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Services breed confidence

Inaugural Agilitas Channel Confidence Index reveals managed service providers to be most optimistic about the future

In November, Agilitas produced its inaugural Channel Confidence Index measuring how confident channel decision-makers are about the future of the IT channel. Based on the responses of 250 decision-makers in UK businesses with an annual turnover of more than £5 million, the confidence barometer registered an overall reading of 7.6 out of 10.

Agilitas reached this figure by consolidating ratings for how confident channel organisations are about the impact of a number of distinct trends, including globalisation (7.8 out of 10), business transformation (7.7), innovation and disruption (7.7), regulation (7.4) and political factors (7).

Even these confidence readings are averages that hide the diverse views of respondents from different types of organisation, including IT distributors, MSPs, independent software vendors, IT resellers and general technology solution providers.

Below, Agilitas Marketing Director Richard Eglon dives deeper into the findings to see what else they tell us about the IT channel in 2020.

Throughout our research, we found a general trend towards higher levels of optimism and confidence among managed service providers (MSPs). They gave significantly more confident answers to our questions compared to other channel businesses.

IT resellers were typically the least confident respondents, with independent software providers, IT distributors and general technology solution providers in the middle, all with the same average level of confidence.

This reflects major trends within the channel industry. ‘As-a-service’ and ‘as-asolution’ models are becoming more and more popular and are often seen as the best way for channel companies to add more value to their products and to turn one-off transactions into recurring revenue streams.

Meanwhile, more vendors than ever are starting to go direct to the end-user so that distributors and resellers are having to reassess their relevance. It can be hard for these businesses to see how they can bring more value to partners and customers than the vendors themselves.

Embracing change
Despite these challenges, our survey shows that channel businesses embrace change and even thrive on it, often dictating the terms of change themselves, for example, by embracing transformation in their business or choosing to operate internationally.

Over half of the decision-makers we surveyed felt extremely positive about embracing new global markets, with MSPs, once again, being by far the most confident.

That said, responses to the same questions in 2018 (which were not translated into an overall Channel Confidence Index) showed higher levels of confidence and optimism about globalisation than this year’s, with more decision-makers feeling confident about expanding their businesses into new international markets. This might reflect the political changes that have occurred over the last 12 months.

Transformation is another key strategy of the most successful channel companies and one that most have already embarked upon.

Companies that are looking to succeed in today’s competitive environment need to take account of the changes and challenging times they will face now and in the future and may well need to transform their own business models to ensure they have the agility and flexibility needed to meet customer demands.

The vast majority of companies we surveyed expressed high levels of confidence in strategies of transformation. Indeed, more companies feel confident in business transformation now than they did one year ago.

Transformation is particularly relevant for businesses that feel less confident about their place in the future of our industry, with resellers and distributors transforming their business models in order to provide more ‘added value’ to partners and customers and remain relevant to their changing needs. This can be done by bringing additional skills inhouse and creating new departments or by collaborating with external partners.

While the channel faces many challenges today and in the future, what is most striking about the 2019 Channel Confidence Index is the overwhelming positivity and confidence expressed by decision-makers. It will be interesting to see how attitudes change in future editions of the Index.

About Agilitas
Agilitas IT Solutions Limited is a leading provider of customer-driven IT channel services. For nearly 30 years, the Nottingham-based company has been helping major OEMs, IT resellers and managed service providers extend their service capability and improve service levels to customers. Agilitas manages spare parts inventories across server, storage and networking technologies and delivers complementary technical services to customers in 60 countries, including cloud services, technical training, technical support, product repair and specialist engineering resource.

Other findings

*Bigger companies are generally more optimistic when it comes to the future of the IT channel. Decision-makers from companies with more than 500 employees gave an average confidence score of 7.9, while those from companies with under 50 employees gave an average of 6.3.

*Since 2018, the channel has become more optimistic about its future, with 48.8% of respondents choosing either a 9 or a 10 on the optimism scale, compared with 39% in 2018.

*The proportion of respondents who feel pessimistic has shrunk from 14% in 2018 to just 2% now.

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