the Channel have to look forward to in 2022?
Customers will turn to channel for their knowledge and expertise
“As we head into 2022, the opportunities and role of the Channel is only set to grow. Customers are battling with rising ransomware attacks which are growing in sophistication. Digital transformation and the reliance on cloud services has only continued to accelerate as a result of new hybrid working brought about by the pandemic and IT leaders are trying to navigate the potential new security vulnerabilities this brings. The channel is going to play a critical role in helping customers to deal efficiently with all of this. Businesses are looking not only for the right technology platforms, but guidance and support as we start to face new challenges and create new working strategies.” Majid Mohammed, Channel Manager, Wallix.
Growth for partners offering differentiated services
“I’m optimistic about the new year – all analysts and experts point to continued growth, and there are some truly exciting innovations on the horizon leveraging the power of ML/AI to change the way we live and work. The shift to service-driven, outcome-led solutions is powerful and will change the way customers invest and who they choose to show loyalty to. I hope to see more partners embrace solutions that provide flexibility, investment scalability and interoperability to build comprehensive ecosystems and truly differentiated services to market.” Hasina Dhanji, Business Development for Cloud in EMEA, CommScope.
Greater collaboration between vendors and partners
“I expect to see the development of key themes and focus areas perhaps on the business drivers and impacts across sectors or verticals. It will be interesting to see if open collaboration between vendors and partners increases in the way messaging into customers is linked to their joint collaboration and propositions rather than just looking at technology solutions and market trends. Although we appear to still be some time away from customers and businesses feeling confident in making much longer-term commitments, I’m looking forward to instilling as much certainty as possible in our own operations and relationships.” Mike Tankard, Partner & Alliances Director, Northern Europe, Citrix.