Category Archives: IT Distribution

Securing digital transformation a key opportunity for channel growth in 2019

Digital transformation offers huge growth opportunities for the channel in 2019. But recent events have also highlighted the importance of secure digital solutions, with over 59,000 breach reports already submitted to GDPR regulators since May 2018. This bears out some of the key predictions for the industry made in a new report from CONTEXT. With the right market intelligence to hand, channel bosses should be well positioned to navigate the challenges that come their way this year.

Securing digital growth
In our Technology and Channel Predictions 2019 report we point to the secure management of data as a key driver of channel growth in the digital transformation push. New stats from DLA Piper released last week confirm exactly this: that organisations are now much more aware of data security. The law firm claimed there has been an average of over 7300 breach reports each month since the legislation was introduced.

Another new report, from Thales eSecurity, reveals not only that organisations are motoring ahead with their digital transformation plans, but that they are struggling to contain the increased cyber risk that these projects are exposing them to. Complexity — for example in managing multiple cloud environments — was highlighted as the top barrier to data security. This is where channel partners can offer a real value-add, in helping their customers embrace innovation-fuelled growth but in a secure and compliant manner.

Some industry watchers, like Accenture, even believe that we’re now entering a “post-digital” world, where success will increasingly be defined by how innovatively organisations can apply technologies like AI, distributed ledgers and even quantum computing. The consultancy’s new report also highlights the importance of cyber security to the success of projects.

Brexit and beyond
As we mention in our predictions report, Brexit is the great imponderable for 2019. As I write this, the British government still seems a long way off providing the kind of orderly departure from the EU which businesses crave. As we warn in the report, a no-deal exit would cause a serious impact on trade between the UK and EU, forcing the former onto WTO tariffs and no doubt resulting in a major drop in the value of the pound. That’s why distributors on both sides of the channel who rely on cross-border supplies should have a contingency plan in place including enough stock to cover any initial period of disruption.

One distributor heeding this advice appears to be Westcoast, which recently told CRN that it had bought 3,000 extra pallet locations in two storage warehouses to stockpile a “large amount” of product. However, MD Alex Tatham appeared less than convinced about the preparedness levels in other parts of the channel. “It is amazing how many vendors have not got their own Brexit strategy organised — they haven’t woken up yet,” he’s reported as saying.

It goes without saying that Brexit isn’t the only challenge facing channel players in 2019. But although year-on-year growth in distribution won’t match last year’s 6.7%, we’ll still see positive growth for the year ahead. By tapping secure digital transformation and Industry 4.0 trends effectively, firms stand a great chance of weathering the Brexit storm and other factors like slowing demand in EU economies.

by Adam Simon

 

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CONTEXT predicts another year of growth for IT Distribution

After a strong 12 months, the team at CONTEXT is predicting continued channel growth for 2019, with digital transformation and the Fourth Industrial Revolution driving new opportunities, although macroeconomic headwinds including Brexit will inevitably have an impact.

These are the key findings from a new report we issued this week. Technology and Channel Predictions 2019 brings together insight from channel business leaders and CONTEXT experts to reveal the biggest issues and trends facing EMEA technology companies over the coming year, and country views from some of the major economies in the region.

The past 12 months saw year-on-year growth of 6.7% in distribution, accelerating quarter-on-quarter to reach 9.1% in Q4 2018. However, growth will start to slow in Q2 2019 and will achieve 3-6% YOY growth thanks to OECD forecasts of reduced demand in EU economies and the impact of Brexit.

We are urging channel players to ensure they have contingency plans and adequate stock in place in the event of a no-deal Brexit, and that they budget to cover any temporary downturns in revenues caused by social upheaval like the French gilets jaunes protests.

Although many distributors have been able to focus on organic growth during 2018, market consolidation is happening and could increase in 2019, driven in part by price pressure from etailers.

However, digital transformation offers a great opportunity for the channel to drive growth and differentiation this year. Those that succeed will meet growing demand for secure solutions, hybrid cloud, and hyper-converged infrastructure whilst evolving their own value propositions to align with new consumption models.

The Fourth Industrial Revolution will also bring continued growth opportunities in areas such as AI, IoT, 3D printing and autonomous vehicles (e-mobility).

by AS

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3D Printing – a year in review and a look at what’s ahead

2018 was all about the Industrial side of Additive Manufacturing. On the metals side, the industry saw shipments of new, lower priced multi-ASTM process printer technologies like Material Extrusion solutions from Markforged and Desktop Metal. Interest also gathered around forthcoming alternative multi-process metal technologies like the various Binder Jetting solutions from HP (Metal Jet) and Desktop Metal and for Stratasys’ LPM. “Green part” was indeed the phrase-du-jour at many a trade event this year as metal printer vendors explained the steps by which they envision lower priced metal parts being cost effectively mass produced in the not too distant future. Continue reading

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Engaging young leaders in building the tech industry of the future is not an option

Two weeks ago, I was at a panel meeting of the Smart Home & Buildings Association. SH&BA, which was founded in 2000, is the knowledge base for smart homes and buildings and people who live and work in them. At this meeting, young leaders from Google, Sky, Signify, Bosch Smart Home, Energenie, & the Beacon Agency presented their solutions to a competition on “how to overcome the barriers to smart home adoption.”

Tech Data, one of CONTEXT’s close partners and panellists, had agreed to sponsor the competition. Andy Dow, Group Marketing Director of Tech Data UK and a well-known figure in the channel had expressed delight to recognise the vital role that these young leaders have in shaping the smart home industry of today and the future.

After the winner was announced – 24-year-old Thomas Joy, co-founder of the Beacon Agency – we saw the video. You must watch it! SH&BA Young Leaders Winner – the Beacon Agency . Here is what one seasoned expert on smart home said when he saw it:

“As a CABA member, I learned about Beacon Agency’s video and am writing to share my praise. Their video offers some of the most sensible advice in the Smart Home space in decades…by mentioning AI and the need for tech to disappear discreetly into devices, it touches on a missing component of the “smart” home: the ability to learn and adapt automatically… I very much like Beacon Agency’s view of this market, looking at the service model instead a collection of partially connected but rather dumb products that quickly go obsolete as tech innovation evolves exponentially.”

To those of us interested in the future of smart home, Thomas delighted us with his considerable creativity and marketing flair for his vision of Smart Home as a Service.

So, this is the point – thirty-five years ago, a bunch of young twenty-year olds entered the new and emerging PC industry, and, sticking with it over the years, ended up by running it. We need to give the voice today to those young leaders who are going to run the smart home industry in future decades. This is vital because they get the underlying motivation of consumers and how to frame the proposition to them. This is perfectly illustrated in the Beacon Agency video – Thomas had very little prior experience of smart home, and yet he powerfully captured its potential.

As another seasoned smart home individual said, who has been working on smart home for the last twenty years, “we got in a top consultancy firm to assess smart home – they spent months on it and the most powerful concept they came up with was Smart Home as a Service”. Thomas got there quicker, and it is here for you to see. How do we build it? Surely with the help of our empowered young leaders.

TechData

Winner Thomas Joy is pictured with Teresa Johnston from Tech Data and Adam Simon, CONTEXT

by AS

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The trends behind the headlines: register for the CONTEXT autumn webinars

IT channel businesses thrive on data. Whether you’re a reseller, a vendor or a distributor, only market data of the highest quality and accuracy will do when making those crucial business decisions. That’s why CONTEXT has become an essential partner for the channel over the past three decades. Our latest ChannelWatch Report offers unrivalled insight into key market trends and channel priorities — compiled from interviews with over 7,000 resellers across 14 countries worldwide.

Sometimes stories in the trade media are written more to generate clicks than provide considered market insight. So if you want the truth behind the headlines, register for our upcoming autumn webinar series. We’ll be offering a comprehensive review of the year from a reseller perspective, insight into emerging categories, and a discussion of how data analytics can provide much-needed visibility into the impact of the US-China trade dispute. Continue reading

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Adaptable distributors in prime position to drive growth

When it comes to analysing market trends for the IT distribution channel, invariably the devil is in the detail. Despite some worrying developments that immediately spring out from the latest CONTEXT ChannelWatch survey, a closer look reveals many reasons to be optimistic. All markets face challenges, and IT distribution’s bugbear today is the challenge from e-tailers. But this is a manifestation of an ever-evolving market. Remember the threat from direct? So those distributors who focus on new ways to differentiate and meet the changing expectations of reseller community, will be well placed to drive success going forward.

Under pressure
The CONTEXT ChannelWatch Report 2018 is developed from interviews with over 7,000 resellers to generate key insight now across 14 countries: Australia/New Zealand, Baltics, Czech Republic, France, Germany, Italy, Poland, Portugal, Russia, Slovakia, Spain, Turkey, and the UK. As such, it’s the best single piece of industry research out there for discerning key market trends and channel priorities.

This year’s report highlighted the fact that 30% of resellers polled said they bought up to 10% of their stock from these etailers, thanks to their ability to compete on price, product availability and general ease of doing business.

Yet the IT distribution market is healthy, and growing while meeting the challenge. Combined H1 18 year-on-year (YoY) revenues grew 5.1% —with all countries studied enjoying positive YoY growth.

Time for growth
IT distributors’ success is based on tactics such as focusing on solution-driven areas where they can add value by bringing their expertise to bear on complex offerings like cloud. According to predictions that this market will be worth $160bn by 2020, we estimate that if distributors can capture as much of this space as they do IT as a whole (21%), there’s a $34bn opportunity waiting. Already a new generation of “born in the cloud” distributors are bringing innovative new offerings to market.

The opportunities to differentiate don’t end here. There’s a huge range of value-added services which distributors can and are beginning to offer: from project management and logistics to licensing, technical support and much more. Yes, this will require significant investments of time and resource, especially in infrastructure and skills. But it’s increasingly what resellers are demanding of their distribution partners.

One message came across loud and clear from our interviews with global resellers, especially the smaller ones: they’d like a lot more support and training. This varied from country to country, but sales techniques, IoT and cloud (SaaS, IaaS, DaaS) and smart home skills were among those in demand. We also noted that resellers are placing an increasing emphasis on customer service. When asked what resellers liked most about their distributor, the provision of B2B customer portals jumped six places compared to last year’s survey to take the top spot.

The good news is that distributors are already investing in many new value-added services to help them differentiate. If they can find that sweet spot where the resellers recognises and is prepared to pay for the value-add of such services, rather than simply choose the lowest cost offering, there are great opportunities for growth ahead.

By JD

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The PC is dead; long live the PC

Quietly, almost without many realising it, the PC that most pundits had written off as an engine for growth in the IT markets has been making a comeback. And it’s not the sort of comeback with massive volumes, queues out of the door at Aldi or PC World as consumers snap up bargains at even decreasing prices. No, this is a story about businesses, large and small, buying increasingly better spec’d PCs to handle the increasingly complex digital revolution. Average unit prices are on the increase, and chipmakers are struggling to keep up with demand.

CONTEXT figures for the first two months of Q3 2018 tracking distributor sales of PCs to resellers throughout Western Europe illustrate the trend that industry forecasters say will push the market out of decline and into growth for 2019.  PC unit sales were up +3% year-on-year while revenues grew by +5%. Average selling prices (ASPs) were also up by +2% in early Q3 2018 to €573. But same as in Q2 2018, growth came from the commercial segment. While (despite the back-to-school impetus) consumer PC sales were still in decline, businesses bought  +7% more PCs than in the same period a year ago. This demand from business buyers was boosted by companies making the transition to Windows 10, the increasing shift to mobile devices, the general need for product refreshes, and there is no sign this demand is slacking off.

The PC resurgence seems to have caught chip manufacturers by surprise. J.P. Morgan reports that Intel isn’t making enough processor chips to meet demand and the Intel processor and chipset shortage will hurt fourth-quarter 2018 PC shipments by 5% to 7%. AMD, of course, is set to benefit and has had an amazing share price run of almost 200% this year, becoming the top-performing share in the S&P 500 index for 2018.

So expect to see more devices such as HP’s sleek, leather-clad and impressively slim new Spectre Folio. While from a price and specification point of view it is well placed, it’s not cheap. Alongside PCs such as Microsoft’s Surface, it’s just the sort of device today’s businesses are looking for as they gear up to tackle the digital age.

by JD

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