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Summary

COVID-19 is devastating the global economy. Workers are being furloughed or laid off, many of them from businesses in the small and medium enterprise (SME) and mid-market segments. The repercussions of the pandemic on these businesses put pressure on the channel. Service providers and channel partners that work together to help customers weather today’s crisis are reinforcing business relationships for a post-pandemic future.

Global reversal of fortunes

Omdia’s ICT Enterprise Insights 2019/20 – Global: ICT Spend and Sourcing, published in October 2019, surveyed enterprises to gain insights into their challenges, budgets, and technology priorities. The survey asked businesses with 100–10,000+ employees about IT budget changes from 2018 to 2019 and what their expectations were for 2019 to 2020. The responses reflected an expected year-over-year increase in planned IT spend for businesses of all sizes including SMEs and the mid-market, shown in Figure 1.

What a difference six months makes. The positive outlook has undoubtedly been dimmed by COVID-19, as the US, Europe, and other parts of the world face the threat of a recession. SMEs and mid-market enterprises around the world have been hit hard by the pandemic. These businesses often lack the financial and technical resources that will help them through the downturn without government assistance. Companies had to quickly pivot to home-based workforces while trying to maintain business operations, a requirement that most were unprepared to take on so abruptly.

SMEs and mid-market enterprises are the bread and butter of the indirect channel. While service providers do serve this segment directly, they rely heavily on channel partners to work with these customers. In recent years, large providers have intensified their focus on this segment and upgraded channel programs as an effective path to reach this base. The repercussions of the pandemic on SMEs and mid-market companies will put financial pressure on the channel, particularly smaller agents and resellers. Service providers are stepping in to support these customers and the agents that serve them, efforts that will benefit all three parties in the long term.

Support through a crisis

As in the rest of the world, SMEs in the US are struggling. There are financial assistance programs available at federal and state levels, but these are reportedly difficult for businesses to access, and they offer only temporary support. Service providers and channel partners are stepping in to help customers keep their businesses functioning through the crisis. Companies that were forced to make rapid unplanned transitions to cloud-based voice and conferencing services for remote workers can take advantage of service providers’ extended product trial periods and reduced prices for those services. Providers including CenturyLink and Windstream are promoting accelerated service delivery to business customers to get them up and running quickly. AT&T and CenturyLink are extending 90-day trials of their WebEx conferencing offers. AT&T is offering 90 days of free call forwarding to existing IP Flexible Reach SIP trunking customers and expanded meeting packages. CenturyLink has made its Engage UCaaS available at a reduced monthly rate, with two months free and no setup fees. The shift to home-based work also raises the need for secure remote connectivity, and CenturyLink is offering a free increase in licenses for Adaptive Network Security (ANS) and Network Based Security (NBS) services.

Windstream is taking a broader approach, complementing service discounts with more direct support for partners. Like its peers, the provider is offering 90-day trial periods for its UCaaS offers, OfficeSuite UC, and HD meeting services. But Windstream is helping partners more directly by waiving chargebacks for “as-is” renewal credits to help partners secure their residual stream for another contract term and offering an 11× commission accelerator on sales of OfficeSuite UC.

Large master agents are stepping in as well, expanding educational resources to help subagents and customers navigate a new work environment. Videos and blogs about workforce solutions, implementing a remote workforce, securing remote connectivity, and other relevant topics are available to help subagents transition their own companies and to work with their customers. Some master agents have also implemented financial assistance options to help subagents. Intelisys, for example, is offering its agents a one-year interest-free bridge loan to help them through the crisis.

Chaos spurs transformation

The shelter-at-home orders and social distancing requirements of COVID-19 will have a lasting impact on future business models for channel partners and their customers. In a future that will surely call for fewer in-person sales meetings, the need for channel partners to have an effective digital engagement strategy will be greater than ever when developing and maintaining connections with customers. Master agents and distributors should support these efforts by expanding marketing support beyond product slicks and email programs to include tools for marketing automation and social media engagement to educate subagents and resellers on new marketing methods.

Channel teams should be thinking now about how they can help customers operate in what will certainly be a different business environment. Businesses that survive the crisis will reevaluate how employees will work and how the business will operate in the coming years. When that happens, channel partners must be prepared to be on the front lines to support these customers. They can review services that are in place and what will be required over the longer term and should create a business continuity strategy to mitigate the impact of future outbreaks or other disruptions. If we have learned anything from COVID-19, it is that we need to prepare for the worst and hope for the best.

Appendix

Further reading

2020 Trends to Watch: Wholesale Telecoms, GLB006-00037 (January 2020)

COVID-19: Telco and Government Responses to the Global Pandemic, GLB007-000372 (April 2020)

ICT Enterprise Insights 2019/20 – Global: ICT Spend and Sourcing, PT0155-000001 (October 2019)

“AT&T Partner Solutions’ engagement models reflect changing channel needs,” GLB006-000043 (April 2020)

“CenturyLink’s international expansion and automation initiatives underpin wholesale channel growth,” GLB006-000040 (February 2020)

“COVID-19 in private networks,” ENS003-000048 (April 2020)

“This virus changes everything (about how you work),” ENS001-000103 (March 2020)

Author

Cindy Whelan, Principal Analyst

[email protected]

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