Study: Solutions Providers See Higher Revenues, Improve Operations and Performance
A new report by the 2112 Group reveals the IT channel is growing at double-digit rates for the fourth year in a row, increasing revenue and profitability while simultaneously improving business operations and performance.
The 2112 Group’s 2015 Channel Forecast report concludes an increasing number of resellers, integrators, and services providers are becoming more efficient, adopting better business practices, and exercising greater discipline in their operations. This is resulting in higher growth and sustained profitability and projected positive returns in 2015 and 2016.
Examining factors including gross sales and revenue, profitability, operational models and identifiers, business management acumen and planning, organizational composition, and sales and general channel trends, the report provides insights into the general health of the channel and predicts future performance.
The study finds that the channel increased revenue from 11 to 15 percent, and that between 2010 and 2014 the average solutions provider had expanded its gross revenue by 50 to 75 percent.
But the channel isn’t just expanding; it’s improving both its capabilities and value. The study finds “the channel is getting smarter, more efficient, and more effective.”
“The 2015 Channel Forecast provides an in-depth look into where the partner community is today and where they’re going, and we’re seeing general improvement in operations, performance, and potential across the board,” says Lawrence M. Walsh, CEO and chief analyst of The 2112 Group. “The improvements in business management, focus, and performance show solution providers are heeding the message to evolve their businesses to meet the future demands of the technology marketplace.”
The report also revealed some challenges facing the channel as well, including increasing difficulty adapting to emerging technology and business models. The most significant red flags, the study states, are a “continued decline in channel start-ups and the low growth expectations set by solution providers.”