Adaptability, Health, Relevance and Resilience on Display in the IT Channel, New CompTIA Research Reveals

DOWNERS GROVE, Ill., May 10, 2023 – The information technology (IT) industry channel of 2023 teems more technology solutions, greater opportunities for specialization and room to succeed for everyone from legacy firms to new market entrants, according to new research published by CompTIA, the nonprofit association for the IT industry and workforce.

“The channel is healthy and evolving with new technology solutions, new players, new rules of engagement, and new customer habits,” said Carolyn April, senior director, industry analysis, CompTIA. “The majority of firms feel good about business prospects, whether they’re competing in the traditional arenas of reselling and infrastructure, focus on consulting and services or represent new and adjacent channel types.” 

The generally positive outlook detailed in CompTIA’s “State of the Channel” report is likely bolstered by recent financial results. Two-thirds of companies said their profitability generally increased over the past two years, mainly in the areas of business consulting, IT consulting, and managed services. 

Within the managed services market, 52% of managed service providers (MSPs) say that cybersecurity services are the most requested offering by customers. In response, 42% of MSPs said they hired personnel with specific cybersecurity skill sets in the last year. A similar percentage (41%) retrained their existing workforce to update their cybersecurity skills.

Still, channel firms that concentrate on product sales and break-fix services “can still stay in a traditional lane and find a market to run their business,” April said.

Customer experience the key to success

Regardless of what channel segment they occupy, companies agree that customer experience (CX) as a competitive differentiator is the top factor in maintaining relevance and health. That means delivering a quality CX experience at every step of the buyer’s journey, from initial sales interactions to onboarding to tech support to communications responsiveness and ongoing account management.

“Customers are more knowledgeable and exacting about the technology solutions they use, and have more options about where to buy them,” April said. “If you are not providing them with a high level of service and support, they are going to move on.”

The same expectation of a positive experience extends to channel firms’ relationships with technology vendors. Just as customers have more choice than ever, so do many channel businesses. The report shows that technology vendors have responded in a positive way. Better than nine in 10 channel firms are satisfied or very satisfied with the vendors they work with.

Nervousness about inflation continues

Inflation is the economic indicator that channel firms are most wary about and will need to keep their eye on the months ahead. Among companies that reported diminished profitability the last two years, inflation was by far the number one reason.

Beyond macroeconomic factors that are out of their control, the ongoing challenges of running a small business also weigh heavily. Data shows that nearly 90% of channel firms are small businesses, often with fewer than 10 employees and around $1 million or less in annual revenue. Yet the channel demonstrated its resilience and adaptability in recent years by focusing on becoming more efficient, cost-cutting where it made sense and maintaining an adequate cash flow and access to credit.

Among companies in North America, 90% feel good about the channel’s ongoing relevance. Responses were balanced between firms that believe the channel is relevant and changing rapidly (43%) and those that feel it is relevant and holding steady (47%).

CompTIA’s “State of the Channel” is based on a survey of 1,009 channel executives in North America, the United Kingdom and Ireland, Benelux (Belgium, Netherlands, Luxembourg), DACH (Germany, Austria and Switzerland), ASEAN (Thailand, Malaysia, Indonesia, Singapore, the Philippines, Brunei, Vietnam, Cambodia, Myanmar and Laos), and ANZ (Australia and New Zealand). 

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