Survey Finds VARs (Oddly) Optimistic

According to the report, very few VARs have observed any material slowdown, and most just noted the opposite. Large financial institutions are likely to continue their fourth quarter hesitancy to make major IT purchases into the first half of this year. However, Baird said it believes there is compelling value in vendors including Hewlett Packard, EMC and Network Appliance among others.

While some economic pundits have recently raised serious concerns about the coming months -- some even raising the specter of recession -- the solution providers surveyed seemed to offer a different view of the fourth quarter economic scene. For example, VARs reported generally positive fourth quarter performance, with nearly half reporting "Above Plan" and only five percent "Below Plan," which would be the most positive feedback for an individual quarter in years, according to Baird. However, the department of labor released figures recently stating that the number of unemployed persons increased by 474,000 to 7.7 million in December and the unemployment rate rose by 0.3 percentage point to 5.0 percent. A year earlier, the number of unemployed was 6.8 million, and the jobless rate was 4.4 percent.

Still, economic activity in the manufacturing sector didn't grow in December following 10 consecutive months of expansion, according to nation's supply executives in the latest Manufacturing ISM Report On Business. That index was 47.7 percent, down from 50.8 in November. (The index has a break-even mark of 50 percent: A number higher indicates the economy is growing, a number lower, that it is declining). However, that may well be reflective of the current slowdown in the housing market; the computer and electronic products segment did report growth.

Heading into the new year, VARs have a pretty stable outlook, according to the Baird report. Roughly half of the resellers in Baird's sample expected revenue growth to accelerate during 2008. Only 17 percent expect a deceleration and 2 percent predict a decline. They are also looking toward hot technologies such as virtualization and data deduplication to invigorate business.