"Nobody wants to be on the front page of the local paper," Anthony said.

Nearly a third of solution providers surveyed said K-12 education was their fastest-growing sector within SLED, while more than a quarter cited each state government and local government as their fastest-growing area. The remaining 17 percent of survey respondents pointed to higher education as their fastest-growing SLED sector.

Vendors are also supporting solution providers looking to up their SLED game, with nearly two-thirds of channel partners surveyed reporting that they've seen an increase in supplier funding to drive customer demand and marketing for SLED customers. The solution providers surveyed by The Channel Co. derived roughly 30 percent of annual revenue from SLED and 15 percent of yearly sales from federal accounts.

Solution providers said were the lead on more than 70 percent of state accounts, according to the survey, and were far more likely to apply for SLED contracts individually than through an aggregator. Solution providers cited competition, pricing, the bidding process and budgets as the biggest challenges they face in growing or expanding their SLED businesses.

Local government is the most common type of SLED customer served by solution providers, with nearly four out of five survey respondents indicating they do work for municipalities. Between two-thirds and three-quarters of respondents have state government, higher education, or K-12 education customers, according to the survey.