IDC: Channel Set To Grow Faster Than Overall Market In Key Sectors

Channel partners are poised to outperform the overall server, storage and networking markets over the next year, grabbing 61.1 percent of the total IT spend by 2018, according to IDC.

North American channel partners will see a 2.7 percent compound annual growth rate in key sectors such as servers, storage and networking through 2018, according to a just released IDC report. That beats a 2.3 percent overall growth forecast for those same sectors over the same period.

The channel accounted for 60.6 percent of the 2013 indirect market in North America for servers, storage and enterprise networking, or $33.5 billion in spend. The indirect share of the IT spend for the same sectors will be worth $38.1 billion by 2018, rising to account for 61.6 percent of total spend, according to IDC.

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"We continue to expect the channel to play a critical role in the sale, delivery, and service of server, storage, and enterprise networking as is evident in the expected growth in indirect spend over the forecast period for these technologies," IDC Director of Infrastructure Channels Research Paul Edwards said in an email.

Key sectors such as cloud, converged and hyper-converged systems, hyperscale server farms and original design manufacturer (ODM) vendors are driving the markets, according to IDC.

"Channel partner success will be determined by the partners' ability to address the relevance and impact of these technologies on end-customer business issues," Edwards said.

Networking, according to IDC, will see disproportionate positive growth outpacing the server and storage sectors. Channel partners are expected to rake in $17.3 billion in sales by 2018, up from the $14.4 billion in 2013, according to IDC. That's a growth rate of 3.8 percent, compared to IDC's 2.3 percent growth forecast for all sectors for the same period.

NEXT: IDC: OEMs Must Engage Channel

Patrick Fuzer, business development manager at Atrion Communications, a Branchburg, N.J.-based solution provider focused on network infrastructure, said Atrion offers advantages OEMs don't, such as multi-vendor solutions.

"We work with Juniper, Riverbed, FireEye or Blue Coat to help customers with a whole solution and not just a piece of the technology puzzle," Fuzer said.

Building relationships is key to building a solid pipeline to more business within a company, he said.

IDC's Edwards said channel partner success, such as with Atrion, depends on a partner that can "bring to the customer a specific knowledge of who they are as a business and can apply that to recommendations."

In the case of Atrion, Fuzer said, the company drives sales by pairing its networking solutions with its FireEye Advanced Persistent Threat Detection and Prevention solutions.

Edwards said the complex nature of software-defined networks and converged infrastructure is driving more cooperation between direct and indirect sales for OEMs. The end result, he said, is OEMs such as Cisco, Hewlett-Packard and EMC are focusing on partner enablement to drive new sales opportunities for the channel.

"Enablement is the new currency for OEMs," Edwards said. "In order for vendors to get partners to scale around new technology, solutions and verticals, they have to provide a highly engaged enablement strategy."

That has included increasing the number of territory account managers and reps that work with partners in helping them achieve IT specialization within an OEM's solutions portfolio.

Dell founder and CEO Michael Dell, told CRN in an exclusive interview, it is the partner community that has become the biggest growth engine for Dell in the commercial sector since the company went private. The channel, he said, is growing faster than the direct side of the Dell house.

PUBLISHED SEPT. 25, 2014