There is a sense of impending doom in the air. Inflation has reached a 40-year high. Interest rates are rising. Gas prices have skyrocketed. The Russian war continues. COVID is still alive, but humanity has had enough. Employees in hospitals are exhausted. The unemployment rate has dropped to an all-time low. Hiring people is a significant challenge. The supply chain is off the rails. Corporate profits are at the highest level that they have ever been. Air travel is insane with many cancelled flights and airports cannot even process the volume of travelers. Renting or purchasing a car is so much more difficult and expensive. The housing market is shaky. Then there’s the widespread resignation of workers looking for a better work-life balance.
Vendors in the channel are racing toward a subscription/consumption model. Consolidation of distributors, vendors, and managed service providers (MSPs) is accelerating. The adoption of cloud computing appears to be unstoppable. Marketplaces are becoming increasingly popular. Digital transformation is the new business norm. Cyber attacks are increasing in frequency and sophistication. AI is becoming more common. Vendors are transitioning to a new partner reward model (example Microsoft). To automate all transactions, channel automation is following in the footsteps of the bank’s ATM/online playbook. Any contract you have with vendors is only valid until they sell to someone else. Evergreen revenue is no longer guaranteed. A large portion of the current channel is approaching retirement age, with few prospects for business continuity. Younger generations are taking over, bringing different purchasing and collaboration experiences with them.
Economists are sounding the alarm! A recession is on its way.
BUT, unemployment is at its lowest point in history. Employers cannot find qualified candidates. Profits for corporations are skyrocketing. The supply of housing is far insufficient to meet demand. Interest rates remain relatively low. Automobiles are being sold at the manufacturer’s suggested retail price, and restaurants and cinemas are filling up. Travel is way up and to a point where airports cannot process the volume. Seems like disposable income is up since people have been saving money for a few years now, and working from anywhere reduces employee costs. The GIG economy is gaining popularity as people explore entrepreneurship.
All of these factors are quite unusual in a “recession,” so what exactly is going on?
Perhaps it’s similar to what the GPS says when you get off course “recalculating”. “Is the market recalculating itself for a new normal? Looks like we are on for some off-road detours so buckle up and we will eventually get back on track to our destination.
The street’s reality. The majority of the channel partners with whom we speak are profitable to extremely profitable. Most vendors are rapidly expanding, particularly in cybersecurity, cloud, digital transformation, and SaaS. With millions of open job positions and a high demand for cybersecurity professionals, the only way forward is to do more with less (smart automation). Digital marketing is critical in a digital-first economy.
If data is the new oil, then artificial intelligence is a data refinery. Understanding the needs of your customers is critical to long-term success. Channel partners will have to become Digital Transformation Advisors. There are already 200,000 SaaS vendors and numerous marketplaces, all of which are growing the ecosystem.
Many of these topics and more were covered in the 60-minute video. Take a look… Find out how the panel rates the current state of the channel and weigh in.
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