Monday Morning Impact – November 29

NPD Report: U.S. B2B Tech Channel Sales Up 4% in Q3

U.S. B2B technology channel revenue grew 4% year over year during Q3 2021, according to The NPD Group’s B2B Distributor Track and Reseller Tracking Services. This follows a 1% decline in Q3 2020 compared to Q3 2019. Year to date through September, channel revenue is up 7% year over year, compared to a 3% decline for the same period in 2020 vs. 2019.

The report opines that the increase is being driven by the need to support an increasingly hybrid workforce, in addition to higher average sales prices, as a result of component shortages and increased shipping costs.

The products driving gains have remained consistent as security software (up 14%), notebooks (up 28%), and monitors (up 12%) see continued growth through September. Yet sales of collaboration products are starting to accelerate as employees return to office settings in some capacity. Collaboration software sales, combining cloud and on-premise, are up 10% year to date in 2021 and large format commercial displays have seen 18% gains. Cloud revenues alone have increased 34% year to date and growth is expected to continue.

When looking at the reseller channel specifically, in Q3 2021 sales have grown 12% compared to Q3 2020 and are up 9% vs. Q3 2019. Commercial software had the highest revenue share, with dollar sales up 17% over Q3 2020 sales and 25% vs. Q3 2019. Education remained the top performing reseller vertical sector in B2B technology, representing 15% revenue share in Q3. Following a strong Q3 2020, this was still up 2% year over year and up 39% when compared to 2019 levels.

“Resellers are benefitting from an improving economy across all verticals, especially midsize and enterprise customer segments that support remote workforces,” said Mike Crosby, director and B2B technology industry analyst for NPD. “As we head into the last few months of 2021, look for organizations across the channel to focus on business continuity and productivity. With so much change occurring real-time within many organizations; return to work, hybrid work weeks, and digital transformation efforts, organizations need to be able to manage these shifts effectively with minimal disruption to the business.”

Channel Impact^®
The data present some very positive news for partners who are planning their strategies for 2022.

Ingram Micro Announces Flexible Subscription Engine for Recurring Services

Ingram Micro has rolled out its new “Flexible Subscription Engine” designed to seamlessly manage recurring services together with product solutions.

Available now in the U.S., with plans for global expansion, the offering provides an automated quote-to-cash subscription lifecycle platform for Ingram Micro vendors and channel partners.

“The global economy is moving quickly to an “everything as a service” model, raising expectations around the experience and demanding organizations embrace digitization and innovate to benefit all stakeholders,” says Paul Bay, executive vice president and president, Global Technology Solutions at Ingram Micro. “We’ve invested in the talent and the technology to reimagine the experience our vendors and partners have with Ingram Micro to help ensure we are continuously advancing our strategy to become an “as a service” technology company.”

Specific features include real-time visibility of subscription contract lifecycle; quoting and automated service validation for ordering, provisioning, and billing; subscription renewal notifications for all services and licenses; plus, support for upgrades and add-on services.

Channel Impact^®
The new subscription sales engine is intended to help partners to better manage services and accelerate growth while solidifying Ingram Micro’s position in the recurring revenue space.

Cisco Simplifies Software and Services Buying Program

Cisco has announced a new enterprise agreement (EA) intended to make it easier for partners and customers to buy, sell, and manage Cisco software and services.

“Cisco’s new Enterprise Agreement gives our customers and partners a powerful, simple, and extremely flexible way to buy and consume our great software products,” said Gerri Elliott, EVP and Chief Customer and Partner Officer. “Innovations like the ability to shift investments across the portfolio will help us better serve our customers, push further into our business transformation, and drive higher profitability for our partners.”

The new Cisco EA provides a single set of terms and conditions across five portfolios (Applications Infrastructure, Networking Infrastructure, Collaboration, Security, and Services). The minimum spend threshold to access EA benefits has also been reduced. In addition, the new Value Shift feature allows partners to shift committed spend across Cisco DNA software and Meraki software.

Cisco Enterprise Agreement Pay, a new offer from Cisco Capital, provides extended payments at no cost to customers for select EAs and a-la-carte software. For Cisco partners, the complementary financing option is intended to mitigate credit and currency risk, features billing and collecting through Cisco Capital, and partners are paid upon the start of a customer’s contract.

The new Cisco EA is currently available through select partners with plans to expand partner availability in early 2022. The current Enterprise Agreement programs will remain available to customers and partners while the transition to the new Cisco EA takes place during the first half of 2022.

Channel Impact^®
The changes to the contract are expected to accelerate customers digital transformation and fuel software revenue growth with partners while streamlining license procurement and simplifying administration.