CRN Channel Business Research Report, April 2006

EXECUTIVE SUMMARY

Solution providers' overall near-term sales expectations rebounded in March after a steep decline in February, fueled in part by increased optimism for the channel’s business prospects in the software and security categories.

Meanwhile, large companies' reported spending plans for the second quarter of this year remain strong, though slightly less optimistic than compared with the first quarter.

Solution providers are likely to find the best sales opportunities in Web services, application/database development, wireless and wired networking hardware and software, desktops and PC servers.

Although solution providers are more optimistic about sales in general, the categories they expect to sell best changed significantly. Voice-over-IP rejoined the top 10 list (in second place) after a one-month hiatus, along with antispam, PC servers and storage software. These categories replaced firewalls, desktop PCs, remote access and networking hardware.

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The percentage of solution providers citing IBM as their best-selling Unix server vendor doubled, the most notable change among best-selling hardware brands. The increase came at the expense of Big Blue’s competitors, especially the custom systems arena.

The list of the top 10 products and technologies that solution providers plan to sell or recommend to small and midsize businesses over next three months showed little change. Branded servers joined the list, replacing networking software. The list remains dominated by three basic technology areas: security, networking and PC hardware.

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