VARs turn back to product resale

Shifting boxes: VARs have staved off the crunch with hardware sales

The recession has forced swathes of the UK’s top VARs to retrench back to product resale activities, according to new research.

Figures from GfK Retail and Technology found that during 2009 large UK resellers and IT mail order firms drew 58 per cent of sales from hardware and peripherals, compared with 46 per cent in 2007. Dur­ing that period services fell from 32 to 25 per cent of sales, while software dec­reased from 22 to 17 per cent.

For mid-sized resellers, hard­ware sales jumped from 34 to 38 per cent of turnover, while services decreased four points to 40 per cent and soft­ware was flat at 22 per cent. But smaller VARs increased their amount of services revenue by six points to 54 per cent.

Sales in the enterprise space have proved scarce. From 2007 to 2009, larger resellers saw revenue from firms with 1,000 staff or more slip from 42 to 26 per cent. For small VARs, the amount dec­lined from 13 to just one per cent. But those in the middle cashed in, growing enterprise sales from 16 to 25 per cent.

Carl West, GfK business unit director, said: “Medium grew its revenue share on the other two because it had a heal­thy spread of customers.”

Across all product areas, market value grew 2.4 per cent in the 12 months to the end of March 2010, despite a 1.6 per cent drop in volume.

West claimed that VARs had proved hardier than box-shifters during the recession.
“IT resellers rode the storm more effectively,” he said. “They also overtook mail-order firms in volume terms.”