Solution providers have a generally middle-of-the-road opinion on the state of the North America economy. More than one-third of surveyed solution providers believe the economy is healthy and stable, but only 10 percent believe the economy is expanding. Another one in five believes the economy is unhealthy or deteriorating.
In the 2016 Midyear Channel Performance Report, solution providers reported that their year-to-date revenue and profits are trailing the same period in 2015. Further, average deal values are down more than 10 percent, and sales cycles – the duration between first customer contact and sale closing – are getting longer.
The channel and technology market’s economic climate isn’t entirely bad for all. The bright spot is that the channel is fully immersed in automated services, such as managed and cloud services. The average solution provider is earning more than one-half of its gross revenue from automated services, and those with that focus are generally growing faster and have higher profitability than businesses dependent on product sales for their earnings.
In this report, 2112 details its general economic conditions and the outlook of solution providers through the first half and end of the year, as well as the indicators that are driving or inhibiting growth.