Technology is bigger than food, at least from a profit perspective: Total supermarket sales for 2017 were about $641 billion, with restaurants earning $799 billion. The market for IT and communications goods and services? In 2017, $3.5 trillion and change.
But just like you don’t buy your milk direct from the farm, there’s a layer of professionals in between supplier and consumer in the IT world. Depending on the market segment, more than 60 percent of that $3.5 trillion flows through the indirect IT and telecom channel. For big vendors including Microsoft, Cisco, Sophos and VMware, the figure is closer to 90 percent. Comcast has thousands of partners selling its business-class services.
But judging by the coding initiatives that are all the rage today, you’d think that cranking out lines of Python or Java is the best route to a career in technology. And certainly, for those with an affinity for that sort of thing, development is a prime way to get a foot in the door. But it’s not the only way — by a long shot.
“The channel” is a blanket term describing a variety of business models. To use the grocer analogy, a local market might serve as a middleman for stock items, collecting a percentage of the sales price. But their most profitable offerings are usually those where the store contributes labor, such as preparing ready-to-eat meals or catering events. Similarly, an agent or consultant works with channel-centric suppliers like Comcast or Microsoft to sell customers the right hardware, communications services and software to run their businesses. Managed service providers bring the labor and expertise to secure and maintain endpoints and networks. This is a very general overview — there are entire dictionaries devoted to the finer points of everything from “the Amazon effect” (the disruption of B2C channels caused by online marketplaces) to “wallet share” (how much of an end customer’s IT spending goes to a particular partner).
It’s a big collective wallet. Analysts estimate that, this year, more than $1.5 trillion in tech goods and services will flow through the channel.
That’s a lot.
While there are plenty of channel partners who’ve been at this for decades, there are new opportunities opening up thanks to cloud and the concept of “everything as a service.” Jay McBain, principal analyst covering global channels at research firm Forrester, sees room for new types of partners, selling into niche markets and often without any technical expertise at all. There are a ton of possibilities.
“I watch the margins in SaaS business applications at 40 percent,” says McBain. “Millennials working at ‘shadow’ channel companies have figured out the new buyer and how to add value, and they’re making money hand over fist.”
The channel is going to take off, he says, growing by five to 10 times over the next three to five years. Millennial and Gen Z techies, marketing and sales pros and entrepreneurs are going to be a big part of that.
So, how do you get in on the action?
One of the largest independent channel events is coming to Philadelphia next month.
Channel Partners Evolution will take over the Pennsylvania Convention Center 4, with 3,500 members of the channel community coming together to learn, network and socialize. We’re bringing 150 or so suppliers looking for partners and more than 100 expert speakers. We have a special program for veterans and their spouses in collaboration with TrainOurTroops, a reception for first-timers at the Pennsylvania Academy of Fine Arts and a workforce of the future symposium put on by our Channel NX2Z group, which counts about 200 members, all under 35.
I am especially excited about a preconference business hackathon with content to help all types of small businesses succeed.
- Me2B: Why Personal Branding Is Essential
- Marketing With Purpose: Building Loyalty With Your Customers
- Developing a Winning Business Plan + Elevator Pitch
These will be held in a room overlooking the expo floor as it’s being built, so if you’ve ever wanted to see exactly how a massive conference comes together, this is your chance.
We’re pleased to count Technical.ly among our media partners and are providing 10 full conference passes for Technical.ly members to join us. If you just want to check out the Expo Hall, email email@example.com for the code for a free pass!
Oh, we’ll also have food, including cheesesteaks. Hey, I’m a tourist. Hope to see you there.-30-