In an era of rapid technological advancement, Managed Service Provider (MSP) partners are not merely surviving but thriving. The 2023 TD SYNNEX Ecosystem Report sheds light on how these partners are strategically recalibrating their priorities and business offerings to meet shifting economic, market, and socio-political realities.
The survey, which encompassed feedback from more than 550 B2B channel partners spanning over 60 countries, reveals intriguing trends and patterns that are shaping the future of the technology industry.
AI and ML: Catalysts for growth and challenges
The surge in demand for Artificial Intelligence (AI) and Machine Learning (ML) solutions has been nothing short of meteoric. In just one year, partners offering AI/ML solutions catapulted from 4% in 2022 to an astounding 29% in 2023, marking an unprecedented 625% increase.
However, this surge has not been without its challenges. Many businesses, eager to capitalize on the potential of AI and ML, have encountered obstacles related to cost and data management. Despite these hurdles, investment plans in AI/ML are on a trajectory of exponential growth, with 34% of partners planning to incorporate these solutions into their offerings by 2025.
When asked about the technology solutions MSPs intend to provide in the next 24 months, 46% expressed interest in security, 45% in networking, while 35% showed a preference for data analytics, AI/ML, hybrid cloud, and servers and storage. Automation garnered 33% interest, closely followed by collaboration at 29%.
Addressing gaps in the talent pipeline
Respondents report a shift in hiring priorities, with 24% focusing on data analytics and 22% on AI and machine learning, a notable change from 2022. In North America, AI/ML hiring takes precedence at 29%, followed by data analytics (28%), security (27%), and AR/VR (25%).
Anticipating a transformation in the challenges they would face, channel partners are recognizing the need for proactive measures. They are expected to prioritize investments in the talent pipeline and seek support for the digital evolution of their own companies. They believe that their investments will effectively equip them to address key challenges, including heightened competition and margin pressures, talent attrition, financial non-scalability, lack of technical education, and inability to adapt with evolving technologies.
Partner channel driving stability in a dynamic landscape
In the face of evolving technologies, the partner channel serves as a valuable resource for evaluating and effectively implementing new innovations. It offers tailored business solutions and facilitates collective efforts to mitigate risks like cyberattacks. Additionally, channel partnerships often evolve into strategic consulting relationships, offering partners valuable stability and well-informed guidance.
Recent research from Canalys reveals that the global addressable IT market has reached an impressive total of US$4.7 trillion. This substantial value is primarily delivered through partner-driven services and products. Notably, cybersecurity leads the way with 91.5% partner involvement, followed closely by telecommunication services at 90.9%, and IT Services at 85.4%.
Rebalancing the channel portfolio
Despite expectations of a looming recession, partners report robust performance and express optimism regarding future revenue growth. A significant 77% of respondents report growth, while a mere 8% are experiencing a decline. This remarkable performance outstrips the world GDP growth rate of 3.08%. The resilience exhibited by partners is attributed to their portfolio flexibility and nimbleness in responding to market demands.
In 2023, MSP partners are not merely diversifying their portfolios, but also reimagining their business models. The rise of Managed Service Providers (MSPs) is a testament to the expanding opportunities within the services marketplace. Furthermore, more partners are exploring mergers and acquisitions as a growth strategy, indicative of a dynamic and ever-evolving industry.
Partners are also leaning more heavily on outsourcing to meet business challenges and capitalize on opportunities. This shift underscores the recognition of the need for specialized skills or a preference for sharing risks with strategic partners. Notably, partners are increasingly relying on outsourcing for critical functions such as business planning, managed IT services, public relations, and demand generation.
Navigating regulatory challenges for sustainability
Regulatory pressures are a significant concern for businesses, with ESG (Environmental, Social, and Governance) considerations gaining prominence. 36% of MSPs highlight the challenges posed by rapid regulatory changes and 34% are pressed with the need to meet and document ESG standards.
Currently, for partners, data protection (72%) and cybersecurity (54%) take precedence. However, looking ahead two years, there will be a substantial shift with ESG considerations leading the pack at 42%, surpassing data protection (35%) and cybersecurity (38%) in importance. This underscores the evolving landscape of regulatory priorities and the growing significance of sustainable practices in business operations.
In conclusion, the 2023 TD SYNNEX Ecosystem Report offers a comprehensive snapshot of a dynamic and rapidly evolving technology landscape. MSP partners are not merely adapting to change, but actively shaping the future of the industry. Through strategic investments, a focus on high-growth technologies, and an embrace of emerging trends, these partners are prepared to lead the charge in the technological revolution.
Source: TD SYNNEX