Channel Forecast: H1 business update provides positive indicators

Last month’s Channel Forecast insight session brought to the surface how changing partner and customer demands are driving a multi-strategy approach from ICT providers Onecom Partners, Wildix and Xelion. As they prepare for what lies ahead it becomes evermore clear that there are big opportunities for success, but only when the right strategic levers are pulled to enable channel partners.

Roan PrattThe observations and experiences of our Channel Forecasters provide a sense of optimism for the second half of the year, largely based on the strategic steps they have taken. Overall, 2024 trading is currently outperforming expectations. “We’re seeing strong growth across the whole portfolio, notably from a mobile perspective,” stated Roan Pratt (pictured left), Sales Director, Onecom Partners. “And in preparing for the next stage of growth we are building on our products, adding capabilities, developing more value added services and accelerating these developments into the partner community. But we are aware that they face challenges – whether margin degradation or looking at selling more into their existing base – and we’ve got to prepare partners to achieve their goals.”

More telecoms resellers want to become MSPs and are looking at alternative revenue streams

In terms of its UK&I performance so far this year, Wildix is ahead of forecast and from a partner perspective is recruiting in high numbers through its roadshows. That said, Country Manager for UK&I Rob Loakes (pictured left) pointed out a growing issue for all vendors. “On the challenges we face, it’s the number of acquisitions in the market,” he commented. “We could on-board a partner tomorrow and three months down the line they may be acquired. There’s more M&A this year and our challenge is retaining relationships through the acquisition process.”

Xelion is on track for 33 per cent growth in 2024 which is in line with the last three years, and broadly in line with its Dutch and German partner businesses. “We’re also seeing resellers challenged by the technology curve and having to get their heads around, for example, social media products and other non-traditional resellers services,” explained Dave Reynolds (pictured left), Managing Director UK, Xelion. “We’re seeing demand for WhatsApp and Facebook, which are products resellers have not touched before, so we’re working hard on addressing those challenges.”

Strategic proximity
One way to remain relevant to channel partners is to invest in their core requirements as they emerge, as well as drive new opportunities, and a key theme that ran through the discussion is the criticality of strategic proximity between upstream suppliers, partners and end users. “We’re looking at how we introduce more products into the portfolio and while broadening the product set make it easy for partners to add new lines to their customers,” added Pratt. “Human nature dictates that we follow the path of least resistance so being easy to do business with is important. We are also bringing on more tools to enable partners to service their end users.”

Through working with partners more strategically we are gaining access to enterprise opportunities

To strengthen its channel ecosystem Xelion is also taking a more simplified approach. Whether in product delivery, procurement and general ease of doing business, Reynolds says this is pivotal for long-term growth and resilience. “Xelion is known as a techie business and we needed to improve the engagement experience for partners and end customers, so we focused on making our products and services easier to consume,” he added. “We looked at what works and doesn’t work for partners in terms of engagement and built a new AI-driven platform that goes live later this year in our October release. Every partner is different and or goal this year is to create a bespoke partner experience.”

Wildix is primarily SMB focused but through working with partners more strategically and responsively the company is gaining unprecedented access to enterprise opportunities. “We also have two new products coming into market – the sales and networking platform called x-bees which is gaining traction with partners, and x-hoppers, our full retail solution which takes communications away from the headset,” added Loakes. “These products will help to drive a successful H2.”

By aligning their target markets with more inclusive partner strategies vendors are creating a pathway for resellers to achieve long-term growth and accelerate their ambitions. “More telecoms resellers want to become MSPs and are looking at alternative revenue streams like cyber and IT to drive a different customer profile,” noted Pratt.” We are having conversations with partners who are ambitious about growth, and once or twice a month, if not more, we are adapting our strategic partner programme to deliver on their requirements. Building in value adds and creating sticky customers also helps MSPs with their churn mitigation.”

We didn’t want to rush into AI but gain a good understanding of where we see customer demand to inform future releases

Measures taken to stimulate new opportunities are paying dividends, but as noted, challenges need to be addressed. “There is a technology challenge across the channel market, whether security, AI, integration, or even Teams,” observed Pratt. “Other challenges are more commercial and business-based, such as staff recruitment and margin erosion, so we’re helping partners to understand and address these obstacles. For example, we’re helping with recruitment through graduate programmes into ours and partner businesses. We’re focusing on education, resources and working strategically with partners to address their priorities.”

Supply chain resilience
Onecom Partners’ approach also builds resilience into its supply chain while empowering acquisitive partners to overcome challenges and deliver growth. “We work closely with partners looking to acquire to help offset the impacts of consolidation, keeping relationships under the Onecom roof as much as possible,” said Pratt.” It’s proving to be a successful strategy while also helping partners to grow.”

Onecom Partners has a full suite of products around voice, connectivity, mobile and value add, and Pratt noted that the company is seeing more demand from end users wanting to move into self-service, which has become a key focus area as a result. Meanwhile, Loakes noted that Wildix is hearing more around AI from its partner network than ever before. “From an analytics perspective we’ve already embraced AI,” he added. “With the x-bees platform we’re providing services like accurate in-call transcription and using AI from a sentiment perspective.  Services like these are a growing requirement from partners and we will major on them. We also took the decision last year to make our partner portal more user friendly and more information and BI-driven.”

Reynolds noted that Xelion also has some AI elements in its platform which partners are using. “We didn’t want to rush into AI but gain a good understanding of where we see customer demand with services like transcription and real-time translation,” he stated. “These experiences have enabled us to familiarise ourselves with AI elements and inform future releases.”

The biggest demand witnessed by Reynolds last year was for contact centre type features, even from the smallest customers, particularly omnichannel and WhatsApp which is proving to be absolutely key. “Two things stand out in tenders for large deals – they want to see something AI and Meta-based,” said Reynolds. “So we invested time and effort into developing integration with Meta and social media platforms. We expect more customers to use apps like Instagram Messenger, Facebook Messenger and WhatsApp as part of their suite of communication products. This is an emerging market  and a completely new product set for resellers. Therefore we’re putting a lot into these products this year and in 2025.”

On ‘2025’ and the paused PSTN switch off, Reynolds noted that the delay until January 2027 will have little impact on the channel as in his experience the vast majority of SMEs have already left the PSTN market. “We carried out analysis on new orders and less that 10 per cent were coming off ISDN or PSTN,” he said. “The impact of the delay will kick in as a last minute rush in the SoHo space, the one-to-five user market. They won’t move until forced to.”

The big reseller success stories belong to those who prioritise ‘strategic proximity’ and keep their customers close, are effective in their product knowledge, wise in their choice of vendor partners and proactively play to their strengths, believes Reynolds. “Our partners win biggest when outing competitor products that usually do the majority of services the customer wants but the reseller isn’t providing them,” he stated. “We see this all the time and recently rolled out a 400 seat call centre that displaced a competitor that could have delivered everything the customer wanted if they had better engaged with them and had more knowledge about the product they supplied.

“Customers can be easily lost and the only way resellers can defend against this is to actively engage with suppliers and put time and effort into learning about the services they sell. Resellers need to find partners they can work with and build skill sets to keep their customers. They need to look at their products, engage with customers and try things out as a priority.”          

Related Topics

Share this story