Revenue Growth for Tech Vendors Selling Product Through Tech Distribution.
The vast and rapid growth in technology innovation has transformed the way tech vendors and tech distribution conduct business. After surveying 50+ technology channel executives, the 2018 Global Technology Distribution Council (GTDC) reports that more than 70% of vendors expect double-digit revenue growth through distribution in 2018 compared to 55% in the prior year. The tech distribution growth is accredited to the distributors’ continual investment in new services, solutions, technologies, and programs.
Over the years, vendors have come to realize the scope of influence, capabilities, and efficiency distributors possess over small and medium-sized markets. Consequently, vendors are heavily relying on distributors to grow their market share as well as the recruitment of new partners for their technologies and solutions.
The GTDC’s 2018 Tech Distribution Outlook reports that vendors prioritize the recruitment of new solution providers as their main objective when partnering with distributors.
In order to survive in their sector, tech distributors are aggressively grasping for the newest and most effective ways to make conducting business in the ever convoluted channel easier.
At the same time, vendors have always sought solutions to make use of their product or services easier for the end-users. As a result, the end-users’ increasing demand for instantaneous access to networks of information via the cloud, has coerced the IT industry to extend its growth in:
- cloud
- security
- data center
- and IoT
Technologies that Will Help Drive Tech Vendor and Tech Distribution Growth
Cloud and Cloud Related Services
The accelerated move towards cloud infrastructure adoption has spurred many businesses to turn to cloud service and software as a service provider (SaaS) for new solutions evaluation.
Since the introduction of the concept by Google CEO Eric Schmidt in 2006, cloud technologies have become an enormous revenue generating source for tech vendors and cloud service providers. Thus, now, cloud computing is a fully recognized as a feasible, and cost-effective technology solution for all businesses.
The 2018 GTDC reports cloud-related services are expected to be a major area of growth for vendors. The report predicts that this growth is achievable through the vendors’ tech distributors.
However, as the platform-based technology continues to expand in the IT channel, vendors’ main concern remains the end-users acceptance of their products. Vendors’ main goal is to provide customers with convenient, seamless solutions that are integrable with other products.
GTDC’s survey findings indicate that vendors will continue to increase their reliance on distributors. Consequently, these vendors will need their distributors for bundling their products into new platform-based solutions.
The total global public cloud market will be $178B in 2018, up from $146B in 2017, and will continue to grow at a 22% compound annual growth rate.
Source: CAGR
The global forecast for the size of public cloud computing market from 2008 to 2020 (in billion U.S. dollars)
Security
Both public and private sectors can use the convenient and flexible way of managing data and tasks via cloud computing. The movement towards cloud adoption is accelerating because cloud computing offers:
- lower operational costs
- accessibility
- mobility,
- ease and speed of implementing
- and integration
However, the security of data has been the top concern for many large and small organizations. In recent years, the popularity of IoT devices has made the need for a robust cloud security a prominent issue.
As cloud security threats are materializing in the headlines, businesses need to develop and implement a security breach plan for during and after an attack.
The Cloud Security Alliance (CSA) is a great source for learning the best practices for a secure cloud storage environment. The organization also offers experts’ advice and tips for preventing cloud security breaches.
Cloud computing and services have created an imposing crater in the IT industry landscape that continues to deepen. Therefore, the solution is now one of the fastest-growing industries worldwide.
This fast-growing segment of the has left many companies concerned with their control of cloud usage and spending.
Therefore, to alleviate the cost associated with cloud spending, many IT distributors are taking up the role of a managed service provider (MSP). These distributors sell cloud services to resellers who ultimately sell the service to end-users.
75% of distributors cite security as the most active category for new vendor partnerships.
Source: 2017 Distributors and Cybersecurity Report ©GTDC
The global forecast for cloud security revenue from 2014 to 2020 (in billion U.S. dollars)
Internet of Things (IoT)
According to GTDC’s 2018 Tech Distribution Outlook, IOT is the 3rd area in which distributors will make the most progress in 2018. The report states IoTs continue to develop in the channel, with distributors increasing drive for signing IoT-focused vendors.
As SaaS providers look into ways to take advantage of the boom in IoT, vendors are searching for SBM opportunities in order to capitalize on the IoT movement. Meanwhile, IoT distributors are ahead of the curve by having invested millions of dollars in solutions, expertise, tools, and services. This move will help bring vendors and other partners together that specialize in IoT technologies.
The effectiveness, instantaneous, and mobile functionality of IoTs are just a few features that make these cloud base devices a centerpiece of the IT industry. With a forecasted 20-30 billion units in use by 2020, IoTs are considered to be making a significant impact on the IT market and society as a whole.
By 2020 the number of IoT devices is expected to reach 50 billion and $19 trillion is anticipated as cost-savings and profits from this investment.
From 2017 onwards, the market for the Internet of Things is projected to be worth more than one billion U.S. dollars annually.
Source: statista.com
The global forecast for the number of connected devices (Internet of Things; IoT) from 2015 to 2025 (in billion U.S. dollars)
Data Center/Hyper-Convergence
The concept of Hyper-convergence is growing at a rapid pace. The increase in data traffic, , and expense of on-premise data storage have contributed to the growth of data centers and its evolvement to hyper-convergence infrastructure.
Hyper-convergence basically offers users the benefits of cloud storage with the security and control of on-premise software. For a vendor and its channel partners, hyper-convergence systems streamline their data management procedures. This occurs by combining server and storage resources with channel software in scalable channel management, sales or marketing software. Also, for a vendor and their channel partners, hyper-convergence allows the creation of a preconfigured centralized channel management. In Addition, hyper-convergence acts as a storage system in the form of a scalable modular solution.
According to Nutanix, Hyper-converged infrastructure streamlines the deployment, management, and scaling of datacenter resources by combining x86-based server and storage resources with intelligent software in a turnkey software-defined solution. Therefore, separate servers, storage networks, and storage arrays can be replaced with a single hyper-converged solution to create an agile datacenter that can be easily scaled with your business.
The hyper-converged infrastructure market is expected to reach USD 12,607.4 Million by 2022, at a CAGR of 43.59% between 2016 and 2022.
Source: Hypervisor
The global forecast for hyper-convergence revenue from 2015 to 2025 (in billions)
Meeting the Demands
With more than 70% of businesses today relying on indirect sales channels to capture market share, most sales, marketing, finance, and operations departments need timely and accurate channel POS and inventory data to make .
For customers needing modular solutions, CMR’s self-service software provides unmatched flexibility and scalability. As a result, our customers are able to build the most optimized platform to manage their channel.
Customers around the world rely on CMR’s suite of channel management applications and industry expertise:
Partner Portal: Your suite of channel management applications from Deal Registration, Co-op/MDF Management, Reseller Profiles, Special Pricing Requests and more
Channel POS: Our flagship product that streamlines the collection and processing of point-of-sales records into comprehensive reports
Channel Inventory: Application to help you monitor price protection and inventory levels
Other Customized Channel Software: We can build a channel management application custom-made for your business