Channel Optimism Grows Despite Economic Headwinds

Adam Simon, Global MD of CONTEXT

Resellers are more optimistic about the coming 12 months than they were a year ago and backed by robust growth in 2019, are driving investment in both traditional and emerging product categories such as IoT, according to CONTEXT, the IT market intelligence company.

The analyst’s annual ChannelWatch report is based on the results of a survey of over 6,500 resellers across UK & Ireland, France, Germany, Spain, Italy, Portugal, Poland, Czechia, Baltics, Russia, Turkey and South Africa.

It found that while 3.4% growth in distribution in the nine months ended 30 September 2019 was slower than the previous year’s figure of 6.7%, there’s great momentum in the industry, with more new resellers coming into the market than those who are leaving in virtually every country.

Channel businesses are both sticking with what they know, such as product areas including PCs and monitors, and are also investing in new technologies including smart home and the hyper-converged infrastructure (HCI) that’s driving datacentre growth.

For the first time, the ChannelWatch report breaks down respondents into B2B and B2C resellers:

  • for B2B, the top areas of investment over the coming 12 years are: cloud (49%), networking (46%), cybersecurity (38%), workplace optimisation (31%), datacentre solutions (24%), and IoT (18%).

  • in the B2C space it was PCs (57%), software (39%), storage (37%), components (36%) and printers (36%). PCs remain a key area of growth despite a considerable drop in the number of units sold across all countries except for Germany. This is because of a focus on higher-end SKUs like gaming PCs and ultra-light/portable models.

“Although B2B resellers expressed a more positive opinion of the coming year than B2C resellers, sentiment overall has strengthened considerably overall across the region, driven by a sharp increase in optimism in the UK and Germany. This is despite continued Brexit-related uncertainty and slowing GDP in Germany”, said Adam Simon, Global MD of CONTEXT. “It appears that many resellers experienced far higher growth last year than the headline figure for revenues in the distribution channel. We believe this is due to corporate digital transformation efforts, investments in cloud and IoT as well as classic drivers like the Windows 10 upgrade.