Opportunities and risks in the channel

Life in the channel has changed significantly over the last twenty years. Emerging technologies and evolving business needs are constantly transforming the key players and dynamics. While there was once a time where the channel could target C-suite leaders and potential prospects with a range of specific areas from storage to hardware, today, matters are a little more complex.

Complexity for today’s CIOs, CTOs, and CEOs comes increasingly in the form of the non-stop explosion of new technologies. Technology is growing faster than ever before, with Gartner projecting global IT spending will reach approximately $5.26 trillion by the end of 2024, marking a 7.5% increase from 2023. This growth is driven by significant investments in a range of technologies that we are seeing change every single day – from quantum and edge computing, cybersecurity and blockchain through to GenAI. The C-suite, then, finds themselves less focused on one specific growth area, and instead they are using much of their resources simply to keep up with the changing technology landscape.

Additional complexity is brought to the table, courtesy of rising inflation and interest rates alongside slowing economic growth, making business leaders focus more than ever on finding efficiencies, enhancing productivity and optimising operations.

Each of these new enterprise challenges, however, also presents an opportunity for the channel. These challenges call for partners with strong expertise and offerings to help solve them – but they also mean that competition between channel partners has never been higher.

In this constantly evolving environment, channel partners must stay abreast of changing industry trends as well as the opportunities – and risks – they present. It's through this approach that they can ensure they rise above the competition to leverage the changing landscape for success.

In the channel, sharing is caring

Exponentially developing technologies make it difficult for businesses to keep up and can outpace a company’s ability to adapt its strategies, processes and infrastructure. As such, one of the biggest opportunities for channel partners lies in the ability to develop highly-valued resources for their customers.

Vendors that provide products like servers and networks, for example, rely on partners to help them expand their reach and diversify revenue streams. For many, channel partners can act as an instrumental missing piece in helping to grow product or service offerings, respond more quickly, and deliver tailored and all-encompassing solutions to better satisfy customer needs.

Providing resources in this way is also an important long-term solution for both channel partners and customers, helping to build trust and strengthen relationships. It can lead to more successful joint ventures, resulting in more customers being reached and bigger slices of the market share gained. It also goes a long way in helping to foster long-standing partnerships, which – particularly in a fluctuating and dynamic business environment – is crucial for continued success.

Modernising the data center

One example of where partners can provide crucial support is in the growing shift towards the modernisation of the data center. Research from last year indicated that around half of organisations surveyed had set goals to reduce the energy consumed by their data center’s resources. It also highlighted the need for modern data infrastructure to make this a reality.

As data centers work towards this goal by adopting advanced technologies like AI, edge computing and sustainable solutions, channel partners are constantly required to upskill to provide the relevant services and support to meet increased demand for expertise. These partners can support with enabling AI-driven business value, for example, which can offer efficiency improvements and enable highly differentiated innovations, representing a transformative opportunity for businesses.

Furthermore, for companies that create, curate, or provide services related to unstructured data and content, AI can revolutionise how they curate and monetise their data, creating new revenue streams and business models. Channel partners must therefore be able to effectively manage and analyse data, which must not only be safely and responsibly handled, but also intelligently leveraged for more informed business decisions. This is also a reason why access to the right data, in a world of increasingly diverse data types, is crucial.

Alongside these intricacies, the growing emphasis on environmental and green initiatives means channel partners must always remain aligned with sustainable practices, with businesses increasingly referencing moral and regulatory requirements as a key factor in the decision to improve their data center operations’ sustainability. Channel partners can help organisations get there by offering solutions that optimise energy efficiency and incorporate renewable energy sources, such as energy management solutions, cloud and virtualisation services and sustainable product offerings.

Navigating supply chain challenges

Creating a green data center, however, comes with internal business considerations as well as external market challenges. One example includes increasing supply chain challenges and delays in the form of natural disasters, health crises, and manmade disruptions, which can significantly halt production and distribution. As a result, vendors may see increased costs due to being forced to procure materials from alternative suppliers at higher prices, which can have detrimental impacts on a company’s bottom line. Such disruptions can also cause product shortages or surpluses, which can complicate inventory management, potentially even leading to lost sales or excess stock.

Investment in strategies to enhance supply chain resilience has never been more important. According to further insights from Gartner, 61% of supply chain organisations identify technology as a source of competitive advantage, and 20% highlight emerging technologies as highly important investment areas. Predictive analytics is one such technology which can offer a wide range of benefits by using historical data to forecast future events and trends. These analytics can enable increased agility and flexibility, helping businesses to quickly adapt to changing market conditions and customer demands, which is critical in maintaining a competitive edge. Supply chain issues can also drive many organisations to adopt more sustainable practices, forcing them to optimise their resource use to reduce waste and improve efficiency.

Always staying a step ahead

Throughout the many ups and downs of the industry, channel partners must continue to assess the landscape and strategically plan their next move. This not only relates to familiar areas, such as the need to carefully consider target markets and customers, but it’s an approach that should be embedded into the whole partner relationship. Sustainability considerations must also consistently be at the forefront of all decision-making to ensure growing regulatory demands and expectations from customers and consumers are met.

The value of the channel is tremendous in that it can truly help to bring a business offering together – but it should be based on the collaborative approach of developing a joint value proposition. The first all-important step is aligning on a shared vision and clear expectations around what success looks like to both parties.

As the technology industry continues to develop in ways we cannot always predict, this way forward will lead to real value by helping to create more effective and impactful solutions – and ultimately, it’s this approach that will drive mutual success.