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Context: Channel remains optimistic

Research from market watcher shows most across the European channel are feeling upbeat, even if that sentiment is not shared with all their customers

There are numerous reasons to be gloomy at the moment, with inflation high, energy prices causing problems and the supply chain constraints that have plagued the IT world continuing to frustrate.

But reasons for optimism remain and, according to the latest ChannelWatch from Context, resellers across Europe are feeling fairly positive about the future.

The market watcher found that 62% of those channel partners it quizzed were expecting their business to perform better over the coming 12 months. Just over a quarter (27%) were anticipating no change and only 10% were bracing for things to get worse.

Context pulls together the responses for its ChannelWatch between April and July, so thoughts about the prospects for the future were being sought against a backdrop of the Ukraine war, rising energy costs and rising inflation.

What appears to be driving a sense that things are going to be OK is continuing demand for cloud services, security and networking.

Context found that almost half of respondents said they would be investing in cloud products and services in the year ahead, which keeps a trend going that has been seen for the past four years.

There were also increases in the numbers looking to ensure they were in a good position to sell and support networking, security and managed print services.

In the B2C market, there were also signs that the majority (65%) were planning to invest in the 12 months ahead, despite softening demand and ongoing supply chain issues. Components, HDD/SDD and printers were among the hardware areas that were gaining investment.

“Despite the headwinds, we’re clearly seeing resilience in the IT reseller landscape as we head into a recessionary period,” said Context global managing director Adam Simon.

“Priorities have changed. More organisations are saying ‘we need to invest in IT because it’s mission-critical to our business,’ and that is reflected here. Much of the opportunity will be focused on the SME reseller space, which is already the best performing area of the market.”

Optimism is not quite so strong across the channel’s target market, with the latest SME Finance Monitor for Q2 2022 issued by BVA BDRC indicating that economic concerns are having an impact.

For many SMEs, life had started to look better with the pandemic receding, but the economic problems triggered by the war and the cost-of-living crisis have dampened the mood across the customer base.

“As the impact of the pandemic wanes, SMEs have found themselves facing new challenges, including increasing costs and a changing economic climate,” said Shiona Davies, director at BVA BDRC. “As a result, the improvements seen in 2021 across a range of metrics, such as mood, optimism about the future and growth plans, appear to have stalled.

“While appetite for finance is back to pre-pandemic levels, concern about repaying facilities has abated somewhat. This latest report is based on data gathered to the end of June, and much has happened since. The coming months will reveal the impact both of these new challenges, and also of the support being provided, on SME optimism and ambition.”

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