COLUMN: Four Trends That Will Shape The Channel In 2024
As the year winds down, CRN’s Jen Follett looks in her crystal ball and predicts four ways the channel will be changed in 2024.
As 2023 winds down, it’s time to look ahead to the year to come and some of the many forces that will impact solution providers. With the push toward Everything as a Service in full swing and artificial intelligence on the cusp of becoming mainstream, high-margin, high-value opportunities abound for solution providers willing to evolve to meet them. As the challenges facing IT departments become even more complex, technology vendors are recognizing with increasing frequency that the channel provides the key to building the solutions customers require to grow sales and beat the competition. Here are four ways the channel will be changed in 2024.
1. The pace of partner business model evolution hastens.
Almost every solution provider out there is assessing the strength of their business and making decisions on which levers to pull across three major vectors: revenue mix in terms of product vs. services, services mix in terms of project-based vs. recurring revenue, and strategic value in terms of providing traditional elements such as procurement and IT integration vs. strategic engagements in areas like digital transformation and delivering business outcomes. As the market continues to rush toward cloud and as-a-service offerings, the speed at which partners will be adapting to stay ahead and trending toward high-value solutions will only get faster. While there is no one-size-fits-all “right” answer, the most progressive partners are looking for ways to provide high-value outcomes in an Everything-as-a-Service model. Expect to see more vendors moving in that direction as well, even if it means pushing some solution providers faster than they want to go.
2. Artificial intelligence becomes unavoidable.
You’ll have to bury your head pretty deep in the sand next year if you plan to ignore the impact of AI, particularly generative AI, on your channel business. The technology is being embraced by vendors across the industry, and customers are clamoring for help on how, where and when to implement AI to gain a competitive advantage. Solution providers with AI expertise will be perfectly positioned to provide that guidance, and vendors know it. Look no further than the cover story of this December issue for a closer look at the faith Google Cloud CEO Thomas Kurian has in the channel’s ability to deliver AI success for his business. Solution providers will also be ramping up on incorporating AI into their own operations in areas like helpdesk automation and marketing.
3. Public cloud providers deepen their channel ties.
The big cloud players will take steps to boost partner engagement, with a focus on building profitable partnerships. Where historically they have zoomed in on just a small handful of their top partners, the new year will see them putting more emphasis on a broader array of solution providers. A big piece of that partner puzzle is getting more partners to leverage the cloud marketplace to accelerate sales growth. Cloud vendors will take steps to address marketplace gaps, expanding partner engagement, partner enablement and MSP programs.
4. Channel ecosystems gain ground.
Another trend we’re following is the rise of the channel ecosystem, which gained a lot of ground this year and will continue to do so in 2024. This is reflective of the way many vendors’ channel organizations, including Dell Technologies, Hewlett Packard Enterprise and Palo Alto Networks, have been expanding their definitions of “channel partner.” In CRN’s 2023 Channel Chiefs project,48 percent of the honorees said they have transitioned to an ecosystem model. This means vendors are looking at multiple partner types—solution providers, cloud solution providers, ISVs, SaaS providers—under that channel umbrella. One of the key questions emerging is how all of these different types of partners will be compensated and what the rules of engagement will be. With the ecosystem model in full swing, it’s more important than ever for vendors to communicate clearly and loudly on where partners need to play to get the biggest incentives and benefits. No matter which of these trends you take advantage of to better serve your customers, one thing is certain: There has never been a better time to be a solution provider. Here’s to your success in 2024!