Muted Optimism Holds Sway Among Channel Professionals

Pandemic fuels transformation and adjusted expectations, according to 2021 Channel Chief Outlook report

By Larry Walsh

COVID-19. Social unrest. Political turmoil. The year 2020 will go into the history books and the channel annals as an extraordinary year – and, obviously, not for good reasons. Probably never in our industry’s history have technology vendors, channel leaders, and partners faced an operational and economic challenge as broad and persistent as they did in the past 12 months.

And these challenges aren’t over by a long shot. The general economic outlook is positive. Economists expect the world and regional economies to recover nicely in 2021 and accelerate further during the post-pandemic recovery in 2022 when tourism, hospitality, and other disrupted sectors return to normal operations.

Despite the optimistic general economic forecast, the Channelnomics 2021 Channel Chief Outlook paints a picture of cautious optimism where we would typically find bubbly optimism and unbridled expectations. While channel professionals participating in our study this year are hopeful, they’ve set goals and targets more modestly than in years past.

And make no mistake that the battle scars of 2020 are visible. The data in this report shows where the COVID-19 pandemic left lasting marks on vendors and their partners. We can see how the crisis forced vendors to make changes they otherwise would’ve avoided or to try new things to reach their goals.

The average channel leader expects indirect sales to grow at least 5% in 2021, down slightly over 2020 and down significantly from 2019. Most vendor leaders are resetting their channel strategies, rethinking their partner incentives and compensation, and investing in marketing as a means of stimulating more partner-led sales and driving partners to contribute to their revenue goals.

Channel leaders aren’t doing this without fuel. The average vendor is investing more in channel programs and initiatives. They’re providing more support for marketing and training. And they’re investing in new business models and partnerships. Channel professionals know the way of doing business has changed and will continue evolving, compelling a re-examination of their go-to-market thinking and redeployment of resources.

The image of what’s to come is still unclear, but the directional indicators point to a future channel vastly different from the legacy paradigm.

From the vendor perspective, the channel is looking forward – but not stopping at 2021. The indicators in this report tell a limited story. Across the industry, channel leaders and professionals are developing visions and plans that will take them well beyond 2021. They see the past 12 months not as a sudden crash but as an acceleration of trends already in progress. The lesson learned: Think ahead or risk getting left behind.

Of course, all of this is happening while a pandemic still rages, inoculation efforts are dampening economic recovery, and partners are struggling under the dual pressure of operating under current circumstances and transforming for what comes next.

Ultimately, channel professionals everywhere are grappling with a list of challenges and constraints that’s as long as – if not longer than – the list of opportunities in front of them. Shining through the thicket of obstacles is the confidence that the channel – and concurrently, channel programs – will perform as expected, if not better.

Larry Walsh is the CEO, chief analyst, and founder of Channelnomics. He’s an expert in the development and execution of channel programs, disruptive sales models, and growth strategies for companies worldwide. Follow him on Twitter at @lmwalsh_CN.

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