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  • Matthew Spencer - Tech Journalist

Services-Led Businesses are spectating the biggest growth: State of Partner Profitability Study

Business owners and service providers concentrate on subscription-based services more than their previous start of selling products. Due to the coronavirus leaving drastic effects in all aspects of our lives, from product selling business, XRPs (extended service providers) are now focusing on technologies.

Throughout the years, the "State Of Partner Profitability Study" has been done where managed services, extended services (XRP), SaaS, PaaS, and many others come together to form a united discipline.

The discipline helps share market statics, future move, current sales and growth strategy, among many others. The Chanel Company State of Partner Profitability 2021 event brings CEOs and decision-makers under one roof to discuss the future. The Channel Company has several partners. One of the most useful ones to us is the CRN channel. Audienz, IPED Consulting and other media.

If we look at previous years' State of Partner Profitability research and discussion of the Channel Company, we can find several things. Profitability is driven by business model, gross margin and express trends, refining proposition values, etc.

On Monday, The Channel Company CEO Blaine Raddon went on stage with three well-established solution providers to discuss the findings. The Channel Company is the parent of CRN and the Xchange series of channels.

Service providers are changing how business is conducted in recent months as profitability lies elsewhere. With The Channel Company, a few other managed services joined the team, including Entara, a Chicago based XSP, 3rd Element Consulting, Pa.-based MSP and Awecomm Technologies, another MSP from Troy, Mich. Studies of the Channel Company gave insights on profitability margin for these companies in future.

According to research, security is the number one solution these companies are targeting. Network management, disaster recovery, middleware, application integration, business continuity and many more. Network design, application customisation, architecture, and business intelligence are core parts of today's tech business.

We are not unfamiliar with the supply chain issue brought by COVID-19. It called for urgent scheduling to take the business in another direction. On the cloud side, more hardware panels are installed supported by the global MSP community.

Entera CEO and president Diaz said they are focusing on financial institutions more as the coronavirus pushed online transactions to a whole different level. Every bit of support is necessary. Diaz talked about the pandemic causing lockdowns, which came to terminating contracts, impacting the company's economy as they were not prepared for many remote engineers. "We let our clients out of contracts; that was the right thing to do."

These results came in papers as we've seen cloud companies double or tripled in business as there are many customers to grab. Due to the lack of manpower, companies shut down, and some still are shut as they couldn't fully recover. But online sector flourished, and those who adopted this business style found more customers than ever. Revenues mix translated to profit and in paper gross margin received 22 per cent product-led growth where blended sector gained 28 per cent. On the other hand, the service-led business saw 48 per cent growth, which is truly phenomenal.

Back to the 2019 product or solution drive chart, core and advanced security assessments were the primary highlights. It remains network design, cloud data migration, hybrid cloud deployment, application integration, business intelligence analytics, etc. Core services include paid assessment, professional deployment, and ongoing managed services.

Partners say they pay 125 per cent market value for technical stuff, but in turn, they had to cut costs in supply. The channels provide profit tracking services, unique assets management, service automation, marketing expectation and similar services alongside the ones we mentioned below. Marketing is a powerful tool, and sooner or later, companies realise that. At those times, managed services or comprehensive services come in handy.


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