Now that we’ve officially ushered in the new year, it’s time to get back to work and focus on winning in 2017. From colossal M&A deals to some of the largest cyber-attacks in history, 2016 brought a lot of excitement to the channel, and we’re expecting more of the same this year. Last January, we made a few forecasts that turned out to be fairly accurate, so we decided to take another stab at it this time around.We present to you our top predictions for 2017:
Continued M&A Activity
The channel landscape significantly shifted last year as a result of several groundbreaking M&A deals. Some of the more notable agreements we saw include Verizon's acquisition of XO, CenturyLink’s purchase of Level 3, Zayo’s merger with Electric Lightwave, and EarthLink’s acquisition of Windstream. This activity led to some unprecedented events, one of which being CenturyLink’s sale of its data center and colocation business.
There will be much more of this in 2017, with even larger and more disruptive deals. In addition to seeing more carriers acquire smaller cloud, security, and SD-WAN startups to expand upon their offerings and stay competitive, we will witness historic mergers between corporate giants. The first will be the finalization of the Verizon and Yahoo deal, which has been delayed due to two massive data breaches on the struggling internet giant.
Out of all the emerging technologies that have taken the channel by storm, none have generated as much buzz as SD-WAN. 2016 was a landmark year for the solution, with one of its most prominent providers, Velocloud, partnering with major carriers like AT&T, Vonage, and EarthLink. We also saw CloudGenix and Viptela launch their first global partner programs, and Silver Peak’s EdgeConnect SD-WAN business double in revenue quarter over quarter.
Because of its thunderous momentum, and the fact that executives and channel leaders from the likes of Cisco and HP are leading direction at SD-WAN companies, we expect the technology to break new ground in 2017. Market intelligence provider IDC agrees, forecasting a compound annual growth rate of 90 percent up until 2020. We’re not necessarily sold on 90 percent, but we do predict that growth will be significant enough to encourage partners to learn more about this solution. It’s more than likely that their customers will be asking about it throughout the course of the year.
Hardware Sales Continue to Decline
Just recently, multinational technology conglomerate Cisco denounced its long-time standing as a hardware company, insisting that 80 percent of its engineers are focused on software. This was just one of 2016’s many indicators that the hardware market is floundering. We’re seeing more of these traditional equipment providers transform into software companies because demand in the space is greater. Software is more appealing to businesses because it enables a transition from an OpEx to a CapEx model, and it’s much easier to implement and manage.
Last March, IDC reported that sales of data storage hardware declined 2.2 percent year-over-year. The report also noted that companies like Dell and IBM lost money in this sector. We predict that we will continue to see losses across multiple areas of the hardware market in 2017 as more businesses seek to reap the benefits of software. Additionally, we will see more carriers do as CenturyLink and Verizon did and sell their data center businesses before it’s too late.
IoT Security Escalates
In somewhat of an unexpected turn for the worse, we saw some of the largest cyber-attacks in history originate from botnets comprised of IoT devices. Two shining examples that come to mind are the debilitating DDoS attacks on DNS provider Dyn’s network and security expert Brian Krebs’ website. Each of these incidents was caused by massive amounts of traffic sent by objects like DVRs, webcams, and automated thermometers that were compromised by the Mirai bot.
We haven’t seen the last of these attacks. In fact, we predict we will see them more frequently and on a much larger scale in 2017. IoT is in its infancy, and that means security threats that leverage it are too. With more devices being connected to the internet, more opportunities grow for hackers to leverage them for nefarious purposes. We may even see more serious attacks in delicate verticals like healthcare and finance, forcing leaders to band together to work towards tightening IoT security.
It will be interesting to see how accurate we are as the events of the year unfold. Regardless of whether we’re wrong or right on any of the above, we are certain that 2017 will be an exhilarating and prosperous year for the channel. We look forward to being right by your side during these exciting times and supporting you every step of the way.
About the Author
Adam Dawson is TBI’s Marketing Communications Manager. As the organization’s wordsmith, he is responsible for creating engaging content and carrying out internal and external communications programs. This includes circulating information to TBI’s agent partners, educating them on hot topics in the industry, and guiding them to the best provider products and solutions for their portfolios. You can reach Adam at firstname.lastname@example.org connect with him on LinkedIn.