Predictions for the IT Channel in 2022
What to Expect This Year According to ChannelWorks’ CEO
With so much happening in the world of technology, it can be difficult to keep up with the ever-changing IT space. 2020 and 2021 were ripe with dramatic and unexpected changes that have altered and shaped every aspect of our lives. As we reflect on this past year, we also look to the future; where are we headed next?
To give us an idea of what we should expect to see this year in the world of technology, we sat down with ChannelWorks’ CEO, Michael Campbell, to get his expert take on everything IT Channel-related. Campbell gave us invaluable insight, pulling from his decades of experience and an outstanding track record of building, leading, and managing IT solutions providers in the channel. We asked him about his predictions for 2022, as well as his thoughts reflecting on 2021.
What predictions do you have for the IT channel in 2022?
Campbell: To state the obvious, there will continue to be a trend towards moving to the cloud, which will also be accompanied by more consolidation and more disruption, especially in the VAR space. No doubt there will continue to be issues around chip constraints and talent shortages. I think the second half of the year will see a lot of acquisitions due to volatility in the financial markets, which will make several high-growth companies more affordable and attractive takeover targets as their stock prices get hammered.
I also think the same financial market volatility will have two effects on the enterprise: first, speed up some cloud initiatives; second, slow down almost everything else. It might sound obvious but some of the cloud projects will accelerate as the move to capture new revenue is pushed by the line of businesses. However, I think most non-revenue-driven cloud projects will actually slow down as budgets get tighter and enterprises are forced to do more with less, whether it be tightening budgets or lack of talent. The projects that get slowed down will put enterprises in the precarious position of extending their hybrid setups and delaying their migrations, which means they will need help extending the life of their existing hardware and data center environments as their projects sit in limbo.
What will be the biggest challenges in 2022?
Campbell: The number one challenge will continue to be around labor, which shows up in a lot of different ways. It’s increasingly hard to not only find new talent but also to retain great talent. The demand is greater than the supply, so it’s really an employee’s market when it comes to salaries, benefits, work location, job function, and other remote-friendly work policies that unfolded over the past two years. Where this has an impact in the Channel is for professional services companies and project-based work, especially in the data center space. As the move to cloud became en vogue, a lot of folks in IT reskilled themselves for more cloud-native opportunities, which left a big gap in those who work on data center equipment. There is a big demand for these types of skilled IT professionals around the world.
What surprised you most about 2021?
Campbell: For me, it wasn’t as much a surprise, but actually an appreciation that there seemed to be a resurgence around the importance of sustainability for all things IT. If you have been watching the major CSP’s, Google/Amazon/Microsoft, they are adding new sustainability and ESG friendly initiatives to their website, offerings, and solution stacks almost daily. I would say we are barely in the first inning of what is capable from a sustainability standpoint when it comes to the enterprise IT space. I also think that Channel partners have been lagging behind significantly when it comes to bringing viable ESG solutions to their customer base. We are excited about what we are doing at ChannelWorks and have a very frothy roadmap when it comes to how we will help our partners drive more sustainability efforts in the future.
What should we leave behind in 2021?
Campbell: Covid. And Shutdowns!
How will supply chain issues play a role in what’s new for the IT channel this year?
Campbell: In terms of the chip shortage, I think it has created a new normal for longer than expected lead times and delays, which should create more opportunities for pre-owned hardware. We are also seeing an uptick in demand for short-term rentals. A lot of gear is still being used for proof of concepts and instead of buying and waiting for long lead times, companies are excited when they realize there are options for renting servers, networking, and storage gear for months at a time instead of going into purchases that create 3-5 year depreciation cycles that never end.
In terms of the Right to Repair legislation, it could be one of the most significant developments in the past decade when it comes to the world of data center equipment. OEMs have long been proud of their ability to use high support and maintenance pricing as a lever to push the end user into buying new hardware at the end of their 3 year depreciation cycle, as opposed to paying a premium for extending maintenance on that still viable hardware. With the Right to Repair legislation coming down the line, we think the power will go back into the hands of the end user which will enable them to not have to continue the cycle of upgrading hardware every three years because the cost of maintenance is not too much different than just buying new hardware. There are certainly many occasions where an end user needs to buy new hardware to take advantage of new tech features, but there are just as many occasions where they can hold onto their data center gear for 5-10 years. With this new legislation, it will reinforce the need for third party support providers, which is an area we are really excited about.
How does an increase in remote work across the country affect the IT channel?
Campbell: What we have seen with the continued adoption of remote work is that there is a bigger demand from employees to extend the traditional comforts of their worksite offices into their home offices. This means there has been a surge in laptops, headsets, comfortable chairs, updated cameras, sound systems, etc. This increase in demand for employee assets has created a real burden on IT departments when it comes to managing those assets in the field, ensuring proper security, and keeping track of all proprietary data and information for which those employees have access. Asset Management Portals are becoming more and more important in the channel, not just for data center assets, but for all IT assets.
What are you most excited about in 2022?
Campbell: It may sound strange to say it, but I am actually excited about the continued ‘uncertainty’. Not that I am rooting for chaos by any means, but when there is uncertainty, it means there is change on the horizon. With change, there is the opportunity to improve, make things better, rethink the way that things should be done, innovate, and challenge the status quo. In order for companies to take advantage of the impending uncertainty, they need reliable partners they can trust to help them solve both the foreseen and unforeseen challenges that lie ahead. The move to the cloud in the enterprise space has created all kinds of challenges and opportunities alike for Channel partners. Throw in Covid, the chip shortage, labor challenges, and global financial volatility, and there is a significant wall of worry that enterprises will have to overcome. They won’t be able to do it alone.
What advice would you give to those working in the IT channel for this year?
Campbell: Be fast, be easy to work with, stress quality over quantity, and drive for sustainability!