Tag Archives: IT distribution

Reflections on DISTREE EMEA 2017

When the IT channel gathers in Monaco for DISTREE in February it is always good to get some winter sunshine, not just from the balmy Cote d’Azur weather, but also the opportunity to meet up with panellists, clients and new tech companies.

This year there was a strong distributor focus, and the keynote, delivered by Chris Petersen , our strategic partner, was a look at what distributors need to do to benefit from the omnichannel revolution. Chris challenged the audience provocatively with a tombstone showing that on 14th February 2017, traditional retail died. What is the significance of this date? It was on this day that Warren Buffett, the legendary investor, sold almost all of his WalMart stocks. The WalMart stock has been languishing for years now, as the company is incapable of catching up with Amazon on ecommerce. Their total of $13bn online sales is equivalent to the growth which Amazon puts on every year.

Chris elaborated on 5 areas where distributors can contribute. Here are two key ones:

  • The last mile represents 40% of costs – how can distributors help with logistics support such as drop shipment, and inventory management.
  • The long tail is the chosen strategy of ecommerce and particularly online marketplaces, which are big competition for distributors. What can distributors do to help retailers increase the breadth and depth of categories which they hold.

In addition, CONTEXT had a workshop slot, and presented a deep dive on three emerging technology areas – Smart Home, VR and PC Gaming. There is a thirst for understanding all these areas, as evidenced by the full house of those attending the talk. Of all of them, the theme which cropped up throughout the three days was PC Gaming. In the CONTEXT presentation there was a very visual presentation of the need for deep analysis in this area, with a slide showing two Asus models. One was a Republic of Gaming model, evidently a gaming machine.

adamdistree

Adam Simon, Global MD – Retail, CONTEXT

The other was a “business” laptop, but when you dig into the specifications you can see that it is also gaming capable. The channel needs to understand the total market if it is to develop the gaming category, and that is where the CONTEXT categorisation is very useful.

Finally, we were asked to take part in a panel on Brexit. All 4 UK participants had been pro-Remain and are all now pragmatic if concerned about the future. We are delighted to see additional investments recently announced by tech companies in the UK, and look for an interesting competition between the hardware strong France and the software strong UK.

by AS

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Filed under Connectivity, Home automation, omnichannel, Retail, Retail in CONTEXT, Smart Home, Smart Technology

Is Black Friday dead? A US perspective

Guest blog by Chris Petersen, CEO of IMS, Inc.

Is Black Friday dead, or just rapidly waning? Data indicates the demise of the premier kickoff to holiday shopping in the US. It’s not just about the economy and consumer confidence, although those are key factors. The retail phenomena unfolding right now is about universal changes in consumer behaviour, regardless of socio-economic status.

Black Friday has declined in US retail … will the same trend happen in Europe?
In the not too distant past, stores were the premier focal point of holiday shopping. Black Friday was an event created by bricks and mortar retailers to entice consumers to come shopping on the Friday after US Thanksgiving, which always falls on the 4th Thursday of November. Since many US customers take off from work on Black Friday, it became the quintessential retailer marketing event to lure shoppers to the stores with “best deals” of the season. The theory was that if shoppers came early to find a deal, they would come back to stores for the rest of their shopping.

Not surprising, the UK and other European retailers adopted Black Friday as a promotional event to kick off the holiday selling season and draw traffic to stores. CONTEXT’s analysis of distribution trends in 2015 was very predictive for UK retail sales spiking for Black Friday. Will the trend continue in 2016?

Black “Friday” — death by a thousand clicks
Increasingly retail stores have been jumping the gun on Black Friday by offering Black Friday sales before the actual Friday. The result in the US is that there is no longer a singular event. Black Friday has suffered scope creep, and it literally has become a “Black Week” of promotions and deals.

More importantly, consumers don’t see Black Friday as just “stores” any more. Amazon and other online retailers have creatively capitalised on “Black Friday” by offering daily online deals across an entire week, or more. This has created a new trend for “Cyber Monday” which is the first Monday after the traditional Black Friday. In the US, workplace productivity actually drops on Cyber Monday as people at work scramble to get better deals on stuff they didn’t buy or couldn’t get on Black Friday. Cyber Monday is projected to be the single largest volume day of the entire holiday shopping season.

Did the same trend happen in the UK and other countries? Compared to the US, the UK has a higher % of sales occurring online, especially for technology. Many of the UK promotional ads in 2016 now in fact show the Black 5 days of deals: Thursday, Friday, Saturday, Sunday and Cyber Monday.

The net result is that today’s consumer is an empowered consumer. They are not bound by place or time of event. This translates into a much diminished effect of single retailer store events like Black Friday.

Large retailers have privately confided that Black Friday needed to “die”. The traditional approach of cramming all deals into a single day dramatically lowers prices and margin. It would be healthier for both if retailers and consumers could evaluate offers and spread shopping over a period of time. In fact, that is how today’s omnichannel shoppers are already behaving – shopping multiple days in multiple ways.

So what happened in the UK for 2016?
Were Black Friday sales up again this year? Or, did consumers shift more of their shopping purchases to Cyber Monday? How much of their Christmas budget have they spent? The final store sales numbers won’t be tallied for a couple of weeks.

However, CONTEXT is conducting consumer pulse survey right now. We are asking consumers when they shopped, and how much they purchased on Black Friday and Cyber Monday. It will be interesting to see how much they expect yet to spend in the rest of holiday season.

 

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Filed under IoT, IT Distribution, Market Analysis, Mobile technology, PCs, Retail, Retail in CONTEXT, Smart Technology, Tablet PCs

Windows 10 adoption accelerates in early Q4 2015

The adoption rate of PCs pre-installed with Microsoft’s Windows 10 operating system has increased significantly at the beginning of the fourth quarter.

The first two and a half weeks of October 2015, Month 3 after the launch of the new OS, saw a total of 187,000 new Windows 10-based PCs go through Western European distributors, a number that translated into a 34.5% share of the Windows Home and a 14.7% share of the Windows Business segment (including the Windows 7/Windows 10 downgrade version).

Vendors driving the transition to Windows 10 Home in the channel during early October were HP, Acer, Lenovo, ASUS and Toshiba. The majority of new Windows 10 Home PCs sold were notebooks (92%), with detachable or convertible systems accounting for 13% of these. Meanwhile, HP, Fujitsu and Lenovo were driving the transition to Windows 10 Pro. New systems included desktops, notebooks and workstations, with the majority based on the Windows 7/Windows 10 Pro downgrade version of the new operating system.

Despite this significant rise at the start of Q4 2015, the adoption rate continues to be lower than that of most previous versions of Windows, particularly in the Home segment. In 2007, Vista was pre-installed on 67% of new Windows Home PC devices sold by distributors in the first few weeks of Month 3 after launch, while Windows 7 made it to a 76% consumer share in the same period following its 2009 launch and Windows 8 to 83% in 2012. Adoption of the business version of all of Windows 10’s predecessors was slower than that of the Home version but, even so, Windows 7 was preloaded on 63% of Windows business PCs in the first few weeks of Month 3 after its launch. There are a number of reasons for this: Windows 10 was the first operating system to be made available as a free upgrade to many consumer users; the availability of new products was delayed by a late release of t he build; and the transition process has been considerably hampered by high amounts of old PC stock.

by MCP

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Filed under PCs, Windows

3D Printing: Challenges for the IT Channel

Industry analysts are often asked about the “tipping points” for various technologies. The active involvement of the $135bnIT global distribution market may just be one of the major elements that creates such a tipping point for 3D printing.

But there are challenges on both sides of this equation. For major broad-line distributors, many 3D printer companies are just too small to deal with or are too unfamiliar with the IT channel to bother with at the moment. For the manufacturers of the relatively new breed of personal/desktop 3D printers (those mostly under $5K), the IT channel is a strange, gigantic, unknown entity with rigid terms and conditions, which seem unfriendly to newcomers.

Even 3D-printer vendors who have operated in the professional space with larger, more expensive printers seem to be happy with their legacy direct resellers, many of whom they have been partnered with for decades. But the hype of 3D printing over the last few years and the emergence of this desktop/personal breed of 3D Printers (which, to the channel, act and feel much as any other PC peripheral) potentially calls into question the ability of legacy distribution to push the industry to the next level. The technology keeps getting better and the lines between desktop and professional 3D printers continue to blur, but good products are only part of the marketing mix: the industry seems to be begging more and more each day for a closer relationship between 3D printer companies – new and old – and the IT channel.

The entrance into the market of long-time industry stalwart HP will help. HP knows the IT channel and the IT channel knows HP. HP Inc’s entrance into this market in 2016 will be from the PC side of the split company and will continue to legitimize the technology both on a broad level and within IT circles. This entry will be in the professional space, not the desktop printer space; however, many assume that HP desktop 3D printers will not be too far behind as both the PC industry and HP desperately search for new areas of growth.

While HP’s entrance into the market may indeed be a tipping point, strides are already being made in the nascent desktop 3D printer market, with the top brand in the space, XYZprinting, being an excellent example of this. Part of this company’s success can be attributed to its familiarity with the IT channel through other products in their portfolio, which allows it to quickly place its 3D printers in the global IT distribution market. Stratasys/MakerBot has also been seen to be embracing the channel more, as has 3D Systems (and vice versa: the channel is embracing them). Regional brands can also be found in IT distribution across the globe, collectively allowing this segment to see a 249% year-on-year growth in sell-through from Q2 2014 to Q2 2015 in the EMEA region alone.

So, as the IT channel continues to look for ways to grow beyond single-digit rates and 3D printing looks for ways to get printers into the hands of SMBs, educational institutions, engineering labs and the like, it seems inconceivable that the two cannot grow together.

by CC

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Filed under 3D Printing, Imaging, Market Analysis

Windows 10 PCs trickle through Europe’s IT Distributors

PC Devices pre-installed with Windows 10 are still only trickling through Western Europe’s IT distributors in week one after the operating system’s release.

Following the launch week where around 150 unit sales of Windows 10 Home based notebooks were recorded, a similar number have appeared in the channel in the first week after launch.

In the lead up to the release of the new OS, Microsoft’s publicity spoke of a phased adoption with an initial upgrade phase to be followed by another, going into the fourth quarter, when OEMs are expected to bring out more Windows 10 devices. The decision to delay the release of the OS to OEMs and to offer consumers a free upgrade means that the range of such systems is much smaller than that which accompanied the launch of most earlier versions of windows.

In 2007, Vista was pre-installed on 57% of new Windows Home PCs sold by distributors in the first  week after release, while Windows 7 made it to a 61% consumer share and Windows 8 to 58% in comparable weeks in 2009 and 2012. Adoption of the Business version of all of Windows 10’s predecessors was slower, although Windows 7 was preloaded on 10.2% of Windows business PCs in the week following that of its 2009 release.

Windows 10 charts week

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

by LW

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Windows 10 has launched – how quickly will we see it in European IT distribution?

Microsoft has released its long-awaited Windows 10 operating system. From today, Windows 10 is officially available as a free upgrade to people using Windows 7 and Windows 8.1 on qualified devices, or pre-installed on new devices.

It might take some time however, before we see the adoption of Windows 10 gather pace after today’s launch.

While the new OS is officially available as a free upgrade as of today, Microsoft will deliver this in waves. Members of the Insider program will receive it first, followed by consumers who reserved a slot in the upgrade queue.  While Windows 10 is also available pre-installed on new PC devices from today, a tight release schedule to OEMs and high levels of old PC stock still around in many Western European countries mean that consumers are likely to still see plenty of Windows 8-based devices in their local shops today – and many of these will be offered at very attractive prices. Finally, adoption in the commercial segment usually comes with a delay. The feedback we’re getting here is that there is strong interest from business users in Windows 10, but that noticeable refresh activities are unlikely to happen before some time in 2016.

Microsoft itself expects a phased adoption of Windows 10. During the company’s recent Q4 2015 earnings call, CEO Satya Nadella spoke of “three distinct phases”: the “upgrade phase”, starting now; the autumn time frame, when “you will see the devices from all the OEMs going into the holiday quarter” and “then the enterprise upgrades”.

CONTEXT’s most recent data, covering distributor sales up to 19 July, do not yet show any new PC devices with Windows 10 pre-installed – a fact, which will be down to the relatively late release of the new OS to OEMs.  By contrast, all four previous OS releases by Microsoft had seen a ramp up of new devices in distribution a few weeks before their respective launch date. It will be interesting to see when the first Windows 10 devices will show in our data, and how quickly they will then ramp up. CONTEXT will be closely monitoring this.

by MCP

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Filed under PCs, Windows

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.

Dell
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
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
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