Enterprise hardware takes a hit

Beancounters at Context have added up some numbers after rolling the corporate dice and came to the conclusion that hardware has been the worst hit segment of the enterprise channel market in the first four months of this year.

According to it, data enterprise hardware revenue declines have widened from a per cent year on year in January, to 11 percent in March and 17 percent in April.

Context’s head of enterprise, Gurvan Meyer, said the market has been strongly impacted by the suspension of projects during the crisis.

“While the COVID crisis has evidently impacted sales volumes in March and April, long-term drivers are of greater significance to data centre infrastructure, with the move from on-premise to cloud affecting negatively the sales of mainstream servers and storage systems through distribution”, he said.

The products worst hit between January to April were servers (down 10 percent during that time period) large format displays (down eight percent) and disk arrays – (down seven percent).

Some sectors like computing components continue to do well.

Context found that in contrast, services revenues grew by four percent in April.

Meanwhile software revenues were at 10 percent growth year on year in January, and four percent year on year growth in April.

Meyer said the resilience of services demonstrated how essential businesses have found keeping IT infrastructure going during lockdown, adding:

“If this crisis had happened 10 years ago, the industry would have had great difficulty to assure this continuous support.

“Resellers have been able to maintain consultancy and professional services and the same is true for run services from distributors with advances in tech that allow working from home using corporate tooling/tunnelling while ensuring that security considerations continue to be adhered to.”

Geographically, the European channel is now faring better than its North American counterpart.

Looking ahead to the next quarter, Context is forecasting a decline in revenue growth in Europe of 4.1 percent.

“The positive signs are that in Italy, Belgium and Spain revenue is starting to climb, whilst in the UK, a shortage of big deals is having a negative impact.”