Spotting the next opportunities in the technology market
By Rory Twort, Managing Executive of Sales at Axiz
The local technology channel was fortunate to experience a glut of new business in the past few years as everyone adapted to lockdowns and working remotely. During that period, the channel enjoyed high demand for laptops, peripherals and networking equipment. But the wave had to lose momentum at some point, and there is less action today in some parts of the market.
If you're hoping for the boom to continue, you'll be disappointed. Laptop sales have already slowed after global shipments of PCs hit a record high in 2021. This year, those double-digit growth figures are turning into slight contractions, according to the International Data Corporation.
But it adds a crucial footnote to these figures: the decline isn't a downward spiral. It reflects saturation in the market, and anyone selling devices should look at how they can adjust to these changes.
I want to unpack that a little more. Where are the opportunities? What should we in the channel – especially resellers – look out for? And what are the next big trends?
First, the device market is not in a bad shape, nor will it run out of road. While notebook and laptop sales are slowing down, there has been a rise in desktop sales as more people return to the office. But their choices emphasise strategic restocking. Companies are less likely to buy bulk and cover many users. They want to match specific use cases and requirements, so today's reseller should wear a consultant's cap and match devices with those needs.
Some sectors will always need new devices – notably education, where there is a continual stream of new users. Other sectors, such as healthcare, are at the start of significant digitisation journeys that will require a lot of channel support. They will continue to invest in new devices and services.
Services are the hot topic of our time. Providing software services is more flexible and attainable than delivering hardware, especially while dealing with long-lasting silicon shortages and procurement delays. But many solution providers now include services, and more of them feel the squeeze from competition. Services are essential, but if you haven't added services as part of your offerings, you need to hustle because it's already a crowded space.
If devices are slowing down and services are becoming very competitive, channel companies need to focus their efforts. There are three areas worth looking at for growth: security, networking and the cloud.
Security and networking are in very high demand, especially as software services and software-defined products. As companies figure out how to mix office and remote working, they invest in additional security and networking solutions. They want flexibility, scale and options, so these purchases are less about buying a product and more about services that will establish future-proofing and agility. Keep that in mind when looking at what you offer the market.
The cloud is a slightly trickier conversation. We're clearly in a hybrid cloud market. As much as cloud-native sounds great on paper, it's often complicated, expensive in terms of migration and not necessarily suited to how most organisations operate their technologies. This point is particularly relevant to enterprises. Smaller organisations can often move wholesale to cloud hosting and services. But the larger they are, the more likely they prefer hybrid cloud. Does what you provide fit into a hybrid conversation?
The other cloud consideration is that many companies have only now started their real digitisation transformations. During the pandemic, they adopted digital services of all kinds to ensure they could keep doing business. But they are only beginning to plan for a digital future, which is an enormous opportunity.
These companies are not the obvious candidates: they are not IT shops or sectors such as financial services, where you can find visible digital transformation trends. They are in the long tail of digitisation: healthcare, education, public sector, mid-size retailers, SMEs, legal offices, manufacturers... it's a big and growing list.
What has changed? Companies that lag in digitisation or never took it seriously have seen the writing on the wall. But that doesn't mean they know where to start or who to talk to. That is the opportunity for today's channel: Can you find those businesses? Can you help them make decisions around cloud adoption? Can you provide services to improve their security or networking? Chances are, you already sell devices to them – what is the next step in that relationship? I think you'll find those customers are ready to talk.