Why this year will be an interesting ride for IT distribution

by Alex Mesguich, VP of Enterprise Research

Last year saw a number of major strategic changes in vendors such as Lenovo, Dell and HP, the impact of which is yet to be felt by the IT channel. Let’s take a closer look at some of the changes and what opportunities and challenges these might bring for the channel.

In the past, resellers had only one way of doing business with Dell, and that was direct. But that’s all changing as the privately-held computing giant continues successfully to build and adapt its channel model. Today, over 40% of Dell’s European sales come through the indirect channel, with distribution taking an ever-increasing proportion. Dell will continue to work on educating its channel partner community about its range of products and solutions via dedicated training programmes.

Lenovo’s purchase of IBM’s x86 server business is a positive move for the channel, as it gives Lenovo partners more opportunities to upsell to enterprise customers on the back of the ThinkPad. As long as Lenovo emulates its PC strategy, the channel should reap the benefits. The key for Lenovo is to make sure that the merging of IBM channel programs and tools will not paralyse the execution of their plans for growth.

HP announced plans to separate into two new publicly traded companies in October of last year: Hewlett Packard Enterprise, selling infrastructure software and services, and HP Inc for printers and PCs. The next 12 months will be an extremely important time for the firm as it has to reassure its customers and channel partners that the split has made it a more energised company, and that it understands its customers’ pain points and its partners’ too.

Some of these changes in the vendor landscape will present challenges for the channel this year. While much of this is still unknown, some things are clear:

  1. Dell needs to continue to make it easy for the channel to do business, and increases channel profits by offering standardised bundles.
  2. Lenovo could re-energise the channel server business by doing for servers what they did for ThinkPad.
  3. HP, still with over 20% of European Channel sales, could be a disaster in the waiting if the company split turns out to have been misguided.



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Filed under IT Distribution, Market Analysis

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