Cloud and emerging technology fuelling positivity in IT channel

The UK findings of  CompTIA's State of the Channel Report 2018, show that the majority of organisations (58%) are optimistic, with (19%) pessimistic about what's to come., which surveyed 250 UK companies, reveals that primary drivers behind the change in the technology ecosystem stem from customers demanding specialised vertical expertise and consultation (34%), as well as cloud computing continuing to disrupt routes to market (26%). 17% cite emerging technology as the primary driver. This is reflected in the channel's expectations for growth, with 64% of companies expecting their current mix of offerings to change next year, and 47% expecting more revenue from net new business.

When asked specifically about emerging technology, 73% of respondents see a business opportunity, with 71% citing customer demand as a major factor behind offering these services. Artificial intelligence/machine learning is the technology that most channel firms are offering or experimenting with, while blockchain, VR and IoT are next in line. Half of respondents said that some form of emerging technology is an active part of their portfolios.

Skills gaps still remain

Despite the general optimism in the channel, there are still some challenges that need to be overcome. More than half of IT staff believe that the availability of IT workers, as well as a lack of training is still an issue. Similarly, 37% see the lack of younger employees joining the channel as a concern. This shows that the current skills gap is still a prevalent issue and will continue to be in the future.

These concerns ring true with emerging technologies as well. 60% of respondents indicate a need for technical training as a challenge when experimenting with emerging technology, as well as the cost of entry (47%), and hiring the staff with the right skills (38%).

Vertical focus

Working with vertical industry has been hugely important for the channel. A combined 72% of respondents said vertical industry work was very important or important last year, with increased customer demand and significant revenue opportunities being the main reasons. Professional services, retail and manufacturing are currently the top three verticals of focus.

"It's clear that the channel is undergoing a transformation," said Carolyn April, Senior Director, Industry Analysis at CompTIA. "We're seeing a shift in the types of services that channel firms are offering, with cloud remaining hugely influential. We're also seeing the channel experimenting with emerging technologies and starting to offer fully fledged solutions to make the most of growing customer demand."

Key findings include:

Optimism in the channel:

-          Firms optimistic about the future of the channel (58%)

-          Mixed feelings - equal parts optimism and pessimism (22%)

-          Generally pessimistic (19%)

Factors leading to a positive future outlook:

-          Cloud computing opening up new opportunities (56%)

-          Broader use of technology by all types of customers expands need for IT experts (43%)

-          Emerging Technologies such as AI, blockchain etc. are broadening opportunities (41%)

Factors leading to a negative future outlook:

-          Skill gaps for emerging technologies (42%)

-          General business challenges (31%)

-          New types of competitors (30%)

Primary drivers for change in the channel:

-          Customers are demanding specialised vertical expertise (34%)

-          Cloud computing has disrupted routes to market (26%)

-          Emerging technologies are moving companies in new direction (17%)

Emerging tech:

-          73% see emerging technology as a business opportunity for the channel

-          71% say customer demand is a major factor behind developing offerings

-          AI (48%), VR (36%) and blockchain (36%) are the top three currently being offered

-          60% of firms see the skills gap as the main challenge to emerging tech

Skills gap:

-          53% of staff believe more IT workers are needed for an optimistic outlook on the channel

-          52% believe more training is needed for an optimistic outlook on the channel

Vertical focus:

-          72% of respondents said vertical industry work was very important or important

-          60% said this was driven by customer demand

-          45% said this was driven by significant revenue opportunities