Increased network complexity, constant security challenges, and talent shortages are driving enterprises to depend more on channel business partners, including managed service providers, system integrators, resellers and other tech providers.\nGreater use of partners by enterprises is expected to continue over the next few years, experts say.\u00a0IDC in its research on the future of industry ecosystems found that by the end of 2023, almost 60% of organizations surveyed will have expanded the number of partners they work with outside of their core industry.\nCisco, too, expects to see extensive growth in partner sales. \u201cWe believe by that by 2027, 47% of what Cisco sells will be sold through a managed service,\u201d said Alexandra Zagury, vice president of partner managed services and XaaS sales with Cisco\u2019s global partner organization.\nA variety of market-destabilizing factors \u2013 including the pandemic, supply chain shortages, continuing cloud adoption, and growth in infrastructure-as-a-service options \u2013 have created a turning point for the channel community and given enterprises more opportunities to form higher value partnerships to help fill gaps, drive innovation, and disrupt entire industries, IDC stated.\nOrganizations are expanding their industry ecosystems to include an array of different participants that complement their skill sets or provide capabilities they may not possess, IDC stated.\nManaged security services\nIn the networking arena, there\u2019s been a trend toward more closely integrating network and security operations \u2013 a shift that can lead to a variety of challenges for IT organizations.\n\u201cThe old way of looking at networking and security teams was to approach them as siloes. An organization had a network team, a security team and an application team that worked separately,\u201d Zagury said. As technology gets abstracted to platforms, and enterprises adopt a platform approach, the disciplines are coming together, she said.\n\u201cNow it's about providing secure network experiences that have observability layered on top so that you can detect attacks before they happen,\u201d Zagury said. \u201cSo, connecting all of these things to deliver customer outcomes is really important for business partners, because you can no longer separate the technology from the operation of that technology.\u201d\nThe merging of networking and security resources is one of the key trends driving an uptick in the use of managed service providers (MSP).\nRecent Cisco-sponsored research by Canalys found that MSPs expect most future revenue growth to come from endpoint and network security. \u201cMSPs are developing managed security practices faster than the resellers that have cybersecurity licensing capabilities,\u201d Canalys stated.\nDetection and response capabilities will be critical to the growth of these cybersecurity services. Currently, many customers\u2019 cybersecurity investments fail because too much focus is placed just on protection, Canalys stated.\n\u201cIt is vitally important for channel partners learn from the actions of threat actors, particularly the ways in which they breach defenses and go undetected,\u201d Canalys stated. \u201cThe challenge is channel partners know how to sell and deploy protection, but detection and response are areas that need significant resourcing and improvement.\u201d\nSpending on cybersecurity products and services that provide protection are projected to grow by 7% each year to $186 billion in 2026, driven by investment in areas such as cloud and identity security. Detection and response, meanwhile, are projected to grow by 34% each year to reach $112 billion in 2026, according to Canalys.\nNetwork observability and AI\nAnother area of investment that\u2019s on the rise is network observability.\nFull-stack observability (FSO) tools can correlate data from application, networking, infrastructure, security, and cloud systems to streamline troubleshooting and optimize performance. Cisco sees an emerging opportunity for partners to take its observability technology and package it as a managed service. \u201cYou will see us talking a lot about managed FSO and that opportunity for our partners,\u201d Zagury said. Cisco is expected to roll out new offerings for business partners at its upcoming Partner Summit.\nAI stands to strengthen the observability trend.\nAI will fuel the greatest opportunity of the next 10 years, which is to take the data and telemetry from all these different technologies and provide observability for our customers, Zagury said.\u00a0\u201cCisco can take the data from our networking systems or our security systems or collaboration systems and bring it all together to create these observability use cases, and an AI is just going to help bring this all together.\u201d\nIn the bigger picture, business partners that specialize in AI are on the path to expansion, experts say.\nSome of the larger channel providers already offer AI services.\u00a0World Wide Technology announced an AI lab where customers can compare, test, validate and train AI large language models (LLMs) such as ChatGPT-3.5, Google Bard and others through its Advanced Technology Center (ATC), for example.\n\u201cBecause our new AI lab environment is composable, different vendor components can be swapped in and out, allowing for fast customization and scaling, and enabling you to test different configurations depending on your current environment, future needs and business objectives,\u201d WWT wrote in a blog detailing the new lab.\nTraditional consulting providers such as Accenture, Deloitte, IBM Consulting, KPMG, and McKinsey & Company offer AI services as well.\nCisco is focused on how it embeds AI technologies to assist, augment and automate, Zagury said.\u00a0\u201cThen, depending on how we go to market and how we choose to monetize this, I think you'll start seeing some more partner specializations,\u201d she said. \u00a0\nNetworking opportunities for the channel\nIntegrating networking gear is also a growing area for partners, and soon channel sales of networking products will exceed channel sales of servers, Canalys predicts.\n\u201cServers are currently the largest IT infrastructure category for the channel, driven by demand for cloud infrastructure services \u2013 more than half of all servers in 2022 were shipped to the hyper-scalers,\u201d Canalys stated.\u00a0\u201cHowever, this will change by 2027, as channel sales of networking products surpass servers for the first time.\u201d\nToday, the combined sales of switching, wireless LAN and routers account for 36% of infrastructure sales through the channel, according to Canalys. This will grow to more than 40% over the next five years, according to Canalys.\n\u201cNetworking sales are booming, driven by Wi-Fi 6 rollout to support hybrid working in offices, as well as digital transformation across as education, healthcare, retail, and manufacturing,\u201d Canalys stated.\nAdditionally, campuses will undergo a major refresh cycle over the next three years, as Wi-Fi 7 becomes commercially available. The new standard promises to boost speeds by up to four times compared to Wi-Fi 6. It will require networks to be rearchitected with at least 50G access and 100G and even 400G core switches.\nOn the workforce front, IT staffing remains a perennial challenge; the demand for skilled professionals with sufficient knowledge and experience in emerging technologies outweighs the supply, Zagury said. \u00a0\u00a0\nEnterprises are experiencing exponential innovation, and with that comes exponential complexity, which makes it very hard to keep people up to date and have the right talent at the right place, she said. \u00a0\u00a0\n\u201cIt\u2019s rare that any single vendor can offer, say, networking and security services end to end. And that\u2019s when partners can get called in to stitch things together in a single services stack that can deliver the outcome an enterprise business wants,\u201d Zagury said.