Optimistic outlook for partners in 2018, with three quarters forecasting double-digit growth

Channel partners across Northern Europe are optimistic for a strong year of sales, with around three quarters (72 per cent) forecasting double-digit revenue growth in 2018, according to new research from technology market analyst firm Canalys.

The research - commissioned by Citrix - is based on online interviews with 354 Citrix and Candefero partners across Northern Europe. Polling those in the UK and Ireland, Denmark, Finland, Norway and Sweden, the findings also reveal a strong profit outlook for partners, with 59 per cent of respondents projecting double-digit profit growth as well.

Security (91 per cent), cloud applications (89 per cent) and cloud infrastructure-as-a-service (86 per cent) were marked as the top drivers of growth in 2018. More than one in three (35 per cent) channel partners have even recruited new sales team members to support the sale of subscription-based services, such as managed cloud services.

Public cloud growth through Microsoft Azure

Over three in four (76 per cent) partners have marked managed services as 'critical' to their revenue this year. However, the delivery of cloud/hosted services from their own data centre or co-location data centre is down 7 per cent on last year - only called out as important by two-fifths (41 per cent) of partners.

More than a quarter (27 per cent) of partners now view the delivery of cloud services from a third-party location as a key driver of growth. Partners are also preparing for a moderate number of customers shifting to the public cloud this year, with a third (32 per cent) expecting 10-20 per cent of their managed services business to be impacted.

Over three in four (76 per cent) of those shifting to public cloud models have selected Microsoft Azure as their primary public cloud provider of choice, with just 11 per cent backing Amazon Web Services (AWS). Cloud services are also seen as a more strategic enabler of growth, with 57 per cent of partners stating such services drive more profit than traditional reselling of hardware and software.

Moderate analytics growth

71 per cent of partners have called out the sale of analytics as important the their businesses this year. While artificial intelligence still seems in its infancy stage as a technology, over two in five (42 per cent) of partners have also claimed it will be important for their sales.

Alastair Edwards, Chief Analyst, Canalys, said: "As end-users adopt these complex technologies, the need for a highly-skilled, consultancy-led channel becomes even more critical. The challenge facing the channel is a shortage of critical skills, both from a technology and a business advisory point of view. Vendors that succeed will be those that enable their partners with the resources and support to capitalise on these massive emerging opportunities."

Justin Sutton-Parker, partner director, Northern Europe, said: "Today, businesses are embracing significant change to remain competitive. From new, disruptive players entering markets - armed with best-of-breed cloud software - to the incoming GDPR legislation, a number of factors are forcing significant numbers of organisations to evaluate their IT infrastructure and business models.

"These industry changes appear to be encouraging increased dependence on the channel, with end-user customers relying on partners' knowledge and expertise – especially in relation to cloud deployments. Alongside this, new technologies – such as analytics and artificial intelligence – are also set to play a bigger role for channel partners this year, as organisations seek to improve operational efficiencies and take their end-user customer experience to the next level."

Methodology

Canalys conducted online interviews with 354 Citrix and Candefero partners, comprising of resellers, distributor and systems integrators, across Northern Europe (UK and Ireland, Denmark, Finland, Norway and Sweden).

The interviews were conducted between 15th January and 9th February 2018.

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