Less than one-fifth of European technology ecosystem business leaders say they will offer augmented and virtual reality (AR/VR) solutions by 2024, despite an IDC-projected €16.5 billion European metaverse market and an expected 150% increase in investments in the next 24 months. These findings are part of the first-ever TD SYNNEX Ecosystem Benchmark Report. While opportunity exists with the metaverse, these same businesses have fully embraced the managed services trend, with almost three-quarters of respondents anticipating increased revenue from this arena.
“As a global IT distributor and solutions aggregator TD SYNNEX has a unique vantage point from the center of an evolving technology ecosystem. The TD SYNNEX Technology Ecosystem Benchmark Report captures how the IT channel is anticipating and responding to innovations that are transforming the way we interact and consume”, said Patrick Zammit, president Europe and Asia Pacific Japan for TD SYNNEX. “By harnessing the potential of emerging trends, the channel will be well-positioned to help accelerate the adoption of new technologies that will exponential advances in efficiency, connectivity and safety.”
Conducted in collaboration with technology market analyst firm Canalys, the TD SYNNEX Ecosystem Benchmark Report underscores that every business is connected in the global technology ecosystem, as well as the rapid rate of change that has evolved to a state of relentless transformation.
The report was developed based on an industry survey of mid-size technology ecosystem partners, which is defined as technology companies with 1,000 seats and below. Respondents in Europe identified the following fundamental factors facing their businesses:
anticipating and meeting end-user technology expectations
effectively managing technology ecosystem business operations
technology ecosystem engagement, enrichment and enablement
Despite these challenges 82% of European partners expect to report growth this fiscal year, with 43% of partners saying security, servers and storage are the top revenue drivers, and 40% saying these technologies are the most profitable. Security came in as the single most profitable technology for European partners.
The survey finds that every category of services are projected to grow:
Managed Services: 74%
Professional Services: 65%
Consumption-based XaaS: 50%
Packaged Services: 44%
Product Lifecycle Services: 38%
Most European partners (63%) forecast hardware resale will be fundamental to their business mix with 25% saying the category will increase and 38% indicating no change. Notably, respondents say selling their own IP, which currently represents four percent of their business, will be a bigger part of their business mix, with more than a third expecting that number to grow in the next 24 months.
"Channel partners are actively developing their services businesses", said Rachel Brindley, Senior Director, Channels at Canalys. "We see that partners are looking to invest across the technology ecosystem."
IT business leaders know they need to grow capabilities around sustainability and ESG (environmental, social and governance). Forty-three percent of European partners plan to offer sustainability reporting within the next two years.
“We’re really encouraged to see European technology leaders put ESG capabilities on their roadmap”, said Zammit. “It’s an important priority for TD SYNNEX, too. We’re proud to have signed the Science Based Targets Initiative, committed to net-zero carbon emissions and created a global DEI strategy.”
The report notes that “partners equipped to help customers meet ESG commitments and requirements will have an outsized opportunity in the market.”
In line with TD SYNNEX’s commitment to being a good corporate citizen, the company recently launched a sustainability certification to help TD SYNNEX customers and co-workers accelerate their aptitude in this increasingly important business function.
European IT partners signal that collaboration is a high-priority growth strategy. Seventy-nine percent of respondents ranked engaging ecosystem partners as important or very important to future growth.
“Delivering value to end-user customers means evolving business capabilities that scale to the most efficient and effective ways to source, configure, provision, secure, manage and service those technologies”, said Andy Gass, chief digital officer, TD SYNNEX. “In an environment of continued rapid technological change, European IT businesses need to bring solutions to market faster. Ecosystem collaboration accelerates that time to market, reduces costs and minimizes technology skills gaps.”
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