UK Channel Optimistic in Global Downturn

The IT Channel has found positive growth potential despite the downturn, according to a recent survey by TopLine Communications, leading supplier of public relations to the UK Channel.

Over 130 vendors, distributors, resellers and end users at the Channel Expo 2009 last month gave their views on the effect the global downturn has had on their businesses and a whopping 69% expect to see business growth this year.

The results reinforce the view that the ‘green shoots’ are genuine:

60% of the respondents believe the global economic downturn has affected their business positively, with 49% claiming it has led them to become more efficient and targeted, 22% saying it has eliminated competitors from the market and 18% claiming it would bring supplier costs down.

Good supplier relationships were highly valuable to a business during a recession (62%), followed by a strong sales team (37%), business networking (30%) and increased marketing/PR (19%).

69% of the respondents expect their business to grow in 2009 and only 6% expect to see decline.

When asked “which consequence of the recession poses the biggest threat to the Channel”, almost half (48%) of the surveyed blamed cut in budgets by clients. This was followed by difficulty securing credit (21%), cash flow problems (17%) and end users switching to low cost equipment (13%).

38% of the respondents expect cloud computing to have the biggest impact on the Channel over the next year, followed closely by Virtual Management Software (25%), VoIP (18%), Refurbished kit (12.5%) and data deduplication (6%).

While most executives in the channel are hesitant to believe economists’ claims of ‘green shoots’ in the UK market, the survey results highlight otherwise. The Channel seems confident of coming through the worst and looks forward to a recovery phase.

Heather Baker, Director of PR at TopLine Communications commented: “These results highlight an optimistic business outlook within the UK Channel, with the vast majority of companies surveyed expecting to grow in 2009 despite the downturn. Things did look pretty bad when the recession took hold in October last year, but our survey suggests that there is certainly light at the end of the tunnel. Now seems like the ideal time for IT companies to start talking to potential clients.”