CRN Channel Research Report, November 2005
EXECUTIVE SUMMARY
Solution providers' overall near-term sales expectations rebounded last month to their highest level since April, according to CRN's latest research. The overall sales expectations index rose to 84 in October, up from 75 in September but still below the April 2004 benchmark of 100.
Hardware and networking led the way, with VARs' sales expectations surging in areas such as peripherals (which reached their highest sales expectations level since March), servers, networking software and wireless LANs. Several security-related categories, such as firewalls and intrusion detection, also saw gains in sales expectations in October, breaking a string of declines and indicating that security is not yet ready to give up its top position in the IT market.
Small businesses remain optimistic about their future technology spending plans. Nearly half of the 200 small-business IT executives surveyed in October expected to increase IT budgets in the coming year, and 49 percent expect the gain to exceed 20 percent. These companies remain strongly committed to actually carrying out their planned budget increases.
Solution providers are likely to find strong and growing sales opportunities among small businesses in Internet-related categories such Web services, wireless, security, application/database development and supply chain management. Hardware and software categories such as desktops, network hardware, peripherals and notebooks are also likely to be fertile ground for channel sales in this business segment.
Other monthly channel research highlights included the following:
• Custom systems showed renewed strength in the small- and midsize-business market for PC hardware in October, with the percentage of solution providers citing custom systems as their best-selling desktop, notebook and server all increasing sharply. These gains were all the more impressive since component availability worsened in October for the second straight month.
• In terms of the top-selling hardware brands, Hewlett-Packard took it hard on the chin in October after a strong performance in September. IBM lost ground in the SMB market for servers, though not quite to the extent of HP. Lenovo and Dell escaped relatively unscathed compared with other major branded vendors in face of the white-box onslaught.
• Antispam returned to the list of the top 10 products and technologies that solution providers plan to sell or recommend to SMBs over the next three months. And with firewalls and antivirus accounting for two of the top three categories on the list, security remains a big driver of solution provider sales.
• Across-the-board component shortages continued in October. Availability is particularity acute in the microprocessors segment, where 35 percent of custom-system builders reported moderate to severe shortages, up from 25 percent in September and the highest figure in more than a year. Other areas seeing worsening shortages include motherboards, memory and LCDs.
DOWNLOAD CRN's LATEST RESEARCH
To download the full November 2005 channel research report in PDF form, click on the following link:
• November 2005 Channel Research Report
To download reports on CRN's latest research in specific technology categories, click on the following links:
• Hardware
• Software
• Networking
• Security
• Custom Systems