Next Year Will Bring Steady Growth, And Here Are Some Safe Bets For Sales
Concerned as we all may be about the general state of affairs in high-tech spending, growth next year will be much like it was this year—not rapid, but steady.
The bright spot will continue to be midsize companies, as enterprise accounts continue to show a reluctance to spend on new projects. The biggest problem we have in the enterprise is that far too much of the budget goes toward maintenance of current legacy systems and not enough is earmarked for new deployments.
That maintenance problem will slowly subside over the next few years as more IT services are outsourced and cash is freed up to push forward rather than maintain. For this reason I believe it's important for solution providers to move more forcefully into managed remote services in 2005 and 2006. These capabilities also will increasingly become important in selling to the midsize and small-business markets, but we can explore why in the future.
What would a column full of predictions be without some consolidation talk?
I think we are ripe for a blockbuster consolidation in distribution that will remake the landscape. This could happen in a number of ways. We might see a combination of two big broadline players. But the more likely play, in my opinion, would be the combination of a broadline and a specialty distributor.
In the solution provider space, I think we will see a move to consolidate players under a single brand in the midmarket in an effort to build a very big player in this space with brand equity. We have big-name solution providers in the enterprise, and I've talked to a number of individuals who are looking at ways to do something similar in the midmarket.
Software is another market where a big consolidation play beyond the possible Oracle/PeopleSoft hookup is likely to occur.
My bet is that Hewlett-Packard will have its house in order enough by midyear for everyone to feel comfortable that the Compaq acquisition is well behind it. The next step is for the company to gobble up a large software developer to add to its portfolio. It needs to do so in order to compete head-to-head with IBM over the longer term.
And while I'm at it, the direct marketer reseller space isn't finished consolidating either.
The home networking market is going to start rocking in 2005, as users cry out for more than a simple sharing of broadband and printers. Storage will also become a major issue and opportunity. The question on consumers' minds will be: How do I make sure my data—which now includes music files, digital photos and soon video—is automatically backed up so I don't lose my investment?
The storage and security spaces will continue to be very bright areas in the general business market. And we'll see the groundwork laid for radio frequency identification solutions to inspire high growth in 2006 and 2007.
Finally, VoIP is something every solution provider must sell next year. SMBs will be rushing at a frantic pace to make the switch. The savings are just too big to ignore. So, if you aren't selling VoIP to your customers, someone else will. And the growth will be rapid.
There you have it, at least for now.
Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].