SMBs Will Help Tech Resellers Weather Economic Uncertainty

Ann All

Rising energy costs, the U.S. subprime mortgage crisis and other economic factors are putting a damper on business technology spending plans, say industry analysts. Gartner, Forrester Research and IDC are all calling for slowdowns in tech spending in 2008, especially in the United States, reports the International Herald Tribune.


Tech resellers may weather the tough times better than big tech vendors, according to a VARBusiness story published on ChannelWeb. They are better positioned to sell to SMBs, which are expected to outspend their enterprise counterparts in the coming months.


The indirect sales channel has been growing fast. While indirect sales were 15 percent greater than direct sales in 1997, now they are 100 percent greater than direct sales, according to Gartner Dataquest. This growth is spurring all the major tech vendors to devote more attention to the indirect sales channel.


Yet their popularity with SMBs won't insulate resellers entirely from economic uncertainty. Based on a VARBusiness survey of its readers, even resellers expect business to slow a bit in 2008, with 73 percent of them anticipating revenue growth of more than 5 percent in the coming year, down from 81 percent last year and 79 percent the year before.


Resellers anticipate less of an impact on their net profits. Sixty-four percent expect profit to grow by more than 5 percent in 2008, down from 65 percent who predicted such an increase for 2007.


The vendor jockeying for deals with resellers is creating churn, according to VARBusiness. Survey respondents added an average of 3.1 vendors in 2007 -- and dropped an average of 1.6.


Categories experiencing major growth are VoIP, security hardware and wireless networking, with 28 percent of survey respondents expecting to add new vendor relationships in each of these areas in 2008.

Add Comment      Leave a comment on this blog post

Post a comment





(Maximum characters: 1200). You have 1200 characters left.




Subscribe to our Newsletters

Sign up now and get the best business technology insights direct to your inbox.