Report: 78% of channel partners have “more to do” in shift to services and subscriptions

LONDON, UK – 22nd March 2023 – Westcon-Comstor, the global technology provider and specialist distributor, today published Navigating the shift: The role of distributor marketplaces in Partner Success. The report conducted over the last three months reveals that while almost every channel partner is shifting to subscription and recurring revenue models, the vast majority say they are facing myriad challenges and have more to do to make the shift.

The report, based on a survey of almost 300 channel partners in the UK and Australia, explores the challenges of a changing market and business models, looking at both macroeconomic factors and changes specific to the channel—plus what is needed from distributor marketplaces.

Despite a challenging environment, most channel partners have started their migration to subscriptions and services. Only 21%, however, say that they have gone as far as possible. This leaves the majority, 78%, part way through this journey and facing a variety of challenges in realising full migration.

With the shift to subscription and recurring revenue models comes complexity, and this is reflected in the challenges partners face. Just over half (52%) cite the need to manage a complex multi-vendor portfolio as the biggest challenge they face.

Channel partners are looking to distributors, and in particular distributor marketplaces, to help overcome these challenges. 60% believe that a single platform to buy hardware and software will help accelerate this shift. Yet today less than half (49%) of partners are using distributor marketplaces.

Those partners who have started to use distributor marketplaces cite self-serve stock availability (49%), online ordering (49%) and pricing (42%) as the biggest advantages and are looking for better access to customer data (55%), market data (39%), and customer success training (46%). There is a promising opportunity for distributor marketplaces to offer a richer set of services and capabilities than what is being provided today, that will truly help them on their growth path within this new model.

“We see the B2B world evolving much as the B2C world did. We all know how important marketplaces, e-commerce and digital interfaces have become,” said Patrick Aronson, CMO, Westcon-Comstor. “Our experience is that channel partners are keen to modernise and embrace the recurring revenue and subscription business model. It’s great to see the dynamic and forward-thinking partners we know reflected in this report. As a distributor, insight into the challenges our partners face is key to creating the right marketplace solution they need to serve their customers as best they can.”

“We’re operating in an industry with a lot of underlying legacy hardware. It’s been trusted and relied upon for a very long time,” said Dan Davies, CTO, Maintel. “This means that the shift to cloud and subscription-based services has not taken place overnight. But as technology ages and our customers continue to demand more capability and flexibility, this is the journey we’re on.”

“A distributor marketplace that can truly help us manage the complex multi-vendor environment we operate in would be highly beneficial – not only for managing our complicated technology purchases, but for helping us deliver long-term business growth,” said Mark Loparow, Director of Business Growth, Truis. “Plus our teams have different needs so breadth in capabilities is important. Simplified sales processes, self-serve capabilities plus the data insights and information we need to achieve Customer Success; now that would be a game changer.”

The full report is available here https://westcon-comstor.foleon.com/channel-research-report-2023/navigating-the-shift/.