News Feature | October 26, 2015

How Big Is The IT Channel?

By Ally Kutz, contributing writer

How Big Is The IT Channel?

The IT channel has grown 4.5 percent year over year, according to new information from CompTIA’s 5th Annual State of the Channel report.

The report, released earlier this month, stated, in total, there are 125,502 establishments in the IT channel, with a breakdown as follows: 160 large channel firms with 500 or more employees; 1,388 medium channel firms with 100 to 499 employees; 13,680 small channel firms with 10 to 99 employees; and 110,274 micro channel firms with 1 to 9 employees. CompTIA cited statistics from the U.S. Commerce Department’s North American Industry Classification System (NAICS) in their study, a standard in the industry.

Also, of those 125,502 establishments, 107,368 are solutions providers, integrators, consultants, systems builders, and managed services providers (MSPs). VARs, business continuity/disaster recovery, and software installation services covered 14,989 establishments, while 3,145 were computer facilities and management services.

In addition to the channel establishments listed above, the study revealed there are 208,463 self-employed sole proprietors working in capacities that could very well be related to the IT channel, including providing IT consulting services, Web design, mobile app development, or technical support. Adding it all together, that’s almost 334,000 establishments or individuals working in the IT channel.

Another component in channel sizing is estimating the revenue flow through or influenced by the channel. According to the report, “The traditional rule of thumb is about 70 percent of non-consumer IT hardware and software is sold through indirect channels. This covers the different types of channel partner firms, such as VARs, solutions providers, integrators, MSPs and related, as well as distributors, retailers, and any other type of intermediary involved in providing the product or service to the customer.”

When applying the 70 percent rule to estimate U.S. hardware and software sales, CompTIA says we’re looking at just about $260 billion flowing through the channel or being influence by it. And that number is expected to grow. The survey found 47 percent of channel firms are expecting growth in the coming year, with 56 percent anticipating growth in projects and 59 percent looking at growth in recurring revenue over the next year.

The complete report is available to CompTIA premier members; click here for information.