New Canalys research, commissioned by Citrix, shows that security and the cloud are earmarked as the top two drivers of growth this year
At Citrix, we annually survey our valued channel partners across Northern Europe (in the UK, Ireland, Denmark, Finland, Norway, and Sweden) to gain as much insight as possible into their business projections, growth opportunities and priorities for the year ahead. This is carried out in partnership with technology market analyst firm Canalys and its Candefero community in preparation for our Partner Accelerator event series across the region.
I’m delighted to report that the findings of this year’s research are overwhelmingly optimistic and, above all, 91% of our channel partners say they are expecting to see a notable growth in revenue this year, compared to 2017. Almost one third (31%) are anticipating revenue growth of more than 20%, and 41% expect an increase of between 10% and 20%. The outlook for profit is just as promising with 87% forecasting growth this year, and of that 24% expecting to see an increase of more than 20% compared with 2017.
Much of this optimism can be attributed to the fact that our channel partners’ businesses underwent huge evolution last year, with 50% saying that they hired new technical experts, and 35% recruiting new sales people team members to support the sale of subscription-based services, such as managed cloud services. 2018 could be the year when they reap those benefits fully, with security (91%), cloud applications (89%) and cloud infrastructure-as-a-service (86%) earmarked as the top drivers of growth.
Services will be a key revenue driver in 2018
The path from IT reseller to Managed Services Provider is becoming an increasingly well-trodden one, and 76% of our channel partners cite managed services as ‘critical’ to their revenue this year, representing a 10% increase in importance since last year. Furthermore, 61% say that managed services are more profitable than selling hardware or software upfront within their business.
Revenue from the sale of cloud services is gradually on the rise among our partners, and 24% say that they expect 21%-30% of their revenue to be derived from this source in 2018. However, the delivery of cloud/hosted services from their own data centre or co-located data centre is down 7% on last year; only called out as important by 41% of our partners. Instead they are preparing for a moderate number of customers shifting to the public cloud this year, with 32% expecting 10-20% of their managed services business to be impacted.
What’s revealing is that 76% of those shifting to public cloud models have selected Microsoft Azure as their primary public cloud provider of choice, with just 11% backing Amazon Web Services (AWS).
GDPR is of utmost concern
Unsurprisingly, the incoming EU general data protection regulation (GDPR) which comes into force on 25 May, is preoccupying many of our channel partners, with 49% expecting it to have ‘significant impact’ on their business. Just 4% claim the regulation will have ‘no effect’.
While addressing security for their own businesses appears to be a focus for many channel partners, they also predict it will be a key driver of increased sales this year. A third (33%) expect more than a 20% year-on-year hike in security revenues.
Analytics is a crucial consideration
The trend towards humanisation of big data and data analytics seems set to continue in 2018, and 71% of our partners claim the sale of analytics will be important to their business in 2018. Alongside this, 78% believe expect big data and analytics technologies to undergo notable growth this year (compared with 63% holding this view last year).
What’s more, with some of the world’s largest entities investing heavily in AI, it’s reassuring to see that our channel partners are mindful of its significance in business. A respectable 42% say AI sales will be important to their business this year.
There’s little doubt that 2017 was a year of massive digital transformation, and this has led to increased dependence on our channel partners for their knowledge and expertise. Critically, the survey reveals that 85% of our partners’ customers are in varying stages of digital maturity, with many still defining their digital strategy investments, and it makes sense that our partners are forecasting an extremely optimistic year.
With that, I look forward to meeting as many of you as possible at one of our Partner Accelerator events, and planning for 2018 to be the best year yet!
To read an executive summary of this research, please click here.