Monday Morning Impact – September 18

Canalys: Channel partners to Drive More than 70% of IT Spending

Partner-delivered IT technologies and services will exceed US$3.4 trillion in 2023, accounting for more than 70% of the global total addressable IT market, according to market research by Canalys, which also forecasts worldwide total addressable IT market growth of 3.5% to reach US$4.7 trillion this year.

Spending in North America is projected to grow 2.8% this year, down from 8.5% in 2022, to account for 37.7% of the total addressable market. The slowdown in cloud service provider capital expenditure in the first half of the year and a decline in telecommunications services spending are key factors. Asia Pacific is forecast to grow 4.5%, EMEA 3.4% and Latin America 3.0% in 2023.

“The long-term technology mega-trends will continue to drive growth opportunities for both vendors and channel partners in 2023,” said Matthew Ball, Chief Analyst at Canalys. “Digital transformation, cybersecurity, compliance, sustainability, and the emergence of generative AI will underpin IT services engagement, the adoption of new software and infrastructure refresh. But there are still major headwinds for the industry to navigate. The threat of recession, rising interest rates, high inflation, trade disputes and extreme weather events will continue to cause much disruption and affect confidence.”

The latest research shows cybersecurity will remain a key growth opportunity, increasing by 11.1% to US$79 billion. This reflects the heightened demand for securing data, systems, and people against rising threats. Network infrastructure is expected to reach record highs, as fulfillment of campus switch and Wi-Fi 6/6e access point order backlogs boost spending by 13.9% to US$72 billion. Price rises, renewals and the upselling of subscriptions will grow cloud application software spending by 19.3% to US$215 billion. Optimization of public cloud spending, cybersecurity posture transformation and business adoption of generative AI will create further consulting opportunities and contribute to IT services spending expanding by 7.5% to US$1.5 trillion. Managed IT services alone will become a half-trillion-dollar business, according to Canalys.

On the other hand, sales of servers, storage and client devices are expected to suffer negative or flat growth after the strong demand surge fueled by accelerated data center buildout by cloud service providers and enablement of remote workers during the COVID-19 pandemic.

Channel Impact^®
This data is useful in helping channel partners, industry leaders, and decision-makers to understand the implications for their businesses and gain a greater understanding of current market dynamics.

CompTIA: Tech Sector Employment Grows Amid Pullback in Overall Tech Occupations

Technology sector companies in the aggregate added workers last month while employers throughout the economy reduced tech occupation staffing, according to an analysis of U.S. Bureau of Labor statistics by CompTIA, a tech industry association based in suburban Chicago.

Within the tech sector, employers increased employment by 12,643 positions, according to CompTIA. Employment growth was led by new hiring in IT and custom software services and systems design (+10,400) and cloud infrastructure, data processing and hosting (+5,800).

However, tech occupations throughout the economy declined by 189,000 positions. The unemployment rate for tech occupations rose slightly to 2.1%, moving directionally with the increase in the national unemployment rate to 3.8%.

“The usual caveats of monthly fluctuations in labor market data apply,” said Tim Herbert, chief research officer at CompTIA. “The seesawing between strong and lagging tech jobs reports is undoubtedly confusing, but the overall macro trend of growth in the depth and breadth of the tech workforce remains steady.”

Employer job postings for future tech hiring totaled nearly 208,000 in August, a slight decline of 1.4% from the previous month. Job postings for information security analysts increased 19% from July to August, to more than 12,000 postings. Other in-demand occupations include software developers, tech support specialists, computer systems analysts and data scientists.

Denver, Washington, Phoenix, Tampa, Philadelphia, and Baltimore led metropolitan areas with the largest increases in the number of tech job postings from July to August.

Positions in emerging technologies or jobs requiring emerging tech skills accounted for 23% of all tech jobs postings in August. Within emerging tech job postings, 37% were associated with artificial intelligence (AI). California, Texas, New York, Massachusetts, and Virginia had the highest numbers of AI-related job postings.

Channel Impact^®
The data show continued strength within the industry while tech-related hiring outside of the industry is having trouble gaining momentum.

Auvik Adds Jenne as a Strategic Partner for Network Management and SaaS Monitoring

Auvik, a Canada-based provider of cloud-based network management software, has announced a new partnership with Jenne Inc., a value-added technology solutions distributor and cloud services brokerage.

“Jenne is a highly strategic partner for Auvik because they serve both VARs and MSPs, two routes that are critical for Auvik’s go-to-market strategy and overall growth,” said Stacey Tozer, Director of Channel at Auvik. “Jenne has an extensive partner ecosystem and shares our vision for delivering value to customers.”

With this agreement, Auvik now offers Jenne sales partners multiple revenue streams with offerings that can be resold, packaged with professional services, or delivered as part of managed services, including network management, SaaS monitoring, and network assessments.

“We’re excited to add Auvik to our extensive portfolio and be able to offer to our partners an industry leader in network monitoring and management,” said Dan Kozimor, Senior Director, Networking Solutions at Jenne. “Their out-of-the-box software solution boosts efficiency and capacity while simplifying and automating at amazing speed.”

Channel Impact^®
The alliance is intended to deliver advanced network management and SaaS monitoring solutions to value-added resellers (VARs), managed service providers (MSPs), integrators and telephony service provider companies, ultimately serving small and medium-sized businesses.