As the UK emerges from a second lockdown it looks like it will not be a smooth road ahead as we transition into 2021.The experience of the first lockdown, and now the second, demonstrates how a gradual economic recovery hinges on a viable resolution to COVID-19, a vaccine, and the continued need for government intervention.

A vaccine on the horizon creates a more positive outlook

But the encouraging news of several vaccines proving to be highly effective suggests that as we emerge from winter, we are going to see a much more positive scenario. By the time this gets published we will know how the future relationship between the UK and EU will work and we could see GDP growth in 2021 oscillate from 8.4% to 4%.

Looking more deeply into what is happening from a channel perspective, there are several challenges partners are facing.  For example, in July Cisco said it was cutting 6,500 jobs, or nine per cent of its workforce, to better focus its business and reduce operating expenses by $1 billion a year. The CEO of Cisco, Chuck Robbins said: “Based on the many conversations we’ve had with our customers around the world, we believe we have perspective into how they will adapt their technology strategies for the future to ensure greater resiliency, agility, and innovation. We know how to adapt our business’s strategy to align with where our customers are headed.”

Switching from hardware to software

As a result, Cisco is continuing to switch its business from traditional hardware – servers, routers, and other enterprise products – to software. The company is going through a change that will merge its enterprise networking and data centre business, as well as expand its cloud solutions to include its server products.  Without a doubt this is impacting the channel.

Add to this the shock to the economy and channel partners will be faced with remodelling and restructuring their business to thrive in this environment. They are having to do all of this against a backdrop of massive uncertainty. We were due a slow down, so that much was predictable, but not one as deep as that which the pandemic has caused.  This can be both a source of great concern but also of major opportunities.

The question is, do we lie down and let it beat us or do we look at the opportunity and innovate to take our businesses to greater success?

Refocusing the business

So, as we head towards the end of 2020 and into the New Year, most businesses will be thinking about several key focus areas:

• How do we maintain and grow revenue?
• Where can we make efficiency gains?
• How can we manage costs?
• How do we ensure that we invest in the right areas and deliver what our customers now need?
• How can we automate more and reduce business risk?
• How can we remain flexible and agile to change quickly if we need to?

Some might also be considering how to do this with a reduced workforce. If you take the concept of reducing headcount, you can only achieve this if you automate so that you can manage tasks digitally.  This allows partners to either do more with the same number of employees or do the same with fewer people. These are the dynamics that businesses will be grappling with going into 2021. One thing for sure, is that partners must break old paradigms and find new ways of achieving their goals.

And as businesses around the world accelerate their digital transformation plans and migration to the cloud, most channel partners will also be looking at how they transform their business from selling hardware to software and annuity revenue to increase profitability and viability.

Moving to an annuity business

But you cannot become an annuity business overnight.  This will require investment, but if channel companies don’t go down this route, they run the risk of being less relevant in the future.  These shifts in the market will require different skills, experience and a new way of thinking with new processes, methodologies – right down to how you incentivise employees.

Whilst the challenges of moving to the new model are not to be underestimated, if done right, the rewards can be significant. Not only in revenue but better margins, profitability and consistency of income.

There are still hurdles that lie ahead, but 2021 is looking much more positive now that vaccines have been found and how well we take advantage of what’s coming is down to us. Many of us have been through difficulties in our careers but with some resilience, creativity, a focus on innovation and with some hard work we can come out the other side in a good place. Here at Vortex 6, we are a services-led business, with expertise in our people supported by a leading software solution.  We are not just handing over a piece of software and letting our partners get on with it, we back it up with expertise to help guide our partners through how to optimise their relationship with vendors.

Uncertainty will become the norm

Businesses are looking to optimise their investments and one way of doing that is not only by automating but working with an organisation that has the expertise that they would previously have employed themselves. Again, we have transformed ourselves from being a project-based organisation to one where we have become integrated into our customers’ process to help get the most out of the changes that are with us.

The uncertainty caused by the pandemic and geo-political issues such as the American elections and Brexit are not to be taken lightly, but much of it is out of our control. Together, we must focus on what we can change rather than what we can’t.