October 16, 2019
Cloud is top driver of Channel Partner use in the UK and across EMEA, says Equinix study
Survey of IT decision-makers underlines long-term Channel shift from hardware to cloud services; study also finds cost-effectiveness remains top reason for enterprise to work with Channel partners
London, UK – Oct. 15, 2019 – Equinix, Inc. (Nasdaq: EQIX), the global interconnection and data centre company, today published the findings of an independent survey exploring the views of senior enterprise IT professionals on the future of the Channel industry. The results show cloud is now the number one driver of Channel engagement, with almost half (48%) of the 836 EMEA IT decision-makers surveyed, and 47% of those surveyed in the UK, using the Channel to access cloud-based services. With Gartner highlighting that by 2025, 80% of enterprises will migrate entirely away from on-premises infrastructure to colocation and the cloud1, these findings suggest companies are utilising the Channel to reduce the complexity of such a critical infrastructure upheaval.
Along with the shift driven by cloud, the study highlighted other areas where services traditionally managed in-house are beginning to move to the Channel. Security management – an area that enterprises have previously been reluctant to outsource – was the second highest-ranked service for which Channel partners are being utilised, named by 39% of respondents. More than one-third of decision-makers (34%) are using Channel partners to access interconnection, making it the third-highest priority service – an ongoing trend that is reflected in the growth of Equinix’s own Channel Partner Program. IT decision makers in the UK see things slightly differently – ranking Channel services around security management and interconnection equally, at 31%.
Enterprise IT decision-makers were also asked why they choose or might consider working with Channel partners. Cost was the number one priority across almost every market, with over half (51%) of EMEA-wide respondents overall stating they choose to work with Channel partners because it’s more cost-effective than other routes to market. This figure is even greater in the UK, rising to 59% of those surveyed. Being able to access a better breadth of services came a close second (46% of respondents overall, and 52% of UK respondents), with enterprises in the Netherlands and Turkey naming this as their main reason for working with Channel partners, while convenience was the key driver for decision-makers in France.
- On average, enterprise IT decision-makers across Europe spend just under a quarter (24%) of their budget with the Channel. This lowers to a fifth (20%) of IT spend in the UK.
- The average number of Channel partners engaged per enterprise across EMEA is nine, although this varies significantly by country. France and Germany are both above average with 12 and 11 Channel partners per enterprise, respectively, while the UK (7) and Finland (6) are the countries where companies work with the fewest Channel partners on average.
- The multi-partner use cited by respondents shows a need for vendor-agnostic platforms that enable businesses to address IT challenges in today’s digital economy. Equinix’s Channel Partner Program is based on joint value propositions developed together with partners. Resulting solutions utilise the technologies of multiple vendors and the unique skills of the partner to comprehensively meet customer requirements. This collaboration is critical for success as the Channel industry shifts in line with new enterprise needs.
- Highlighting the value of solutions like the Channel Partner Program, a staggering 82% of IT decision makers in the UK consider interconnection to be important to their business. This is particularly noteworthy given the findings in Equinix’s third annual Global Interconnection Index (GXI Vol.3), a market report which this year outlines that for every 500 employees added to a company, the need to increase interconnection bandwidth almost doubles, to support connecting users to business data.
- The GXI Vol.3 also predicts that interconnection bandwidth will grow at a 51% CAGR in EMEA, contributing 38% of interconnection bandwidth globally, with strong data compliance regulations driving the growth of interconnection bandwidth in healthcare, government, business and professional services. Despite this expected growth, at least 1 in 5 (22%) IT decision makers in the UK say they have struggled to expand into new markets due to a lack of Channel support, with over one-third (36%) naming EMEA as the region in which they have had the most difficulties.
- Nearly 4 in 10 (38%) respondents across EMEA highlighted that Channel partners have room to improve in providing seamless solutions that are easy to implement without disruption to enterprises. UK respondents feel more positively about this, with only 31% citing this as an area for improvement.
- Having a good understanding of customers’ business and budget was also highlighted as an area for improvement for Channel partners according to one-third of respondents overall; this was highlighted as the key area for improvement by respondents in Turkey, with almost one-third (32%) of those surveyed in the UK agreeing.
- When asked about what will differentiate Channel partners and lead enterprises to work with them, quality of service was universally named the most important differentiator by all of the 8 surveyed markets, with 52% of responses overall. This rose to 56% for the UK. Demonstrating an understanding of the customer’s business was the next most important (33% of respondents). Though in the UK, it was pricing structures that were called out in second place, at 42%.
- Oren Yehudai, Senior Director, EMEA Channel Sales, Equinix:
“The move to the cloud has been incredibly exciting to see. By 2021, European spend on cloud will hit £100 billion. Enterprises must make critical decisions on IT infrastructure as they adopt cloud services or fail to compete in the digital economy. The speed of demand and consumption of cloud services is both a huge opportunity and a threat for many resellers. Channel players have to be ready to support this, and for many that means making significant changes, from accelerating the development of consulting and ‘cloud-complementing’ services to adapting to a monthly billing system or changing compensation plans to match new purchasing patterns.”
- Gordon McArthur, CEO, Beeks
“As enterprises continue to move to the cloud, shifting their IT infrastructures in line with new digital demands, Channel players are joining forces with other partners and vendors to be able to offer a complete solution to this development. Collaborating in this way allows us to create unique and flexible services that cater to the needs of the modern digital business. The Equinix Channel Partner Program has enabled us to create these tailored end-to-end solutions, developing joint offerings which allow us to bid for new business.”
- Russell Poole, Managing Director, UK, Equinix:
“We heard from analyst firm IDC that at least 30% of Channel industry players will not exist in the format we know them today by 2021. As the findings of this study suggest, many of these changes will be driven by cloud, and it will be the Channel players that are agile and respond to these changes, that will survive and thrive. We are already seeing this agility in the UK, with over half (62%) of those surveyed working with four or more Channel partners. But with an abundance of new players entering the Channel market, how these enterprises differentiate themselves in a time of technological transformation will make all the difference.”
- Matt Williams, Head of Telstra EMEA, Telstra:
“Strong partner ecosystems allow customers to connect to their partners of choice, enabling flexibility and bespoke services. Our own research found successful digital transformation relies on much more than the right technology. It requires the right culture, the right people, the right partnerships and processes to support them. Organisations underestimate the value of finding the right partners in their digital journey. Successful partnerships not only fill gaps in expertise, they can bring long-term value. Many businesses are finding success in migrating from a purely transactional model to values-based partnerships.”
- Eugene Bergen Henegouwen, EMEA President, Equinix:
“Our Channel Partner Program is one of our assets and has grown steadily since its inception in 2015. We are constantly looking at ways to expand the program further because we see it as a key way to serve the increasing interconnection needs of the enterprise market. The fact that one-third of the enterprise leaders we surveyed named interconnection as a core reason for working with Channel partners, underlines why this has been such an important strategy for Equinix, and why our Channel Partner Program will continue to be a key area of focus for our business in 2020 and beyond.”
Global Interconnection Index Volume 3
Gartner: 7 Elements for Creating a Pragmatic Enterprise Cloud Strategy
Equinix,Inc. (Nasdaq: EQIX) connects the world's leading businesses to their customers, employees and partners inside the most-interconnected data centers. On this global platform for digital business, companies come together across more than 50 markets on five continents to reach everywhere, interconnect everyone and integrate everything they need to create their digital futures. www.Equinix.com
About the study
The independent study surveyed 836 IT decision-makers from enterprises across 8 EMEA countries (UK, France, Germany, Netherlands, Ireland, Finland, Turkey and the UAE). 103 of those surveyed are based in the UK. Respondents were selected for participation from Dynata’s online panel. The survey was conducted online between 01 and 16 August 2019.
About the Global Interconnection Index (GXI)
The Global Interconnection Index, published annually by Equinix, delivers insights that drive digital business advantage by tracking, measuring and forecasting growth in interconnection bandwidth—the total capacity provisioned to privately and directly exchange traffic with a diverse set of counterparties and providers at distributed IT exchange points. The Global Interconnection Index is the industry’s only market study that projects how interconnection growth and access will unfold through 2021. The report serves as a market baseline that analyzes the deployment profile of thousands of ecosystem participants using carrier-neutral colocation data center providers globally. This data was combined with local and regional market data (including macroeconomic trends, market demographics and industry concentrations), to form a weighted demand multiplier to assist in predicting growth and assess impact on digital business transformation. A detailed methodology description is included in the Global Interconnection Index.
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX data centers and developing, deploying and delivering Equinix products and solutions; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenues from customers in recently built out or acquired data centers; a failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; risks related to our taxation as a REIT; and other risks described from time to time in Equinix filings with the Securities and Exchange Commission. In particular, see recent Equinix quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.
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1 Gartner Identifies the Top 10 Trends Impacting Infrastructure and Operations for 2019 https://www.gartner.com/en/newsroom/press-releases/2018-12-04-gartner-identifies-the-top-10-trends-impacting-infras