2020 and 2021 were heavily focused on the pandemic, and the global recovery from it that continues to play out. But 2022 has seen the ‘new normal’ evolve further – in many ways, into a life that looks more like what we were used to pre-Covid-19, with public health and social distancing restrictions easing off.
However, some changes are here to stay as we approach 2023. Some of these have been embraced, within the Channel and beyond – many are favouring permanent remote working, whilst others preferred to head back into the office. The hybrid set-up is here for the long haul.
Other developments aren’t so welcome. The strain put on the economy by Covid-19, alongside other geopolitical factors such as Russia’s invasion of Ukraine, has resulted in the cost-of-living crisis with many across the UK struggling to manage soaring prices. At the time of writing, inflation is at 10.1 per cent and interest rates have been lifted to three per cent, the biggest hike since 1989.
With the Bank of England warning of the prospect of the UK’s longest recession on record, economic downturn has been predicted to extend into 2024, meaning Channel businesses are likely to be facing some tough financial decisions in the coming year.
Rocky roads ahead
Richard Eglon, CMO at Agilitas, said that the Channel will see increased pressures on businesses that have outstanding loans against their organisation.
“These loan repayments are starting to increase dramatically and as we move into the new year, less money will be available for channel leaders to invest in their people or processes,” he commented.
“Financial investment is also going to become more challenging to acquire for businesses in our sector, as financial institutions are understandably taking a more conservative approach due to market volatility and uncertainty around what the future will look like.”
Lloyd Smith, managing director at Wahoo Learning said that whilst uncertainty has put markets on edge and made investment decisions more difficult, many companies have built up significant cash reserves throughout Covid-19 and are looking at safe routes for investment and growth.
“While conditions might still be tough, the time is right to start chasing new business,” he said. “The pandemic mentality of survive or die will give way to growth strategies, and as a result, we’ll likely see significant mergers and acquisitions.”
In the face of uncertainty, Datto’s VP of business development EMEA, Greg Jones, pointed out that the Channel should try to see the opportunities to drive change in 2023.
“If it wasn’t an economic downturn looming in 2023, we would be faced with something else. Why? Because that is business and life – just look at the last three years and the change that Covid-19 brought about for businesses and the Channel,” he said. “While challenging at first, more people ended up replying on technology throughout the pandemic, and that was good for the Channel!”
His advice to Channel businesses in 2023 is to ‘cut your cloth accordingly, but don’t go crazy’ – Jones pointed out that many businesses ‘overreact’ in times of economic downturn, and this can have a negative impact on business, but cash should of course be conserved where possible.
“Look at interest rates and the cost of inflation, just having cash in the bank could be costing you money right now. You might be better off spending some of that money on growing your business,” he told Comms Business, giving the example of investment in automation which could reduce operating costs in the longer term.
“Remember that you can always automate more. I have worked with hundreds of MSPs over the years and I have never found an MSP or business that is automating too much. The more you automate, the more profitable you become and long-term, your EBITDAR will only move in one direction – north. Sometimes, it is even a good idea to spend more money on automation!”
Several channel experts we spoke to also predicted that businesses will be focusing on more mindful, cost-effective marketing strategies in the face of economic uncertainty. Elizabeth Sparrow, founder at Blabbermouth said that financial conservatism will result in a ‘revolution’ in the way that Channel businesses establish budgets and measure ROI.
“Marketing is never more crucial than in times of economic uncertainty when rivals are competing for customer attention and retention. However, in previous recessions, businesses tend to cut departments to save on costs. In response to this we have seen a rise in outsourcing which will accelerate throughout 2023,” she commented.
The green revolution
Elsewhere, rising energy prices will see businesses prioritising energy efficient devices – sustainability is a factor here too, pointed out Lee Underwood, UK channel manager at Snom.
“A survey we conducted at the end of 2021 revealed that 8 in 10 UK employees were in favour of using more eco-friendly IP terminals – and these feelings will only have grown stronger in the past 12 months,” he said.
“Communications devices which are energy efficient and switch off automatically can keep costs lower. These include phones with ambient light sensors, which can adjust display brightness automatically. Additionally, knowing that they’re using the most energy efficient device means employees plugging in these devices at home needn’t worry about any significant impact on their energy bill.”
It’s been clear to see sustainability inching higher up on the agenda over the past year or so – many businesses Comms Business has spoken to on the topic have stressed the importance of forming partnerships with companies that are able to demonstrate proven sustainability credentials, citing it as a top concern when doing business and a necessity rather than a ‘nice-to-have’.
Whilst the ‘green revolution’ was already underway before the energy crisis, said Mark Pillow, managing director, VoIP Unlimited, he believes it’ll pick up pace in 2023 with businesses taking advantage of advances in smart charging, requiring real-time data connections to ensure accurate insights into costs.
“AI will further enable this, ensuring businesses are charging and discharging at the most commercially beneficial times and that the information is clear and easily digestible for decision makers,” he said.
Channel experts point to the rise in AI for addressing numerous challenges. AI and machine learning will continue to make leaps and bounds as we move into 2023, and for Nigel Dunn, Jabra VP and MD EMEA North, contact centres are a key example of an area where AI can provide transformational benefits.
“We are seeing a shift in mindset that is no longer about handling calls faster or making quick technology upgrades, but about improving the overall experience for both customers and agents,” he said.
“We expect to see more adoption of AI software in call centres and use of data and analytics to better understand human sentiment and improve the quality of conversation and performance.
“AI software, such as Jabra’s Engage AI, uses artificial intelligence to assess both the caller and agents’ conversation and levels of engagement. This monitors tone of voice, analyses sentiment and provides an instant measurement of the customer experience and live coaching on how to manage the given situation.”
Digital transformation has certainly accelerated over the past few years with smarter technologies bringing productivity benefits to a wide range of environments. The appetite for these technologies is sure to grow in 2023 – Snom’s Lee Underwood described the growing interest in ‘smarter’ functions for IP technologies within the office environment, for example, helping to automate mundane tasks.
VoIP Unlimited’s Mark Pillow added that whilst automation is accelerating many industries, there are more aspects to automation than some may realise – “when it should be used, when it shouldn’t and how just scratch the surface”.
“Whether resellers consider themselves to be experts in automation or not, they need to at least have access to partners that are,” he commented. “Not only to ensure fit-for-purpose deployments, but to instil confidence in business owners adopting what could be quite an unnerving change for them, in terms of leaving some aspects of their customer interactions to an algorithm!”
The all-IP journey
IP generally will continue to boom as the ISDN switch-off approaches, with more and more businesses set to take the all-IP approach. Underwood said that whilst the transition to digital phone systems is already well underway for many, IP can do so much more than making phone calls seamless.
“It’s possible, for instance, to integrate an IP phone with the fire alarm systems in a building or connect it to doorway entry systems and security cameras to gain visibility over who is entering or leaving the premises,” he said.
With Openreach announcing that no new ISDN and PSTN lines will be installed from September 2023, Jola’s Andrew Dickinson said that next year is likely to see a ‘mad rush’ to sign up with mobile data aggregators for the thousands of resellers and MSPs yet to add mobile data to their portfolios.
“Many of the 29m PSTN lines in the UK are single lines costing around £9 a month – to replace these with broadband is an unnecessary and costly solution,” Dickinson said. “PSTN lines are powered from the exchange so their replacement needs to be not only cheaper, but also include battery back-up in case of a power cut.”
Whilst businesses are at varying stages of their all-IP journeys, BT Wholesale’s Thea Tanner emphasised that the ‘time to embark on migration is now’, encouraging preparing for the switch-off alongside embracing 5G technologies as key focuses for the Channel in 2023.
“The next three years will be crucial for channel partners and their customers and represent a ‘golden triennium’ of change for the Channel,” she said. “The benefits of switching earlier are apparent; early adopters will be able to ensure that their businesses have enough time and resources to realise a competitive advantage.”
Last month, BT Wholesale announced that it will be giving partners direct access to EE for the first time, launching in early 2023. Tanner added that ramping up the rollout of 5G technologies will bring ‘hyperconnectivity’ for businesses across the UK.
“5G will empower businesses to become more flexible and agile and give consumers more choice in how they work, as well as allowing for faster connectivity,” she said. “In the year ahead, this will further boost channel partners’ ability to support end users’ evolving all-IP requirements.”
One aspect that links together the trends of hybrid working, all-IP technologies, automation and the shift to the cloud is cybersecurity.
Whilst the benefits that modern technologies and flexible working patterns can bring are numerous, they also open new avenues for cybercriminals to take advantage of in many cases. Security should, therefore, be kept well in mind for Channel companies next year and beyond.
“The continued growth in cyberattacks is apparent and shows no signs of slowing down,” said Craig Patterson, SVP global channels, Aryaka. “Compounded with unsteady economic headwinds, each successful and costly cyberattack will prove increasingly devastating as margins tighten.
“Enterprises will put additional focus, and subsequent investment, in protecting their global infrastructure from asymmetric threats in hope of reducing harm when attacks occur and shoring up business resilience. Your portfolio needs to offer this additional peace of mind.”
He pointed to the rise of SASE (Secure Access Service Edge), noting that a multitude of service providers are ‘competing for a piece of the SASE pie’.
“While enterprises hope to benefit from the true promise of SASE, CIOs will be faced with the difficult task of assessing SASE providers to determine which ones will meet their expectations. Considering these challenges, organisations that are most diligent in their search will see the greatest benefits. Those who are quicker to pull the trigger will often find that they don’t get what they thought they were paying for.”
Sean Remnant, chief strategy officer at Ignition Technology Ltd said that the identity market is one of the largest forecast growth areas for the next few years.
“With the adoption of cloud and remote working the focus must really be on the security of the individual’s identity,” he said. “Identity really is at the core of everything we do, whether it’s physical building access, endpoint login, application or data access.
“We are still seeing large scale ransomware attacks and data breaches. Weak identity strategy is often the root cause of these attacks to either happen or proliferate. MFA, SSO, least privilege and governance projects will all help reduce the risk and proliferation of these attacks.”
Attracting new talent
Another commonly raised point when speaking to Channel experts is the skills gap, and how businesses should look to address this in the coming years as staffing challenges endure.
According to Jemma Byrne, VP alliances, UK and Ireland at Salesforce, the company’s research indicates that more than three quarters of people do not feel ready to operate in a digital-first world, and by 2030, nine out of ten workers will need to learn new skills to do their job proficiently.
“In 2023, a big opportunity for all types of organisations that work within the channel ecosystem is attracting diverse new talent into our sector. Let’s be clear – this isn’t just the right thing to do; it’s also the smart thing,” Byrne said.
“Prioritising diversity and inclusion will help you tap into new pools of talent and make your organisation more attractive to those that apply, it will also enable you to build deeper connections with customers. No two sales deals or clients are the same, so a combination of different views and approaches maximises your probability of success.”
To achieve a more diverse workplace in 2023, Byrne recommended that Channel businesses expand where they look for talent through rethinking ad content and language and implementing an inclusive interview process. Supporting employees from underrepresented communities and accelerating cultural change with policies that promote equality will be key, she concluded.
Aryaka’s Craig Patterson said while there is an emphasis on investment in IT training and education, the talent gap that exists is now undeniable.
“As such, DIY in-house approaches are becoming increasingly expensive, if not completely unfeasible, in meeting the growing needs of complex networks which require cutting-edge solutions,” he said. “Given this reality, enterprises will continue to see managed offers more favourably and to make up for the lack of in-house talent.
“It will also enable them to gain the benefits of complicated solutions within their enterprises without the timing, budget, and skills risks that come with implementing them on their own.”
Organisations will need to make the most of the information they have access to, he added, pointing out that aggregate WAN data gives incredible insights into the traffic patterns and bandwidth of enterprise networks, presenting a key source for overcoming the talent gap.
“Enterprises will leverage this aggregate WAN data in AIOps deployments to automate intensive tasks where possible, optimising network performance and alleviating IT teams to focus on more meaningful tasks.”
What’s next for 2023?
Paul Sherwood, director at Seven Video said that knowledge sharing and networking will play a vital role in 2023 – for introductions and relationship building as well as accessing technologies and services outside of existing portfolios. One technology he said Seven is experimenting with is interactive video, which can have a broad range of use cases.
“The scenario we’re really excited about is interactive videos where viewers could see a walkthrough of what they need to do to fix their issue, with the content dynamically changing depending on each step’s outcome,” he said.
He added, “While there’s a lot of planning and filming involved, it could save massive amounts of time and resource in the long-run and will be a true game-changer for customer service in the Channel.”
Sherwood also predicted ‘a massive year’ for events, both in the UK and internationally, whether that’s in-person, digital or a hybrid of the two.
“Our advice, especially if you’re already running an in-person event, is to investigate livestreaming. It can have a massive impact on ROI, ensuring maximum attendance as well as a truly global reach to spread the message far and wide,” he said.
For Laura Padilla, VP global partners and services at Airtable, it’s not enough for partners to simply sell solutions in 2023, given the current economic climate. With budget constraints forcing companies to revaluate the way they work, many are looking to consolidate the number of tools they’re using, she told Comms Business.
“The sheer number of tools being used by different teams is leading to silos and blind spots across the organisation,” Padilla said. “As businesses attempt to consolidate tools and dismantle these silos, partners have an opportunity to advise on how organisations can connect people and teams and empower cross-team collaboration.
“Partners should play an advisory role in this process, serving as trusted consultants who can guide businesses on how to reshape their tech stack as they examine how the current tools are being used, the ROI of each tool, and the opportunities to remove digital friction and increase organisation-wide visibility.”
Reflecting on the year behind us and looking into the year ahead, Datto’s Greg Jones said that while we are heading into challenging and uncertain times in 2023, we are also living in an exceptional time with regards to technology and business.
“When we look back through history, it is clear to see that we are in one of the best industries to manage choppy and uncertain waters in an economic downturn,” he commented.
“If you are unsure or struggling in your business, please remember to seek advice as soon as possible: business advice, financial advice, or mental health advice. Act fast, and do not struggle on your own! Good luck to all in 2023, and remember to leverage all your vendors have to offer.”
This feature appeared in our December 2022 print issue. You can read the magazine in full here.