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45 Percent of Channel Partners Say They Will See Higher-than-Average Earnings This Year
December 06, 2013
While the enterprise tech industry keeps a close eye on the earnings of software and solutions providers, there is another bellwether to watch: the earnings of the critical channel partners that help get these solutions to end users.
The Web site Channel Partners recently conducted its annual compensation survey during the fall, polling master agents, independent agents, subagents, brokers, dealers, VARs and systems integrators about how and how much they are paid, how compensation influences sales efforts and what they predict their revenue outlook to be for 2013 and 2014. These responses, plus a year-over-year analysis, have been published in 2013 Channel Partners Compensation Survey Report.
As with almost all financial outlooks in this continued shaky economy, the results are a mixed bag. Forty-five percent of respondents to the 2013 Channel Partners Compensation Survey said they are on track for higher-than-expected earnings this year. The reasons behind the earnings boost cited are increases to bigger clients, greater bandwidth demand (especially when it comes to ensuring redundancy), and selling larger deals with more services.
In particular, many IT and telecom partners that have traditionally existed to service the SMB (small to medium-sized business) market are bringing larger clients on board. Increasingly, midmarket companies (100-1,000 employees) are finding they no longer have time or internal resources for handling technology, which is why they are turning to channel partners.
“The channel remains in a state of evolution as more telecom-centric partners add IT capabilities to their practices, and vice versa,” wrote Channel Partners’ Senior Editor Kelly Teal. “This business model development is taking time and, in some instances, is paying off while, in others, it has yet to translate into more money. Indeed, the levels of success differ depending on how far upmarket partners have been able to push themselves, and those efforts and results are sure to bleed far into 2014.”
Among the results include the following:
60 percent of respondents expect double-digit gains in revenue of 11 percent or more in 2014;
78 percent of respondents count monthly residuals as part of their compensation;
53 percent of respondents said they are “always” paid evergreen commissions; and
35 percent of respondents are paid the same on renewals as on new sales.
The lion’s share of results for the study came from “master agents” organizations. Master agents such as Utah-based Telarus play an increasingly important role in the IT and telecom market. By building contracts with a number of leading voice and data telecommunications providers, Telarus (News - Alert) and others help consolidate the sales volume of hundreds of independent sales agents.
The full report may be found at the Channel Partners Online Web site.
Edited by Rory J. Thompson
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