The IT channel is undergoing a period of volatility.
Geopolitical uncertainty, supply chain challenges, component shortages
and macroeconomic gloom are just the tip of the iceberg. Now more than
ever, channel leaders need trustworthy data and market intelligence on
which to base critical business decisions. CONTEXT has been offering
such information for over four decades.
To keep clients up to speed, we run webinars
every Wednesday. These give insights into weekly, monthly and
quarterly trends by country, category and vendor.
Here are the highlights from the January sessions.
Q4 2023
Our 10 January webinar included an early look at
Q4 2023 European sales revenue figures. In the end, revenue growth
for the quarter stood at –4.3% year–on–year (YoY) with telecoms
sales included and –5.4% excluding the sector. This is much better
than our forecasts of –8% and –8.4% respectively. During that time,
volume sales (which fell by –4% YoY) overtook value sales (down –5%).
Revenue growth for the full year was –5% YoY
including telecoms and –5.5% excluding telecoms: our forecasts of 2%
and 1.8% were more optimistic.
Although H1 2024 is already looking rather soft,
it is heartening to note that the figures for Q4 2023 were an
improvement on previous quarters and that the comparatives will be
more favourable as we move through 2024.
Start of year poll
We polled those attending our 24 January webinar
to get their thoughts on the coming year. Interestingly, 38%
predicted flat growth for Q1 2024 and 27% said they expected
revenues to fall by between –1% and –3% YoY. Most (58%) predicted
growth of 1–5% for the full year. Software is the sector 63% of
attendees anticipate will grow most quickly, Poland was identified
by 40% of those present as the country where sales are likely to
increase most, and opinions were divided about which channel will
see the greatest growth with 40% choosing corporate reseller and
another 40% SMR.
SMRs set for success in cybersecurity
Analyst Joe Turner shared his cybersecurity
insights for the year ahead. Based on sales during the final weeks of
2023, he expects smaller resellers who offer solutions for SMBs to
have a successful Q1 2024. In the cybersecurity sector, the year–end
is important because many customers renew or upgrade at this time. Joe
also highlighted misinformation/disinformation, training and
awareness, and AI–powered threat intelligence and data analysis as key
themes likely to influence this market in 2024.
LFDs end 2023 strongly
We also heard that Q4 2023 brought a nice
surprise for the large format display (LFD) market –growth in unit
sales (9.4% YoY) and revenues (–3.7%) both comfortably beat our
forecasts. The foundations of this growth were interactive LFDs
(32%), direct–view LED displays (19%) and signage (–1%). The fall in
revenues was the result of declining ASPs: for example, ASPs for
interactive LFDs were –18% lower than in the same quarter of 2022.
We’re predicting a more muted start to 2024 for
this sector because many IT buyers postpone purchases until they’ve
seen what’s on offer at January’s ISE conference in Barcelona and
because supply issues related to the situation in the Red Sea will
impact stock levels and sales.
UK reseller numbers fall
Finally, there was interesting data to report
from CONTEXT’s reseller panel. The number of active resellers across
France, Italy, Spain and the UK fell –5.4% YoY in December 2023 with
the biggest fall (–7.8%) in the UK. This means the UK now has fewer
resellers than Spain for the first time. It is interesting to note
that the remaining resellers did not seem to benefit from this as
revenue per reseller in the country remained flat.
To stay up to date with the latest IT channel
market insights, register to join our next Weekly IT Industry Forum
webinar here.
