Channel feeling good about Q4

Despite a range of obstacles in 2022, such as supply chain issues, soaring inflation, huge spikes in energy prices, the after-effects of the pandemic and the continuing consequences of Brexit, UK channel businesses appear generally optimistic about the fourth quarter.

While admitting it “would be naive to confidently predict how the next three months will play out”, Westcon UK&I managing director John Nolan said he remains “confident we will continue to see growth in a very robust IT market”.

Acknowledging that the UK is currently “in a state of economic and political flux”, Nolan says the distributor is “positive for the future and will continue to invest in areas of growth within the business”.

He added: “One general rule for businesses is to focus on building resilience and a strong team culture. We will continue to explore ways in which we can maintain growth by responding to market needs.”

Nolan said the supply chain crisis should act as a catalyst for partners to bolster their software offerings. Westcon's UK business is up to 75% from recurring/software-based revenues, and this will not slow down, he said, adding: “Not being too dependent on hardware in this climate is important, although there will always be a need for both.”

Cyber security is viewed by many as a strong growth area for partners into Q4 and beyond. Nolan said he considers it “a safe bet” for committing time and resources. “With a potential recession looming, threat actors from nation states to amateurs will continue to take advantage of businesses that have deprioritised the protection of IT estates,” he said.

Greg Jones, Vice President of Business Development, EMEA, Datto, a Kaseya company described cyber resiliency and security as “huge areas of growth in 2022 and beyond”. He added: “This is an area of technology that will not see any slowdown for many years to come as the threat landscape is evolving so rapidly. For this reason, we believe we will see a tailwind of spending around cyber resiliency and security in 2023.”

Jones appears to have very few qualms about the future, declaring: “We believe we are entering a technology golden age, and we don’t anticipate many things will have a noticeable impact on the market with regard to a drag effect.”

Johnny Ellis, EMEA channel VP at Arctic Wolf, agreed, saying: “It is highly likely that the reseller market is going to get tougher. This is mainly down to the fact that users are going to be sweating existing assets more as they struggle with available capital.”

But while conditions in the cyber security market will be harder, “it’s unlikely there will be a full recession”, said Ellis. “Threat actors don’t stop during times of hardship, and so businesses always need to invest in cyber security. This will become ever more vital this year, as cyber insurance policies mandate certain levels of security before granting policies, meaning executives really have no choice but to invest.”

Richard Wells, head of office print sales at Epson UK&I, said rising energy prices are very high up on partners’ list of priorities. “Energy consumption is playing a focal point of their [resellers’] concerns as we enter Q4,” he said.

Wells added: “This isn’t the first crisis that has put businesses at risk this century and it certainly won’t be the last. The energy crisis and its subsequent economic impact is just the latest in a long line of challenges that channel partners have faced over the last couple of years. Nobody could have predicted the pandemic, and even fewer the knock-on effects from war in Ukraine. This has left many businesses in a sudden scramble to react.

“Partners need to be adaptable so that they can acclimatise to the ever-changing economic tides and customer demands. Failure to adapt presents the single biggest risk to the channel now.”