The channel today can be roughly divided into two segments: traditional service providers and resellers, and an emerging channel comprised of digital agencies, consultants and highly specialized shops. But in just another few years, that first group may have disappeared.

Many partners in IT and telco started their businesses based upon commodities from the vanguard behemoths. Maybe you’ve had your resale business going since you first signed on with IBM in the early 80s, Compaq in the mid-80s or Microsoft in the early 90s. If so, you started in the golden age of the channel.

“You could write your own ticket,” said McBain. “These channels grew extremely fast through these times.”

But you can do the math. If a partner launched their VAR or MSP 30 years ago, they’re nearing retirement today. In fact, 40 percent of channel owners plan to retire by 2024. Think about that: nearly half of the channel will be spending their days on the golf course in the next seven years.

The exodus has its origins in 2008, when the overall economy convinced many partners to take early retirement. Since 2008, we’ve already seen a 36 percent drop in the number of IT channel firms. But the economy in 2017 is booming. Unemployment is at an all-time low, the stock market is at an all-time high—and channel firms are still dropping like flies. McBain says IT is the only industry out of all 27 macro sectors where that’s happening.

So what’s the deal? After all, millennials are the largest generation to enter the workforce in our collective recent memory. The youngest millennial today is only about 23 years old; the entire generation is (ostensibly) engaged in the American workforce. If millennials are entering the workforce in such remarkable numbers, why is the average age of a business owner in the channel in the late 50s?

When it comes to tech, we can probably all agree that the channel is one of the least ‘sexy’ segments. In an era when every company is a tech company, millennials interested in tech don’t need to consider the channel.

“You can work for a car company, you can work for a hotel company, you can work for a peanut butter company and you’ll still use technology,” said McBain.

The same premise applies to the job function tied to the technology that millennials are gravitating toward. If you want to work with technology, today you don’t have to go into IT. The rise of the line of business (LOB) buyer means you can go into accounting, marketing, human resources or any other number of job functions and still be working at the leading edge of tech solutions.

That’s not to say that millennials aren’t entering the channel at all. McBain says that 75 percent of the channel will be millennials by 2024. But they aren’t building MSP practices or selling Microsoft Office licenses. They’re forming digital agencies, consultancies and specialized shops. The channel is changing, and in another seven years it will look nothing like the channel so many VARs and MSPs buttered their bread with in the past.

We’ll dive deeper into this new “shadow channel” and the impact of the LOB buyer in subsequent parts of this series, so stay tuned to find out more and hear what else is happening down here in Austin at Channel Partners Evolution.