Embracing the Future of Specialized Channels

Embracing the Future

The IT market may not be thriving currently when it comes to growth, but technology trends such as cloud and mobile computing, Big Data, and IoT are giving rise to a specialized channel and emerging revenue opportunities.

By Larry Walsh

IT spending is flatlining. Businesses are doing more with less, stretching the service life of equipment and extending utility resources with new software-based technologies. Depending on which market analyst you follow, the IT market is either contracting by as much as 5 percent or growing at rates under 3 percent. Either way, the IT market is firmly in an era of anemic growth.

At the same time, technology trends are reshaping the way we buy, consume, and value technology. Cloud computing and mobility are the most obvious. Businesses are shifting more resources – and spending – to cloud-based infrastructure and services. Users are increasingly using mobile devices as a primary computing means.

But there are other trends too. Big Data is turning zettabytes of dormant information into actionable intelligence. Automation is improving efficacy and lowering the cost of manual processes. Cognitive computing and artificial intelligence are transforming the way we research and make decisions. And, of course, the Internet of Things (IoT) is converting billions of dumb appliances into persistently connected smart devices.

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These trends aren’t just pushing the market into new technology domains; they’re also expanding the total addressable market, opening new revenue opportunities for technology vendors and resellers. As more technology finds its way into traditionally non-technology domains, the market will need more technology to support and enable its smart systems.

Here’s the rub: The traditional reseller isn’t necessarily going to get vendors into these new markets.

The 2112 Group, in conjunction with Baptie & Co., spent the past six months studying the evolution of what we call “Specialized Channels,” routes to market through partnerships with companies that have deep connections and instructional knowledge of their specific markets. And, in many cases, they’re not technology companies or businesses that have native technology capabilities.

New partners are medical practitioners and medical equipment manufacturers, accountants and financial services firms, earthmoving equipment producers, carmakers, fitness professionals and gyms, brick-and-mortar retailers, hoteliers, office furniture dealers, and scores more. Specialized Channel partners include anyone who interacts and talks with customers in their native vertical language.

Through our research of dozens of Specialized Channel programs, 2112 identified four different types of partners.

  • Specialty Resellers: Vertical resellers with domain expertise in a specialized field. They are what we currently consider technology resellers, but include non-technology resellers of non-technology manufacturers.
  • Designers: Consultants and systems builders with domain expertise that design infrastructure and services based on vertical knowledge.
  • Domain Services: Professional service companies that incorporate technology products and services into their operations for greater efficiency and effectiveness.
  • Complementary Technologies: Vertically aligned or embedded technology and non-technology companies that incorporate the technology of hardware and software vendors into their products.

Specialized Channels share many characteristics of their IT counterparts, but they differ in many ways too. They have different needs and expectations. They deliver and measure value differently. And they have significantly different languages and views of the world.

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The 2112 Group charted the Specialized Channel in a new report, “Understanding and Leveraging Specialized Channels,” which goes into detail on defining Specialized Channels and how they differ from traditional channels; the market trends driving Specialized Channels; the needs of these new channel partners; the value attained by vendors in Specialized Channels; and strategies for engaging Specialized Channels.

The 2112 Group’s “Understanding and Leveraging Specialized Channels” report is now available via the 2112 library. Download it today.

Unlike other channel trends that erase the past, the rise of Specialized Channels is enhancing. Through Specialized Channels, vendors will find new opportunities and new allies that increase their total addressable markets and revenue.

Larry Walsh, The 2112 Group

Larry Walsh is the founder, CEO and chief analyst of The 2112 Group. Follow him on social media channels: Twitter, Facebook, LinkedIn.