The IT channel has weathered yet another tough year, dealing with the aftermath of Covid and re-inventing itself for the new technology landscape that will define business in the years to come.
Customers are preparing for a probably recession in 2023, while continuing their digital transformation journeys and protecting against a new onslaught of cyberthreats.
Against this backdrop, Context’s ChannelWatch survey looked at what South Africa’s resellers are expecting in 2023.
With digital transformation still their top imperative, cloud in its various formats – public cloud, private cloud, hybrid cloud, multi-cloud and more – is top of mind for customers going into 2023.
So it’s no surprise that, when it comes to looking after their business to business (B2B) customers, resellers are looking to the provision of cloud products and services, with 68,9% of them telling Context this is an area they expect to invest in over the next 12 months.
This is followed by networking at 53,6% and cybersecurity at 46,4%. Datacentre solutions (31,7%) and workplace optimisation (29%) round out the top five investment targets.
Resellers will also spend on Internet of Things (IoT) (23,5%), device as a service (23%), managed print services (15,3%), artificial intelligence (12%), refurbishing and remarketing (9,3%), robotic process automation (6,6%), 3D printing (2,7%) and digital signage (2,7%).
For business to consumer investments, personal computers (PCs) are still the top priority at 79,8%.
More than half of resellers are also planning to invest in software (62,9%), accessories (56,2%), printers (53,9%), hard drives and solid state drives (HDDs/SSDs) (52,8%), components (49,4%) and print consumables (46,1%).
Trailing these investment areas are headsets (34,8%), smart home (33,7%), smartphones (27%), gaming (24,7%), wearables (18%) and 3D printing (11,2%).
Despite the tough year behind us, and concerns about the year ahead, most resellers are still optimistic: 89,5% of them think their business will perform better in the next 12 months, with 10% of them believing it will remain the same and a negligible 0,5% thinking it will get worse.
Business hardware outlook
Resellers are optimistic about growth in business hardware over the coming year.
Mobile computing: Better than 10% growth – 36,4%; 5% to 10% growth – 39%; 0 to 5% growth – 22,7%; 0 to -5% decline – 0,6%; greater than -5% decline – 1,3%
Storage: Better than 10% growth – 24,7%; 5% to 10% growth – 36,4%; 0 to 5% growth – 27,9%; 0 to -5% decline – 7,1%; greater than -5% decline – 3,9%
Desktop computing: Better than 10% growth – 24%; 5% to 10% growth – 33,1%; 0 to 5% growth – 35,1%; 0 to -5% decline – 7,1%; greater than -5% decline – 0,6%
Monitors: Better than 10% growth – 21,3%; 5% to 10% growth – 40%; 0 to 5% growth – 30,3%; 0 to -5% decline – 6,5%; greater than -5% decline – 1,9%
Enterprise networking: Better than 10% growth – 20,9%; 5% to 10% growth – 36,5%; 0 to 5% growth – 78,4%; 0 to -5% decline – 9,5%; greater than -5% decline – 4,7%
Servers: Better than 10% growth – 17,8%; 5% to 10% growth – 30,3%; 0 to 5% growth – 34,2%; 0 to -5% decline – 11,8%; greater than -5% decline – 5,9%
Printers: Better than 10% growth – 18,2%; 5% to 10% growth – 29,4%; 0 to 5% growth – 34,2%; 0 to -5% decline – 12,6%; greater than -5% decline – 5,6%
Large format display (LFD): Better than 10% growth – 15,6%; 5% to 10% growth – 13,3%; 0 to 5% growth – 46,9%; 0 to -5% decline – 16,4%; greater than -5% decline – 7,8%
Consumer hardware
Resellers anticipate a similar picture for consumer hardware.
For mobile computers, 34% expect better than 10% growth, 46,6% anticipate growth of 5% to 10% and 17,5% are looking to flat-to-5% growth. Fewer than 2% expect a decline.
For desktop computing, 20,8% believe growth with be above 10%, 39,6% think it will be between 5% and 10%, and 32,1% expect 0 to 5% growth. Just 7,6% think growth will be in negative territory.
Slightly more resellers expect negative growth for monitors (10,6%), with 16,3% looking to better than 10% growth, 44,2% aiming for 5% to 10%, and 36,7 anticipating flat to 5% growth.
It’s a similar picture for smartphones, with 16,1% of resellers expecting more than 10% growth, 23,7% looking to 5% to 10% increases and 38,7% believing growth will be flat to 5%. A fifth of resellers (21,5%) think smartphone growth will be negative.
Printer growth expectations are a little more positive: 14,3% of resellers think growth will be better than 10%, 30,6% expect 5% to 10% growth and 36,7% look to up to 5% increase. Negative growth is anticipate by 18,3% of resellers).
Consumables
Resellers’ outlook for consumables is largely positive, with about one-third of them anticipating better than 10% growth for both ink cartrisges and toner.
An further one-third of resellers think growth in these lines will be between 5% and 10%; and about one-quarter are expecting flat to 5% growth rates.
Software
Resellers are optimistic about software sales growth, according to the Context research.
Security software is anticipated to see the best growth rates, with 20,1% of resellers expecting more than 20% growth, 44,6% believing it will be between 10% and 20% and 30,2% suggesting a flat to 10% increase. Just 5% of resellers think security software sales will decline.
For office applications, 18,4% are looking to growth of more than 20%, 43,4% think sales will increase 10% to 20%, 30,9% expect up to 10% growth, and 7,4% think sales will be in negative territory.
A significant 16,6% of resellers expect negative growth for virtualisation software. But 43,2% expect up to 10% growth, 23,5% think it will increase 10% to 20% and 16,7% anticipate better than 20% growth rates.
Operating system sales will grow more than 20%, according to 15,3% of resellers, by 10% to 20% say 33,6% of them, and by above 10% in the opinion of 39,4% of resellers. But 11,6% are expecting growth to go backwards.
A majority of resellers (87,8%) expect positive growth for data management software (14,4% over 20%, 33,8% between 10% and 20%, 30,6% over 10%), with 12,2% forecasting negative numbers.
Services
Services growth is expected to be largely positive, according to Context’s ChannelWatch research.
A healthy 93,7% of resellers expect software as a service (SaaS) to grow (27,5% at over 20%, 37,3% at between 10% and 20%, and 28% at up to 10%).
Infrastructure/platform as a service (Iaas/PaaS) growth will be better than 20%, according to 24,1% of resellers, and between 10% and 20%, say 34% of them, while 30,5% say it will be up to 10%.
Other services will see growth, say 92,4% of resellers polled.
When it comes to hardware services, 85,2% think infrastructure as a service will grow, and 96,3% of resellers anticipate growth in device as a service.
Anticipated growth for warranties is slightly less buoyant, with 17,6% of resellers predicting a decline.
Volume sales
Resellers are optimistic about the staying power of mobile computing (notebooks and tablets), with 80,8% of the businesses polled by Context believe they will sustain their demand.
However, just 52,8% of them believe home working devices – printers, monitors, headsets, webcams, security – will remain buoyant.
The optimism fades somewhat for smart home sales, with 36,4% of resellers anticipating a sustained demand and wearables, which garner just 17,8% of the vote.