TORONTO – Cloud may not be a dominant revenue source for partners yet, but it is the fastest growing, and IDC Corp. has identified the seven factors common to higher revenue growth partners.
In a presentation to seminar attendees on Wednesday before CDN’s annual Top 100 Solution Providers gala, David Senf, vice-president of infrastructure & cloud with research firm IDC Canada, painted a picture of the average Canadian channel partner and shared insight on where the market opportunity in Canada is going.
According to IDC’s survey data, the average channel partner in Canada has been in business for 12 years and is deriving 28 per cent of its revenue from the cloud today. They expect half of their revenue will continue to come from traditional IT has cloud sets in over the next two years, and the amount of revenue that partners earn from services increased by 20 per cent over the past year.
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Senf said the growth for partners is coming from what IDC is referring to as the third platform of mobility, big data/analytics, social business, and cloud. The first platform was centralized IT, and the second decentralized IT or the LAN/Internet and client/server era. IDC also calls the third platform democratized IT. While the majority of spend is in legacy areas, the third platform will see the majority of growth.
“More than 80 per cent of growth is coming from the third platform but 75 per cent of the spend is still in the first two (platforms) but the problem is, there’s no growth,” said Senf.
When IT execs were asked their top IT concerns for 2015, Senf said ensuring the security of company data reached the top spot for the first time, bumping responding to business change for the first time. Improving business processes, managing IT complexity growth and integrating new apps into legacy systems rounded out the top five.
As for the cloud, Senf said the transformation is underway. Cloud services was a $1.9 billion market in 2014 that IDC project to reach $3.9 billion in Canada by 2018. SaaS will still be dominant in 2018 as a $2.3 billion market, followed by private IaaS at $677 million. Public IaaS and PaaS will also be strong opportunities.
Senf added private hosted cloud is considered a higher opportunity than public cloud, and private on-premise cloud is not showing as much focus as previously predicted.
For partners that have successfully made the transition to the cloud, Senf said they succeeded in part because they had a plan, and IDC has identified seven factors leading to higher revenue growth among partners:
- Plan: Plan your next move carefully along market and compete trends.
- Invest: Train your staff and build your business around your plan.
- Endure: Change can be difficult, so be ready to withstand longer sales cycles as you complete your transition.
- Diversify: Expand your offerings across services, the cloud, and software, as applicable.
- Extend: Moving your business into new industry verticals and different sized clients so you’re less reliant on one market.
- Be Creative: Be open to new trends, finance models, and marketing approaches.
- Be Optimistic: Look for revenue opportunities in areas where your slower growth competitors aren’t looking.