Equinix today published the findings of an independent survey exploring the views of senior enterprise IT professionals on the future of the channel industry. The results show cloud is now the number one driver of channel engagement, with almost half (48%) of the 836 EMEA IT decision-makers surveyed, using the channel to access cloud-based services. 7 out of 10 (68%) IT decision-makers work with multiple public cloud providers, with half (50%) of IT decision-makers are solely utilizing private cloud and almost a quarter (24%) deploy a multi-cloud model.
With Gartner highlighting that by 2025, 80% of enterprises will migrate entirely away from on-premises infrastructure to colocation and the cloud, these findings suggest companies are utilizing the channel to reduce the complexity of such a critical infrastructure upheaval. Along with the shift driven by cloud, the study highlighted other areas where services traditionally managed in-house are beginning to move to the channel.
Security management – an area that enterprises have previously been reluctant to outsource – was the second highest-ranked service for which channel partners are being utilized, named by 39% of respondents. More than one-third of decision-makers (34%) are using channel partners to access interconnection, making it the third-highest priority service – an ongoing trend that is reflected in the growth of Equinix’s own Channel Partner Program.
Jeroen Schlosser, Managing Director, Equinix, MENA, said, “Analyst firm IDC has stated that at least 30% of Channel industry players will not exist in the format we know them today by 2021. As the findings of this study suggest, many of these changes will be driven by cloud, and it will be the Channel players that are agile and respond to these changes, that will survive and thrive.”
Enterprise IT decision-makers were also asked why they choose or might consider working with Channel partners. Cost was the number one priority across almost every market, with over half (53%) of UAE IT decision makers overall stating they choose to work with Channel partners because it’s more cost-effective than other routes to market. Being able to access a better breadth of services came a close second (46% of respondents overall), with enterprises in the Netherlands and Turkey naming this as their main reason for working with Channel partners, while convenience was the key driver for decision-makers in France.
Highlights/Key Facts
On average, enterprise IT decision-makers across Europe spend just under a quarter (24%) of their budget with the Channel. In the UAE, this figure is more – IT decision-makers spend, on average, 42% of their IT budget via partners.
The average number of channel partners engaged per enterprise across EMEA is nine, although this varies significantly by country. France and Germany are both above average with 12 and 11 channel partners per enterprise, respectively, while the UK and Finland are the countries where companies work with the fewest Channel partners on average. In the UAE, almost half (47%) of IT decision-makers work with more than 4 channel partners.
The multi-partner use cited by respondents shows a need for vendor-agnostic platforms that enable businesses to address IT challenges in today’s digital economy. Equinix’s Channel Partner Program is based on joint value propositions developed together with partners. Resulting solutions utilize the technologies of multiple vendors and the unique skills of the partner to comprehensively meet customer requirements. This collaboration is critical for success as the channel industry shifts in line with new enterprise needs. This is particularly noteworthy given the findings in Equinix’s third annual Global Interconnection Index (GXI Vol.3), a market report which this year shows that interconnecting to multiple providers across multiple edge locations is the most prominent use case for interconnection bandwidth and is expected to grow 4x by 2022. Almost all (97%) IT decision-makers surveyed in the UAE consider interconnection to be important to their business.
In the UAE, a majority (54%) of IT decision-makers that currently use Channel partners do so for cloud services. However, a larger majority (60%) of those that do not currently use partners would consider using them for security management services. Interconnection services is the second most common service that IT decision-makers use/would use a channel partner for, at 47% and 50% respectively.
Nearly 4 in 10 (38%) respondents across EMEA highlighted that channel partners have room to improve in providing seamless solutions that are easy to implement without disruption to enterprises. This need is only going to continue to grow with the expansion and complexity of enterprise infrastructure. The GXI Vol.3 shows that to manage increasing volumes of data, enterprises are on average deploying in 9 locations, with a total of 340 interconnections to networks clouds and business partners.
Having a good understanding of customers’ business and budget was also highlighted as an area for improvement for channel partners according to one-third of respondents overall; this was highlighted as the key area for improvement by respondents in Turkey.
4 out of 10 (42%) UAE IT decision-makers believe their channel partners are currently missing a clear sales process, and over a third (35%) think their partners are missing a support structure that helps develop knowledge of products and services.
When asked about what will differentiate channel partners and lead enterprises to work with them, quality of service was universally named the most important differentiator by all of the 8 surveyed markets, with 52% of responses overall. Demonstrating an understanding of the customer’s business was the next most important (33% of respondents).
Oren Yehudai, the Senior Director for EMEA Channel Sales at Equinix, said, “The move to the cloud has been incredibly exciting to see. By 2021, European spend on cloud will hit £100 billion. Enterprises must make critical decisions on IT infrastructure as they adopt cloud services or fail to compete in the digital economy. The speed of demand and consumption of cloud services is both a huge opportunity and a threat for many resellers. Channel players have to be ready to support this, and for many that means making significant changes, from accelerating the development of consulting and ‘cloud-complementing’ services to adapting to a monthly billing system or changing compensation plans to match new purchasing patterns.”
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