As of this writing, the United States is suffering the worst economic recession in half a century. The fall 2008 seizing of the credit markets was likely the midpoint in a chain of events that plunged the United States and global economies into a deep recession.
Over the past two quarters, the United States alone has shed more than 1 million jobs, gross domestic product has shrunk more than 6 percent, more than $2 trillion in consumer credit has been retracted by lenders, and many industrial and services institutions teeter on the brink of oblivion.
In the technology industry, major suppliers of hardware and software products, as well as their distributors, have reported significant quarterly revenue and profit declines; forecasts don’t show a quick rebound.
In spite of the economic downturn, solution providers are unfazed and, in some cases, optimistic. Cursory reviews of channel economic performance data generated by Channel Insider find solution providers believe their revenue and profit will increase in 2009, even while their vendor partners are cutting back and businesses are slashing IT budgets. Solution providers claim a shift in revenue, as an increasing amount of their business is derived from professional, remotely managed technology and consultative services that have no bearing on vendor product sales.
In reality, the recession is having a profound impact on solution provider performance and businesses. The Channel Insider 2009 Market Pulse survey found a clear bifurcation among solution providers that shows how solution providers choosing to evolve and expand—despite the economic challenges—are more optimistic and expect to grow, while those clinging to the conventional reseller models of the past are bracing for rough times ahead.
Based on the survey findings, Channel Insider believes the recession will irrevocably change the landscape and nature of the IT reseller channel, eliminate many solution providers through acquisitions or attrition, and result in the rise of “services as a solution” business model.
In this Channel Insider Perspectives, we will review:
• Channel revenue and profitability trends
• Trends in channel business plans and goals
• How differing business strategies lead to success and failure
• Evolution: Post-recession projections
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