WHY THIS IS IMPORTANT TO WISCONSIN: Wisconsin companies considering expanding to Canada could benefit from learning about the country’s channel partner ecosystem.
Canada is home to nearly 50,000 companies in information and communications technology (ICT), and while growth in that sector was slow in 2023, it still outperformed the country’s overall economy in terms of output, employment, and innovation.
A government report said 48,686 ICT companies brought in a combined revenue of $281 billion ($205 billion USD) in 2023 and employed more than 812,000 workers. Those employees had an average annual salary of $96,578 ($70,588 USD)—54% higher than the average Canadian earns.
Most firms in the ICT sector involve software and computer services. The majority of them are small; 41,000 of the firms employ fewer than 10 people. There are also 160 large companies with more than 500 employees, including subsidiaries of foreign multinational corporations.
According to Grow Trade Consulting, the channel partner system plays a significant role in supporting the nation’s tech infrastructure by facilitating collaborations within the technology industry.
Channel partners are described as companies such as resellers, service providers, vendors, retailers, or agents that partner with another organization to market or sell its services, products, or technologies.
These relationships contribute greatly to the distribution, marketing, and sales of technology products and services. Value-added resellers comprise a large portion of the channel partner system, followed by managed service providers, technology consultants, cloud service providers, and systems integrators.
A July 2023 report by IDC Canada said that because of changes in the tech industry, channel partners are now 150% more involved in providing digital transformation solutions than before the COVID-19 pandemic. The study showed that a vibrant channel ecosystem can provide significant business growth opportunities while a stagnant channel can create challenges to the industry’s growth.
The study found that companies are shifting to cloud services, viewing each other less as competitors and more as part of a connected system, and increasing the number of mergers and acquisitions to better meet their clients’ needs and to improve overall security.
The study also found that for the typical channel partner:
• Recurring revenues have taken on a more important role, increasing from 29% of revenues in 2019 to 42% in 2022.
• Digital technologies that constituted 18% of revenue in 2019 rose to 35% in 2022.
• Canadian channel partners are now 150% more involved in providing digital transformation solutions than before the pandemic.
Understanding the channel partner ecosystem can help Wisconsin ICT companies that may seek relationships within Canada’s tech industry.
