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Who buys IT through the channel? Practically everyone

Channel StrategyCloud

Orlando, Fla. – IDC released findings of a new study on the customer perspectives on the importance of IT solution providers at the 2015 Microsoft Worldwide Partner Conference.

The predominately North America study surveyed more than 400 customers and found 86 per cent of customers do buy through the channel at one time or another, direct purchases are more for mature type of products.

In terms of vendor specific purchases Microsoft drives approximately 92 per cent of its revenue through channel partners. Compare that to the rest of the IT industry only 39 per cent go through the channel.

Darren Bibby

Darren Bibby

“Microsoft is a huge part of the indirect channel and solution providers know the deal when working with Microsoft and they know the company will not take business direct,” said Darren Bibby, the author of the study and vice president, channels and alliances research at IDC.

Some of the reasons for customers wanting to work with solution providers:

  • Customers want a trusted technology advisor who can help them adapted to a digital business;
  • Technology will be distributed by cloud, mobile and social;
  • Need help moving to the cloud;
  • Industries are getting disrupted by technology; long distance telephone service by Skype, Taxi service by Uber and video stores by Netflix; and
  • Companies are demanding partners to understand there business and industry and not just the technology. And, the channel has for the most part made technology easier for customers to digest.

According to Bibby, the cloud business will grow to $200 billion by 2018 and this includes IaaS, PaaS, SaaS, private cloud, professional services, hardware and software. “The all-in pure cloud market, as IDC sees it, the growth rate is five to six times the greater IT market. Cloud is on an absolute terror right now,” he added.

IDC also found that 70 per cent of CIOs are shifting to a cloud first strategy by 2016. “This means they will look first to the public cloud and then go to other options based on the economics and device freedom. This matches up well with Microsoft current cloud first, mobile first strategy,” Bibby said.

Even SMBs are pulling out there wallets and looking more like larger businesses because they have been helped by channel partners with enterprise-class functionality in a SaaS offering.

In terms of the total spend on IT worldwide, IDC pegged that at $2.1 trillion, which Bibby said is four times more than the fast food industry and twice as much as the alcohol producers.

“IDC talks about the 3rd platform of cloud, mobile and social and then there are the mega trends usually called CAMS (cloud analytics, mobile and social media). The 2nd platform client/server and the 1st platform mainframes are at zero growth and may enter into recession,” he said.

Survey respondents also would pay a premium for good customer service through the channel. More than 72 per cent of customers would rather have a good customer experience and forgo a cheaper deal.

However, smaller businesses in this study are more price sensitive, while larger enterprise are more consistent with customer service, Bibby said.