European partners expect growth this year, here are three ways they will achieve it
It’s possible to achieve growth at a time of global economic turmoil, provided business objectives are fully aligned with the needs of customers
Businesses across Europe are expecting growth in the coming quarter despite being seriously affected by prevailing economic headwinds, a new report has found.
More than eight in ten partners expect to grow their business in the current fiscal year, with 43% of those surveyed forecasting growth of more than 10%, according to the inaugural TD SYNNEX Technology Ecosystem Benchmark – conducted in partnership with Canalys.
While partners appear confident of their future growth, how are they going to achieve it?
With insight from the Technology Ecosystem Benchmark report for Europe, we can reveal three ways that partners are planning to grow their business. These are: identifying the right areas for growth; providing ways to accelerate investment in change; and, growing through ecosystem partnerships.
Identifying areas for growth
There are three primary technology areas where partners are expecting most of their growth to come from: servers and storage (51%), cyber security (49%), and endpoint devices (48%).
Security is the technology solution that partners are most often asked to provide (49%), with only half of those surveyed currently able to deliver it.
The primacy of these three technology areas signals that the ways partners expect to grow their business are beginning to change. While hardware sales currently make up more than a third (34%) of revenues today, in the next three years this is expected to drop to a quarter.
In its place, 74% of partners expect managed services to account for most of their revenue, followed by selling professional services (65%), and consumption-based anything-as-a-service (50%) models. Notably, more than a third expect to derive most of their revenue from their own intellectual property.
In order to keep up with this changing demand and new opportunities, partners can work with vendors and solutions aggregators to access the business and technical training they need to transform their operations. Programmes like TD SYNNEX’s Practice Builder start with an assessment of a partner’s current strengths and capabilities, which provides a baseline to set the roadmap to the desired future state.
Having identified the best growth opportunities and steps to reach this goal, training and enablement support ensures that the partner’s technical, sales, and customer service teams have the skills they need to capture those new opportunities. From here, partners put their newfound skills into practice, developing new services and solutions offerings – whether branded or white label – thereby accessing new growth and profit streams.
In conjunction with this, support is needed to smooth out the transition from yearly, half-yearly, or quarterly revenues to monthly payments from customers as new consumption models are employed.
Whether partners choose one or a number of third parties to help them manage and support this transition, simply getting this work started will prove critical for future success. With rapid technology change (45%) seen as the biggest challenge businesses are going to face in three years’ time, it’s important that the channel lays the foundations for keeping pace with that change today.
Accelerating investments in change
Given the turmoil in the global market, making this change happen won’t be easy for partners or their customers. Finding ways to mitigate financial risk when acquiring technology and associated training is important. However, it seems as though what partners offer and what their customers are asking for is currently misaligned.
Of the business solutions partners offer today, credit, financing, or leasing are the most common, but only 29% say that these are the services customers request most often. In reality, flexible as-a-service consumption models (49%), and preferred pricing (48%) are the most popular options, with only 39% and 43% of partners offering those, respectively.
Giving customers the flexibility to choose a consumption or financing model that works for them is clearly important to partners, but few take this on themselves. Indeed, only 26% manage customer financing wholly in-house.
This is where solutions like TD SYNNEX Capital and other financial solutions can help partners offer a whole range of consumption and financing solutions easily and build them seamlessly into their customers’ purchasing journey. By providing clear and simple terms and a digitally enabled approval process, partners have the tools they need to increase the speed at which they close deals and grow their business, without increasing their own credit cost.
Another major challenge is having the right skills to deliver on customer requirements, particularly given the breakneck rate of technological change.
More than four in ten (42%) partners cite talent recruitment and retention as a major challenge to their business, equal to facing increased competition and second only to adapting to external factors (61%).
Of the skills that partners say that they need the most, security (59%), networking (41%), and servers and storage (40%) are the most in demand on the technology side. Meanwhile, on the business side, managed services (62%), business consulting services (62%), and demand generation and marketing (35%) are those most sought after.
In response to this skills and competition quandary, partners appear to see collaboration as the way forward. When thinking about growth, 87% see organic growth as important to their business. However, 79% also say that engaging with ecosystem partners is also important to fuelling growth.
Whether with one another or with other solutions orchestrators, this collaboration will allow partners to augment their own teams with the skills and expertise they require to meet their customers’ needs, instead of seeing them go to a competitor. As partners look ahead to a period of relentless change in the technology market, working with others in the channel ecosystem will give them the flexibility they need to focus on their own growth and transformation plans and ensure that they are executed successfully.
Looking to the future
This is a disruptive, challenging, but exciting time for the channel as it helps its customers navigate rapid changes in technology and business. At TD SYNNEX, we have years of experience and expertise in helping partners tackle these very issues. Here we have described just three of the ways in which partners across Europe are planning to grow their businesses; if you want to find out more, download the TD SYNNEX Technology Ecosystem Benchmark now.
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