SURVEY: Economic uncertainty is top concern for ICT channel
The business outlook from South African ICT channel players, particularly those on the front line, is markedly more negative this year than last.
This one of the key findings of The Margin’s 2019 Channel Survey, which were revealed at the annual channel banquet hosted by ITWeb, Brainstorm and The Margin magazine, in Sandton last month (September).
Three quarters (75%) of respondents from across the local channel cited economic and political uncertainty as the biggest threat to their organisation’s outlook. The rand/dollar exchange rate was cited as the next big threat by 62% of all respondents.
In 2018, 64% of all respondents had a positive outlook, compared to 52% this year. While much of that weighting has shifted to a ‘mixed outlook’, the percentage of respondents with a negative outlook grew from 5.5% to 7%.
Managed service providers, systems integrators, resellers and independent software vendors, grouped as ‘front line’ respondents, were the most negative of all at 9%.
In fact, front line channel players seem to be the most concerned category as they listed more potential threats on average per respondent than those from distributors or vendors.
Local market conditions were also seen as a threat, with ‘increasingly competitive market’ cited by 39% and the ‘general business environment’ cited by 31% of respondents. The next group of threats was around the skills shortage at 28%, and B-BBEE rating, which was listed by 25% of respondents.
Across the board, the top area of business focus for the year ahead was to find new customers.
Empowerment was also an issue highlighted by channel players as requiring more work, as 17% of respondents admit that either their company or the wider channel wasn’t doing enough to meet B-BBEE standards and transformation. This figure was 7% last year.
Across the board, the top area of business focus for the year ahead was to find new customers. Vendors were also concerned with growing market share, as were distributors. A joint second area of focus for distributors, however, was to improve market awareness of their offerings. For the front line respondents, the second most important area was to upsell.
The channel was also asked to identify 'the hot new technologies', where’ there's the most interest and focus for the next two years. The top three – cloud, security and IOT – retained their spots from last year.
In 2018, artificial intelligence was ranked eighth, but was the fourth highest ranked technology this year. With 14 technology options to choose from, the bottom three were blockchain, business continuity and disaster recovery, and augmented, virtual and mixed reality.
About the survey
ITWeb’s The Margin magazine, in association with Axiz, Dell Technologies and Microsoft, ran its second annual survey in 2019, from 12 August until 19 September.
Participants from across the ICT channel were polled for their opinions on major economic, business and technology trends affecting the status of the local market and the supply chain.
A total of 340 valid responses were received.