Comms Dealer research has crystallised a critical question facing the channel: To what extent does the channel ecosystem need to work closer together to unlock current and future market potential? To address these pressing issues, Comms Vision thought leaders doubled down on how the channel could be far more effective at converting market opportunities into sustainable, differentiation-led growth.
We know from our research that many channel companies may fall behind and be less able to react to what’s coming next unless knowledge share challenges are addressed, wider opportunities are embraced and the channel ecosystem becomes more tightly interconnected. And during the Comms Vision Technology and Markets Insight session thought leaders discussed the technology and partnership levers that may need to be pulled to create long-term growth by closing the technology and go-to-market gap.
That 60 per cent of the business leaders surveyed do not feel they are maximising growth opportunities in their own back yard represents an opportunity for upstream suppliers to rethink partner engagement models and align their product strategies, roadmaps and support mechanisms more closely with partners.
The need for upstream suppliers to provide leadership and direction, and become a better match for partners in terms of driving channel growth, is crystal clear. "Busy entrepreneurs don't always have the space to step back the way we do, spend time with markets and analysts and understand technology trends," stated Nathan Marke, Chief Operating Officer, Giacom. "We have an important role to play in condensing all of this information and communicating that through to channel businesses. We've got to find the growth now and chase it. It's our job up the chain to feed that information through."
There is a general consensus among thought leaders that the mismatch between vendor messaging and what many partners are actually experiencing is impacting growth, largely caused by low levels of education delivered via vendor-partner engagement. "The job of the channel is to make sure we are empowering resellers with the information they need to talk to their customers," added Matt Worboys Business Development Director, Gamma. "Resellers want to know what's in it for them and how to take products to market. These products are largely the same – the value is in empowering resellers and making it simple for them."
These issues provide food for thought, not just for ICT resellers and MSPs, but also for technology vendors because, on another level, taking new products to market is a complicated process. "There is a big difference between a product being launched and truly embedded," commented Neil Wilson, Chief Product & Marketing Officer, TalkTalk Wholesale Services. "You can get new products over the line and technically out, but with a channel community there's a lag between a product being launched and sales teams being confident with it. This takes time and patience. Sales people generally don't like leaving their comfort zone and we have to empower partners to overcome that challenge."
Turning to current tech opportunities, Gavin Murphy, Propositions Principal, BT Wholesale, observed that the majority of the market has adopted cloud services. "But how many are truly generating the value that cloud can provide?" he asked. "For example, most resellers are not selling analytics, therefore customers are not getting the information they need to make informed decisions and maximise their cloud services. As an industry we can get carried away with technology and the future, yet we have great technology here and now that businesses can actually use."
We've got to find the growth now and chase it. It's our job up the chain to feed that information through
That said, our survey found that many reseller/MSP business leaders are open to new ideas about technology and product innovation, with 63 per cent planning to move into a technology market not yet addressed by their business. Significantly, and symptomatic of broader issues, 5G did not feature at all in their planning. Emma Keedwell, Head of Innovation, Vodafone Business, noted: "As an operator, we need to share more stories around our trials and where we are delivering 5G, but also be honest about some of the challenges. With the channel being so close to end users we also need to hear from them to understand more about their customers."
Keedwell reported that 5G is on top of all businesses' minds and will unlock a transformation with throughput application being better and faster, while some areas of business 'will be unlocked in ways that we don't know'. "The application for 5G is relatively early so we need the channel to help us prioritise by industry and vertical the top three uses cases. That's the opportunity."
Murphy cited end user research undertaken by BT in which 70 per cent of businesses said 5G is 'absolutely critical'. But despite this apparent demand, the message is yet to land as a real opportunity for the channel. For future 5G potential to be realised it seems that the free flow of important information must be a two way system between resellers and vendors, which is likely to be a challenge in practice. "I don't understand the value proposition for 5G into SMB," stated Marke. "That's fundamentally one of the problems. We see case studies coming through about network slicing for large enterprise applications, but for most of our SMB customers it doesn't mean anything. That's the issue."
Paul Heritage-Redpath, Head of Products, CityFibre, added: "If you look at the UK business market, the vast majority is SME. The good news is that we are all pretty good at doing the core connectivity, but 5G isn't featuring highly because manufacturers are struggling to articulate a use case for most of the UK's SMEs. That's not to say it won't come. The power of story telling is where the channel is brilliant. That's where we can all focus again. From a product perspective you start with the customer and the problem they are trying to solve and offer a solution. You should never fall into the trap of thinking you have a cool widget then ask what you can do with it."
There is progress, but also a long way to go for everybody suppliers to underpin partner and customer success
Resolving this conundrum could unlock significant opportunities for many channel companies. This also holds true for upstream suppliers who grasp the nettle and put their shoulders into better enabling channel partners. "We know the world is changing, we know channel partners are being asked to go broader and deeper and to provide one-stop-shops and do a lot more," said Marke. "Yet most of these businesses are quite small, sub-£10 million and can't afford big contract teams. So the responsibility is on us if we are going to make this work. We need to make this as easy as possible for partners and give them confidence. They have the best sales teams out there."
Wilson added: "We have a huge amount of expertise that's never been turned into something that the channel can use. For example, security is a tough market to get into but we have strength and depth in delivering that to the channel as a managed service that's white labelled. We are working on an overlay play."
These knowledge gaps prompt the question of whether markets, customers and partners are being underserved. And if they are, what's the implication for channel players? Furthermore, the shelf-life of a channel firm unable to provide the full product and service suite, today and tomorrow, may be getting shorter. There is clearly an opportunity for upstream providers to truly provide leadership and get more strategic with their channel strategies. "We as a vendor have to enable confidence and competence and give all our teams, and our customers' teams, everything they need to be successful," commented Murphy. "There is progress, but also a long way to go for suppliers to underpin partner and customer success."
That innovation drives growth is not in question, but there is an another issue around how the channel leverages innovation and brings growth potential to fruition. "It's far easier for us to innovate than the OTT players," stated Keedwell. "The world is changing, people are subject to competition law and it's difficult to understand how best to innovate. If we really work together we can understand which technologies our customers want and how they are going to use them. We must spend more time with the channel to understand what they can add to core products. It's about cementing the partnership."
The shelf-life of a channel firm unable to provide the full product and service suite, today and tomorrow, may be getting shorter
Closer, more interactive partnerships are key because validating market opportunities is a challenge for many resource strapped channel companies, and unless this gap is bridged the status quo will persist. In this context, Marke hammered home the point and reiterated the criticality if knowledge sharing. "We have lots of data about where the growth categories are and we need to share that better," he said. "For example, if you look at SMB wallet share, about 40 per cent or less is in telecoms and 60 per cent is in IT managed services. The fast growth categories are cloud, infrastructure, platforms and SaaS, particularly in SMB around infrastructure software where there is high double digit growth. All of these environments need to be secured so there is growth in security. The good news for the channel is that all of this needs to be built and run for SMBs. If you get it right there is a massive opportunity to grow – and you will be the one customers want to talk to about AI in the next round."
In terms of where growth will come from, Worboys pointed out that Microsoft intends to take 'massive share' in the SMB space. "So think about how you can add value around that, whether licensing, voice enabling or the peripherals," he said. "Mobile and IoT will be a significant growth area for Gamma over the next three to five years. And in the SMB area we're increasingly seeing consumers demand enterprise class functionality when communicating with SMEs, therefore they need to operate and respond with products that enable them to deliver on expectations. Customer experience in the SME sector is key. But the enablement piece is where the true value lies, that's the biggest growth area within Gamma. It's our responsibility to make sure we are providing partners with the right tools."
Heritage-Redpath highlighted the 'huge opportunity' for partners to get the basics right with connectivity across the UK. "You get the solid foundation in and then layer up services," he added. "If you spin the story you will win big time in this market."
Closer, more interactive partnerships are key because validating market opportunities is a challenge for many resource strapped channel companies, and unless this gap is bridged the status quo will persist
For Murphy, a big narrative is the full fibre story which is entering a new chapter. "The exchange closure kicks off in anger soon," he commented. "Stop-sell happened in September and the next two stages are on plan to deliver... we have stop-serve at the end of 2025 and complete closure in 2030. Analysts are saying that organisations with above average copper-based services could potentially impact their risk profile for private equity investments. It's therefore important to focus on having an above average FTTP base and migrate customers to drive value."
Ultimately, being competitive and driving growth means having the agility to respond effectively to the evolving market, and for resellers and MSPs this in large part hinges on their technology propositions and capabilities. But a lack of skills, a need for support, and a lack of market knowledge and product leadership is hindering growth. On this point, Wilson emphasised: "Partner enablement is not a one-off exercise. When you're taking people into new areas, giving dedicated focused support over time to grow confidence is key."
More key points to consider
Paul Heritage-Redpath, Head of Products, CityFibre
We have a once in a lifetime event where every customer has to do something and we need to gear up to support all of those businesses.
Emma Keedwell, Head of Innovation, Vodafone Business
You can't get away from verticals. People buy and use technology differently and there are vertical nuances in how simple technology is used. All government funded bids are coming out in verticalisation. If you can, celebrate it. If not, try it.
Neil Wilson, Chief Product & Marketing Officer, TalkTalk Wholesale Services
It can be tremendously powerful when you own a vertical, speak the language and be at the core of it. But getting there requires a lot of investment.
Matt Worboys Business Development Director, Gamma
Our job is to support the channel to get into verticals, help them get on the frameworks, help with marketing literature so partners are talking the right language with pricing that works.
Gavin Murphy, Propositions Principal, BT Wholesale
As an industry we don't make it easy. We love acronyms and no-one is challenging the TLA attitude. That means we don't follow through with value-based outcomes that impact the end customer.