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Channel looking for a strong finish to the year

Attempts to iron out seasonal spikes in the channel have been partially successful but Q4 remains a crucial selling period and many are expecting a busy end to the year

Many attempts have been made to make the channel less of a seasonal business and iron out some of the peaks and troughs that used to exist across the year.

The slow start to the year and then the drought that used to make the summer drag on for weeks was always offset by a barn storming last three months.

That has started to change and it would have been unheard of a decade ago for Microsoft to launch a product as important as Windows 10 at the end of July, as it did two years ago. But despite that Q4 does remain a very important trading period.

"Despite vendors trying to get a more even balance of revenue across the calendar year, Q4 still seems to be the largest trading period for most vendors and partners. Revenue patterns are largely shaped by customer buying behaviours. Q1 typically sees an increase in public sector sales being aligned to the financial year. Q4 typically sees an increase in enterprise spend, with most running calendar year, in line with the majority of vendors. This is reflected in our own expectations for the close of the year,” said Brett Candon, EMEA channel director at Exabeam.

That expectation that the end of the year will be a busy one for anyone selling into the public sector is widely shared across the channel.

“We’re certainly optimistic that it will be a good trading period. For our smaller-medium enterprise projects, these tend not to work on a quarter-by-quarter basis, but a lot of our bigger medium-large enterprise projects particularly in the public sector tend to happen in Q4, so we anticipate that it will certainly be a busy period. There’s no real reason why it’s a busier period, although MATS (multi-academy trusts) get their budgets in September when the academic year commences, so this is certainly a factor,” said Michael Miller, head of channel at Smoothwall.

Plenty of channel firms work fiscally from January to December so it also gives a last chance for sales teams to hit their targets. Life for those trying to get customers to open wallets is usually made a bit easier because the period is usually accompanied by a tranche of significant product releases. The vendors are also looking for a strong finish and they will be leaning on partners to try and help them end the quarter in style.

"Q4 remains a key tenant in the channel calendar for business, driven by the larger vendors who still have annual targets which mostly coincide with calendar Q4 or at least ½ yearly targets.  With larger vendors pushing for substantial amounts of business, they will be driving projects and revenue, with additional discounts and promotions to close out deals," said Jacqui Rand, co-founder and director at Channeliser.

"The channel recognises these annual opportunities to make additional margin and so are highly tuned to these incentives.  Also, I am hugely optimistic, as I believe the UK has a desire to settle and stabilise; both in government, commerce and business.  This represents a window of opportunity as stability allows for progress rather than naval gazing or stagnation.  Progress and a forward view needs innovation underpinned by technology," she added.

There are plenty of big issues for the channel to discus with customers over the next few months with digital transformation projects continuing and the deadline for the arrival of GDPR getting ever closer.

There is also a continued shift towards managed services and those in the channel that take that approach are likely to end the year happier than those that are sticking to simply shifting tin.

“Continued pressures on CapEx will mean resellers that are delivering vertical-specific ‘experience- driven’ solutions and managed services, which drive ROI for customers, will be best positioned in Q4,” said Sean Collins Regional Director UKI & BeNeLux at Extreme Networks.

"Channel partners and vendors who continue to align to the mobility requirements of customers across the verticals will be best placed to succeed due to the focus on the end-user in the IT market place,” he added.

 He is not alone is noticing a surge in demand for services and Andrew Forsyth, sales and marketing director at Brother UK, has seen the same trend in the print world.

“The SMB market has been gaining momentum over the last year and should continue to do so in quarter four 2017. There’s growing opportunity as more firms shift towards procuring print systems as services as opposed to stand-alone pieces of hardware,” he said.

“This is resulting in customers working more closely with channel partners to improve bottom line performance. This trend will continue into 2018 and channel partners that can demonstrate genuine insight into the operational challenges of SMBs will be well placed to meet their demands to improve efficiency and productivity,” he added.

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