Consolidation and change will leave room for service-led vendor-reseller partnerships

Phil Jones, managing director of information, communications and technology provider Brother UK, discusses his expected trends for the channel in 2017

Like many markets, the IT industry has faced a wealth of uncertainty in 2016. The unpredictability of global economics and major news events like the EU referendum result have meant suppliers and customers in a range of different sectors pause on major decision making.

Looking at the industry in a post-Brexit world, price inflation is set to have a significant impact on the market. Both euro- and dollar-based vendors won’t be able to absorb currency devaluation at their current rates. If the pound stays at the levels we’ve seen since June, we’ll likely see hardware pricing across all IT sectors increase.

However, what still rings true for the IT industry and the channel, and this is set to persist next year, is ever-growing focus on providing services rather than selling stand-alone hardware. Increasing this value chain is driving new opportunities for the channel and vendors to work together to innovate.

In 2017 I believe a growth area will be service delivery contracts or Service as a Service with project and service desk management becoming standard for large scale contracts. Meanwhile fleet optimisation and audit services will become better established as hygiene factors for customers rather than a nice-to-have for print vendors and resellers.

The print world specifically is also set to continue its transformation. Demand for multi-function devices will outstrip single-function printers and the colour laser market will grow to displace some mono laser requirements from end-users. The focus for next year will likely be on high-volume devices. Given the increasing speed of the market, particularly at the SME and enterprise level, vendors will be looking to secure print volumes through the promotion of higher value devices. With this we’ll also see high-volume ink tanks increasingly featured in inkjet models to improve customer loyalty for consumables.

Both the large and small markets are set to grow. Demand for A3 printing of large spreadsheets and documents will increase in businesses of all sizes while portable and mobile printing devices will fulfill opportunities in new sectors and applications. We’re also likely to see Basic Print Services (BPS) evolve as the adoption of MPS contracts grows at the smaller end of the market. This simplified proposition to support end-users and drive revenues for reseller and vendor partnerships will become increasingly mainstream.

Pressure on the channel industry will come from the changing business landscape. Next year there will be significant risks of bad debt or business failure. Reseller M&A activity will continue in the new year too and smaller businesses will likely continue to be acquired by larger corporates – aligning their customers under one common cost model.

Amid new buoyancies of different elements of the print market, a drive toward services to suit customers and merger and acquisition activity shrinking the breadth of the market, vendor-reseller partnerships that are grounded in innovation of services are set to flourish.

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Posted by Austin Clark (95)

Written on 15th December 2016

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