CompTIA's 6th Annual State of the Channel

2. Generally Optimistic 63% Mixed Feelings 17% Generally Pessimistic 16% Don’t Know 4% Source: CompTIA’s 6th Annual State of the Channel | Base: 351 U.S channel firms How Firms Are Feeling about the Future of the Channel

3. Reasons to Be Optimistic About Channel’s Future 1. Cloud computing opening new doors 2. Broader use of tech by all types of customers ups need for IT experts 3. Complexity of today’s solutions and services 4. Customer demand for managed services 5. Customers want internal IT free to work on strategic projects 6. Customers still want a local provider to be a “trusted advisor” 7. Demand for vertical industry expertise 8. Vendor direct sales insufficient to cover full market Note: rank order listings are useful for summary purposes, but should NOT be interpreted quantitatively. For example, the first-ranked item is not necessarily 8 times more important than the eighth-ranked item. Source: CompTIA’s 6th Annual State of the Channel | Base: 351 U.S channel firms

4. Reasons to Be Pessimistic About Channel’s Future 1. New types of competitors (e.g. telecom providers) 2. Vendors increasingly going direct 3. Aging of the channel/lack of younger generation filling void 4. Cloud computing and shift away from on-premises IT 5. Skills gaps for emerging/complex IT 6. General business challenges 7. Customer access to price and feature transparency online 8. Wider availability of purchase options/customer self sufficiency 9. Many aspects of IT easier to deploy and manage internally Note: rank order listings are useful for summary purposes, but should NOT be interpreted quantitatively. For example, the first-ranked item is not necessarily 8 times more important than the eighth-ranked item. Source: CompTIA’s 6th Annual State of the Channel | Base: 351 U.S channel firms

5. Things Needed to Ensure Optimistic vs. Pessimistic Future 39% 36% 34% 33% 40% 40% 31% 32% 33% 35% 34% 38% Vendors committing to partnership/decreased conflict Support from industry trade assocations Younger generations embracing channel More widely available/valuable certifications Training (business & tech) Availabilty of skilled IT workers 2016 2015 Source: CompTIA’s 6th Annual State of the Channel | Base: 351 U.S channel firms

6. Cloud & the Channel: Glass Half Full or Half Empty? Source: CompTIA’s 6th Annual State of the Channel | Base: 351 U.S channel firms 39% of channel firms say the opportunity in cloud computing is the top reason to be optimistic about the channel’s future And yet… Another 30% say cloud computing is a leading reason to be pessimistic about the channel’s future

7. Shifting Views on Cloud’s Channel Impact 1% 7% 30% 63% 1% 20% 40% 37% Negative Mixed Positive Extremely positive 2016 2014 Source: CompTIA’s 6th Annual State of the Channel | Base: 351 U.S channel firms

8. Shifting Perception of Cloud’s Impact on Customer Relationships 12% 17% 71% 16% 24% 60% No change Generally weakened Generally strengthened 2016 2014 Source: CompTIA’s 6th Annual State of the Channel | Base: 351 U.S channel firms

9. Channel Firms Expecting Influx of Net-New Business Past two years 17% 46% 37% Mix of new and existing Existing New Next two years 15% 39% 46% Same balance More from existing More from new Source: CompTIA’s 6th Annual State of the Channel | Base: 350 U.S channel firms

10. Expectations for Revenue Growth by Tech Area 1. Cloud infrastructure (NET 61%) 2. Security (NET 59%) 3. Mobility solutions (NET 59%) 4. Backup/DR (NET 58%) 5. Storage (NET 67%) 6. Database/data analytics/BI (NET 57%) 7. Cloud SaaS (NET 57%) 8. Custom application development (NET 5%) 9. Business process automation (NET 56%) 10. Compliance as a service (NET 54%) Source: CompTIA’s 6th Annual State of the Channel | Base: 351 U.S channel firms Nearly three quarters of firms with an optimistic outlook for the channel’s future are predicting growth in cloud infrastructure and cloud SaaS sales. That’s nearly double their more pessimistic channel counterparts.

11. Channel Firms Less Content with Vendor Relationships 7% 52% 41% 15% 45% 39% Partly satisfied/partly not satisfied Mostly satisfied Very satisfied 2016 2015 Source: CompTIA’s 6th Annual State of the Channel | Base: 351 U.S channel firms

12. Main Reasons to Drop a Vendor Partner Program 1. Cost of membership 2. Insufficient pre- and post-sales support 3. General difficulty in doing business with vendor 4. Vendor products no longer fit customer need or business model 5. Constantly changing requirements 6. Low margins, minimal discounts/rebates 7. Channel conflict with vendor’s direct sales team 8. Insufficient technical training Note: rank order listings are useful for summary purposes, but should NOT be interpreted quantitatively. For example, the first-ranked item is not necessarily 8 times more important than the eighth-ranked item. Source: CompTIA 6th Annual State of Channel: Base: n=350 IT channel firms

13. Vendor Benefits Partners Find Less Useful Today than Past 15% 21% 28% 31% 32% 31% 33% Certifications Business training Assigned channel account manager Technical training Backend rebates Upfront/volume discounts Sales spiffs Source: CompTIA’s 6th Annual State of the Channel | Base: 350 U.S channel firms Just 12% of channel firms report that each of the following vendor resources remains important to their business. The No. 1 reason vendor benefits have declined in significance is that channel firms are relying more on their own sales & marketing efforts.