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Reasons to be Cheerful

The industry should take heart today for two reasons; firstly, the financial results from PC Connections and secondly, because the unemployment rate was not as bad as everybody feared for the past month. PC Connections’ results were not particularly stunning in themselves; the VAR reported net sales for its first quarter up by $25.5 million, […]

Written By: Sara Driscoll

May 2, 2008

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The industry should take heart today for two reasons; firstly, the financial results from PC Connections and secondly, because the unemployment rate was not as bad as everybody feared for the past month.

PC Connections’ results were not particularly stunning in themselves; the VAR reported net sales for its first quarter up by $25.5 million, or 6.4 percent to $423.7 million. Net income for the quarter increased by $1.4 million to $4.8 million..

The point worth noting from the results was that the VAR’s sales into the enterprise increased by double that of its sales into the SMB (small and midsize business) sector. The firm reported that sales into the SMB segment rose by 2.7 percent, compared to the first quarter of 2007. Sales from MoreDirect, the firm’s Large Account segment, increased by 6.2 percent.

For the past several years, the majority of vendors have been singing the SMB mantra over and over again, trying to edge their way into what they see as the most lucrative market opportunity right now. As PC Connections has proved, however, we should not lose sight of the enterprise and the profits that can be achieved from selling into large corporations. As PC Connections also proves, this means that despite the chilly economic climate, large customers are still buying. They may require a greater return on investment than ever before–indeed, they may not have the budget for luxury tech items, but they will spend on technology that helps their business.

The glimmer of hope in the corporate market is coupled with the report released today from the government stating that although employers did cut jobs in April, for the fourth straight month in a row, they didn’t cut anywhere near as many as they did in March. Almost 81,000 jobs were cut in March, according to the Labor Department report, but only 20,000 were eliminated in April. This was well below the doomsayers who forecasted that it would be a lot higher. Finally, reports are now appearing that claim the recession may be a mild one and not the devastating economic downfall that so many have predicted.

Reasons to be Cheerful

Sara Driscoll

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