'Bullish' channel expecting profitable growth in 2016

Security expected to be the strongest section of the market this year, Canalys survey shows

More than two thirds of channel partners are expecting to achieve profitable growth in 2016, according to a Canalys survey, which tips IT security as the hottest market of the year.

The analyst recently surveyed 260 IT channel partners around the world and 75 per cent expected to see their top lines soar this year, with 70 per cent of those surveyed expecting it to be profitable growth.

While sales opportunities "remain abundant" in most sectors of the industry, security will see the strongest growth, Canalys said, after 87 per cent of its survey respondents said they expect sales in the space to grow annually this year.

IT security has become a mainstream consideration for a huge number of customers after high-profile security breaches at big companies hit the headlines.

Canalys analyst Jordan De Leon said the technology will become more important to customers in the future.

"IT security is already the number-one priority for end customers, and is only going to grow in importance as they invest in next-generation datacentres, digital transformation, cloud, mobility and IoT," he said. "But this also illustrates the complexity of the security landscape.

"To capitalise, partners will need to develop much greater levels of expertise.

"Partners that build a powerful security practice, backed by a strong reputation, will find plenty of opportunities in a world that is unfortunately plagued by many threats."

Elsewhere in the Canalys study, two thirds of respondents said managed services are now more profitable than product reselling, and less than one per cent of partners predict some form of exit in the near future, which the analyst said represents a "bullish channel".

But global uncertainties such as terrorism, political turbulence and currency changes mean partners are less optimistic now than they were a year ago.

"The channel needs to address both new buyers within existing customers - application developers and lines of business, for example - as well as casting sales nets wider to attract completely new customers," said Alastair Edwards, Canalys' chief analyst.

"But new competitors are emerging in the channel, from cloud-only resellers to digital consultants serving specific verticals, such as banking and healthcare. These companies are application-literate and professional services-led. They are helping customers solve business issues, not just selling technology. Channel partners must invest in developing their own vertical and pre-sales capabilities here to stay ahead."