Resellers must specialise in order to survive the recession, which could last a decade, according to analyst TechMarketView.
The market watcher predicts that the software and IT services (SITS) market will continue to decline until 2016. Two further downturn years after this would mark a decade without any growth.
Last year, for the fourth year in a row, the SITS market shrank by nearly three per cent, according to the analyst. The downturn is blamed on the economic crisis as well as "disruptive technologies" such as cloud computing, the bring-your-own-device trend and mobile internet.
Although the outlook appears bleak, TechMarketView managing partner Anthony Miller believes VARs can take action to weather the economic storm.
He said: "The days of the generalist reseller are over. It is impossible to be all things to all men, especially at that mid-market size. There is a lot of activity with mergers and acquisitions at the smaller end of the market as well as new players emerging, so it is hard to make a living there.
"Those with a finger in every pie are the ones who will fall into most trouble; you really have to specialise. Whether it is an application suite, a local market or geographically, you have to be specific."
MSP plans to use new acquisition to expand its security offerings
Reseller also saw its operating profit fall five per cent in its financial 2017
Wendy Bahr to bring 18-year spell at networking giant to an end
AdEPT says latest purchase will push revenue beyond £50m