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Channel leaders cautiously optimistic about 2021
Challenges lie ahead, but the importance of technology is clear and steady, according to those responsible for supplying it to customers
Views about the growth areas that the channel could take advantage in 2021 have emerged out of conversations with reseller and distributor senior executives at the Canalys Channel Forum. The analyst house quizzed a number of channel leaders, asking them where they felt the growth opportunities would come from.
Most accepted that there were challenges caused by the Covid-19 coronavirus, component shortages and the prospect of Brexit, but they also struck a positive note about the prospects for 2021.
Graeme Watt, CEO of Softcat, said that areas of the business that it expected to drive the business over the rest of this year and next included security, mobility and digital workspaces, as well as datacentre and cloud.
“Our fastest-growing areas will likely be security and digital workspace, as aided by some of the services that we have wrapped around security,” he said, adding that threats remained and everyone needed to be secure and compliant, and remote working was also driving demand.
Watt noted edge computing and 5G as some of the other areas that were of interest, and the data that would come out of the sensors being deployed would give the business a chance to get involved in smart verticals.
He also talked about the as-a-service trend, with the customer demand for that approach rising. “Customers do want to consume and do want as a service, and vendors are pushing at the right rate at the pace our customers want it,” he said, adding that Softcat was putting value around this to make sure it was not simply offering consumption.
“This is a very genuine [trend], accelerated by the pandemic. It is difficult to forecast exactly what is going to happen going forward, but we are still seeing customers invest in cloud, mobility, security and a ton of digital transformation,” he said. “There is a lot to be optimistic and positive about, and we have growth in our industry.”
Mike Norris, CEO of Computacenter, said that he felt optimistic about the technology sector because of the role it has played across the economy as a whole.
“I can’t believe that there is any way that technology is going to become a smaller percentage of GDP – it’s only going to become a bigger percentage of it,” he said.
“There will be winners and losers obviously, but it is a rising tide so I feel bullish. It’s not stellar growth, but it is good, steady, obvious underlying growth in our markets,” he added.
Ken Lamneck, CEO of Insight, said that the experience of the coronavirus had shown the resiliency across the channel, and that had to be a positive thing to build on going into 2021.
“That resiliency is going to serve us well,” he said, adding that the experience of crises of the past – such as the 2008 recession – was that they were quickly followed by growth.
“There is no question there has been a lot of spend that has moved away from datacentre projects and those types of things to instead spend on work-from-home initiatives. You can’t put off these types of expenditures. Companies want to become more digital, but you just don’t become more digital, you have to ensure that your infrastructure is modernised,” he said.
Lamneck said that once the economy got back to a more normal footing, it would translate into a robust period of investment from customers.
Distribution world plans for growth
Senior executives in distribution echoed the views of their counterparts in the reseller world.
Joe Hemani, founder and chairman of Westcoast, said that technology would play an important role as the economy recovers next year, with the company – although remaining cautious – planning for growth.
“I am cautiously optimistic, but we are planning for growth again in 2021. We are going through our budgets now, and our first-pass budget says that we’re hoping for 20% growth as a group for next year,” he said.
He said a lot of the technology that users had scrambled to buy at the start of the lockdown was not fit for purpose and a review of that technology would spark opportunities.
“We have some hope that a lot of computational devices that were bought in a hurry are not fit for purpose for remote working with security aspects, software, communications and bandwidth. If we look at all of those, there will be opportunities for us,” he added.
Patrick Zammit, president of Europe, Middle East and Africa (EMEA) at Tech Data, said that the lockdown had initially driven new business opportunities around working and learning from home, but there are other areas that it will concentrating on as it looks ahead.
“It is very clear that Covid-19 has accelerated digitisation or at least it has made it very clear that digitisation is critical if you want to build a resilient company. So I am expecting many end users to accelerate their investments as they see stabilisation and see that, financially, they are out of the woods,” he said.
“On the endpoint solution side, we have had incredible demand this year, and some of that demand is not going to continue. When you have growth rates of 40%, 50% or 100% on laptops, for example, one could imagine it will have an impact on the demand next year. Having a diversified portfolio will help,” he said.
“The key trend will be digitisation, which will drive demand in software and for infrastructure, which is a major opportunity for us,” he added.
Tim Griffin, managing director of DCC Technology, the parent company of Exertis, said that the market would become more diverse because old ways of working were changing and, as a result, so were the technologies being used by customers.
“There are pockets of opportunity out there. We have an incredibly diverse portfolio, and we have had businesses that have done exceptionally well and businesses severely damaged. But if you think about the technology world and the landscape we are facing, there is going to be more technology used as we go forward, so that is a positive thing,” he said.
“Technology will become more pervasive, not less, and if we can find what fulfils the needs of the new world, then you have a bright future,” he added.
Read more about the channel and coronavirus
- With the current challenges caused by Covid-19, supplier Dell has made changes to its MDF programmes to make life easier for the channel.
- Managed service providers, resellers and other partners are experiencing rising demand for advisory and implementation services as customers pursue remote work tools.
- People buy from people, so the saying goes, and the coronavirus pandemic has tested the channel’s ability to do just that.