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Partners and marketplaces vendors’ road back to profitability

Partners and marketplaces vendors’ road back to profitability

Channel and consulting model has been the most “challenged” since pandemic, says TBR

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The world’s biggest technology vendors are facing a long road back to sales recovery post-COVID, but the channel could prove to be their return to ‘normal’. 

According to a new report by Technology Business Review (TBR), vendors looking to scrape back the sales profits lost during the pandemic will need to either increase face-to-face time between partners and customers or increase their own direct digital sales channels. 

The latter, according to TBR, will be more effective in the small-to-medium business space, while bringing consultants back to customer sites may present higher-value advisory opportunities. 

As TBR noted, the channel and consulting model has been the most challenged during the pandemic due to limited face-to-face interaction caused by nationwide lockdowns. 

In Australia and New Zealand, partners have been forced to grapple with cancelled and delayed projects, although some have managed to transition to effective delivery online.  

And although many partners, including Accelera and Thomas Duryea Logicalis, claimed they saw an acceleration of customer digital transformation projects, TBR believes, globally, it was the opposite. 

“[When] COVID-19 accelerated in late March and April, buyers paused many of their digital transformation programs and increased focus on run-the-business projects, compelling vendors to adjust their hiring and reskilling programs and demonstrate capabilities in cloud, cyber security and workplace solutions management.” 

As a result, many went into “damage-control mode”, turning to lay-offs, salary freezes, and limited selling, general and administrative spend to protect profitability. Vendors who have notably turned to laying off staff include Dell and Datto.  

At the same time, while automation played a role in the cost-cutting effort, the result was not, “as many had hoped”, the single most important variable in offsetting vendors’ cash flow. 

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Tags DellpandemicpartnersTBRDattocovid

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