Tag Archives: CONTEXT ChannelWatch

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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IT Channel in Rude Health as Distribution Grows 5% YoY in 1H 2018

The IT Channel has had a strong start to the year with a combined H1 18 YoY growth rate in distribution of 5.1% and resellers in most countries more optimistic about the coming 12 months than they were a year ago, according to CONTEXT, the IT market intelligence company.

Our much-anticipated ChannelWatch 2018 report is compiled from interviews with a representative sample of over 7,000 resellers to provide key insight into market trends and channel priorities across 14 countries: Australia/New Zealand, Baltics, Czech Republic, France, Germany, Italy, Poland, Portugal, Russia, Slovakia, Spain, Turkey, and the UK.

It found that all countries are in growth this year following a slight decline in H2 2017 where year-on-year (YoY) growth was 4.6%. Some markets have expanded at a rapid double-digit YoY growth rate in 2018 including Russia (21.7%) and Portugal (10.2%).

The majority (63%) are optimistic about business in the next 12 months, with just 10% believing they’ll be worse off and less than a third believing things will stay the same. Only Germany, Poland, Slovakia and the UK are less positive about the next 12 months than when they were polled in 2017, with the latter’s pessimism likely to be linked to Brexit uncertainty.

Portugal, Spain, Australia/New Zealand and Baltics were the most optimistic countries.

The number of resellers has also stabilised: after a decline of 3% noted last year, the YoY drop this report was a near negligible 0.3%. It’s also a mature market, with nearly half (49%) of those companies surveyed being over 15-years-old and just 14% less than five years-old.

Business services was named by the largest number of resellers (14%) as accounting for over a quarter of sales and the vertical they expect most growth in this year. It’s number one in six out of 13 countries, although retail tops the list in Eastern Europe (Baltics, Poland, and Slovakia) and Turkey while manufacturing is the pre-eminent vertical in Germany, the UK and Russia.

by AS

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IFA 2018: Consumer Electronics Gets Smarter

The Internationale Funkausstellung Berlin (IFA) show claims to be the world’s largest consumer electronics show. With over 1,800 exhibitors and 250,000 visitors from 31st of August-5th of September, it was certainly a mind-boggling place to experience. Continue reading

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Italy: a model of engagement between distributors and resellers

On 18th July a new forum for the channel in Italy called #DISTRICT was inaugurated in the trendy and recently renovated tech district of Milan – the initiator was G11 Media and Channel City, who invited CONTEXT to present our reseller and channel research and use the occasion to announce the distributor of the year awards for 2018.

Italy is the country, from our recent research, where resellers most like coming together at events. So in the Italian business culture it is clearly important for people to engage with each other, and keep up to date with the latest trends. The brains behind this new format, Marco Maria Lorusso, made it clear that the topics would be current, relevant, presented by experts, short in duration and long on exchange.

With that as the set-up, there was a clear hunger at the evening’s session to learn about what resellers are thinking through the results of the ChannelWatch survey. Italy is a model of engagement between distributors and resellers – it is the major European country where the participating distributors managed to achieve the highest number of reseller responses to the ChannelWatch survey – an impressive 1,610 responses. The distributors emphasised their interest in resellers expressing their voice. In a world as fragmented as the reseller community, it is important to have such opportunities, and in CONTEXT we are keen to develop the involvement of both distributor and reseller communities in all countries in this process of articulating what resellers are doing and thinking.

The results of the survey have been sent to the Italian distributors who participated in the survey – without their support it would not be possible to gain such powerful traction in the market, and we are grateful to them for this. The full ChannelWatch report will be published in early September and will be available for sale to all those interested in using this process to understand and engage with resellers in the technology industry.

Here is a link to the keynote given by Adam Simon, Global Managing Director of CONTEXT, at the evening on 18th July for those who want to have a sneak preview of the results!

by IA

 

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Cloud and mobile drive growth prospects for Central and Eastern Europe

Much of the value CONTEXT offers its clients comes from the insight we distil from data collected at every point in the channel supply chain. One of the main sources of this sales and pricing data is the distributor. So we took time out to get some deeper analysis with Ilona Weiss, CEO of ABC Data.

ABC Data is a leading IT hardware and consumer electronics distributor for Central and Eastern Europe, covering markets including Poland, Romania, Hungary, the Czech Republic, Slovakia, Lithuania, Latvia and Estonia. The Warsaw-headquartered company sells thousands of products from over 400 suppliers, so it has great visibility into what’s going on.

Cloud drives growth
Smartphones and cloud services offer some of the biggest opportunities for 2018 and beyond, according to Weiss. in 2014, ABC Data bought Apple distributor iSource, which is a leading distributor of Apple devices in Poland. Moreover, ABC Data is extending its vendor portfolio all the time with new additions such as the Chinese giant Xiaomi. Being the first distributor of Xiaomi in Central and Eastern Europe, ABC Data was largely responsible for boosting the sales of this brand in the region. Recently, in close cooperation with the vendor, ABC Data has opened the first official Xiaomi store (called Mi Store) in the biggest shopping mall in Warsaw. The plan for upcoming months envisages extending the range of the Chinese company’s products in the distributor’s offer.

ABC Data’s cloud platform is a more recent investment, launched in 2017, but also seeks to tap a demand among business customers to drive innovation and growth through digitalisation. With ABC Data, cloud partners have access to a wide and diversified range of offerings, such as virtual servers, storage, tools for creating proprietary applications and solutions enabling data archiving and back-up. These are sourced from both global and local suppliers. Recently, ABC Data signed a contract for the distribution of Microsoft CSP (Cloud Solution Provider) products in the entire CEE region. As Ilona Weiss explains, cloud computing is the future of modern IT. It is gaining more and more recognition among companies and institutions in Poland, as well as from resellers and integrators associated with ABC Data, who are interested in selling cloud solutions provided to them by ABC Data.

This chimes with the findings of the CONTEXT ChannelWatch Survey from the end of 2017 that reported nearly half of global resellers are preparing to sell cloud services — especially back-up (53%), storage (47%) and business apps (35%). Like many of its counterparts, ABC Data is seeing a great deal of interest from the vendor community as business models become more cloud focused. With channel partners and vendors increasingly looking to offer combined solutions, Weiss sees an opportunity to grow by developing value-added distribution services in this space.

New investment areas
As for the rest of 2018, she claims that many businesses in the region will be investing in new desktops and particularly notebooks as part of the upgrade cycle. The trend will be particularly acute in the SMB space. Meanwhile, in the consumer market, the growth of digital entertainment is expected to lead to growth in the video gaming sector, which is very promising, she says.

Despite a turbulent past couple of years in the regional IT market, things are on the up and Weiss is optimistic about the future. The main cause for this is the room to grow in the above-mentioned areas of cloud and mobile, but also value added distribution and e-commerce.

Indeed, following the acquisition of the S4E company in mid-2016, ABC Data Group has significantly improved its position in the VAD area. In the coming months the group has plans to concentrate on further consolidating its position on the services market and adding value by, among other things, consistent development of its specialist products and services portfolio and by expanding its educational offer.

On the other hand, 2018 marks the 20th anniversary of the creation and first tests of the ABC Data’s sales platform – InterLink, today available in 9 language versions to thousands of B2B clients in the CEE region. It has played a key role in popularising e-commerce solutions and online shopping in Poland and in the region. ABC Data’s CEO believes that it is precisely the innovative, intuitive and trouble-free e-commerce platforms and m-commerce solutions that are the mainstay of this business.

This is why the company is constantly focused on the development of further functionalities of the InterLink sales platform. Recently, the feature of fast online payments was added. Currently, the company continues to develop the mobile version of the platform, m-InterLink, available to ABC Data’s partners in individual CEE countries. The m-InterLink application was launched last year and has gained a wide acclaim among the Polish customers.

The Company is also constantly increasing the scale of ABC Data’s operations in the CEE region. The result of these activities is the systematic improvement of sales. Only in the first quarter of 2018, ABC Data achieved a 41% increase in sales revenues in Slovakia, a 26% increase in Romania and a 16% increase in the Baltic countries. – This is why I’m not afraid for ABC Data’s future – says Weiss – We are the only company in the industry that operates directly in eight CEE countries, and we are still developing our business – she summarises.

by AS

 

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GTDC EMEA Summit – Positive at the midpoint of the year

At the recent GTDC EMEA Summit, the CONTEXT data and team were in evidence as the preliminary results of its annual 2017 ChannelWatch survey were unveiled in a dedicated workshop, and the GTDC Rising Star awards were selected using the CONTEXT data.

There was a real buzz this year with over 175 attendees, a record number of vendors, and senior executives from across the industry. The location was excellent with top class hospitality in the Kempinski Hotel in Vienna.

The conference opened with an upbeat introductory speech from Tim Curran, the CEO of the GTDC. Europe is on the move, growing faster than the US, and with excellent results in Q1 2017. Curran also took the occasion to remind members of the services provided by the GTDC.

We were then treated to a fascinating glimpse into the future by “futurist and humanist” Gerd Leonhard. Bringing together a myriad of ideas about the current technology explosion, he closed off his speech with a slide which really sums up the challenge ahead. Humans can only advance at a linear pace, whereas technology capabilities are advancing exponentially. We need to deal with this so that we don’t become “useless humans” and we must channel the new technology to the benefit of all mankind.

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From GTDC Keynote Presentation by Gerd Leonhard, 13/6/2017 ©

The final session of the morning, before breaking off into workshops and 1-to-1 meetings, was a Distribution panel, hosted by Peter Ward. On the panel were Graeme Watt, formerly CEO of Avnet Europe, now SVP Value at Tech Data; Jeremy Butt, Executive VP of Westcon EMEA; Ilona Weiss, CEO of ABC Data; Eric Nowak, President of Arrow ECS EMEA; Svens Dinsdorfs, CEO of Elko; and Anton Herbst, Head of Strategy at Tarsus.

The discussions were broad-ranging around the future of Distribution, the impact of recent consolidations, and there was a plea from Graeme Watt for vendors to think solutions not products, in order to get the right results for customers. An interesting debate took place about the importance of recruiting and retaining the best talent in the tech industry, a challenging area. One of the panellists said that often when people have been trained up in a specialist area, they are subsequently targeted for recruitment by resellers or vendors. This is definitely the stuff of future discussions for this audience to grapple with and find solutions.

In the CONTEXT workshop the preliminary results of the ChannelWatch survey for 6 out of 17 countries – UK, France, Germany, Spain, Italy and Poland – were presented. A number of questions were asked by attendees at the GTDC conference who were curious to know more. As Andy Dow, Group Marketing Director of Tech Data UK said, “The more deeply you dive, the more you understand that you need to dive even deeper.”

In this year’s ChannelWatch survey we had an overwhelming response of nearly 7,000 resellers, supported by our distributor partners who shared the survey with their reseller clients. The respondents were mainly owners, CEO’s and senior management, covered a broad spectrum of resellers, VAR’s, etailers and retailers, as well as small, medium and large sized companies.

Overall resellers in these countries are confident about 2016 and optimistic about 2017. This has been confirmed by a stellar opening to 2017 with 5% growth in Q1 panel revenues in these countries compared to last year, ranging from 13% growth in Spain to 1% in the UK. The outlying country for optimism is Spain (71% think that 2017 will be better than 2016) and the country with the highest number of doubters is the UK where 20% see 2017 as being worse than 2016.

The preliminary ChannelWatch data supports the encouraging opening talk by Tim Curran, and we look forward to a positive second half of the year.

The full results of the ChannelWatch survey will be made available in the coming weeks.

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by AS

 

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