Contraction in sales cycles sparks channel optimism

Signs of increasing sales activity hint at tentative recovery

Sign of the times: Some channel players are witnessing a return to the spending patterns of old

Industry players are starting to see an uplift in customer orders and some have even reported a shortening of the sales cycle in recent weeks, a CRN straw poll has revealed.

CRN spoke to senior managers in a cross-section of top channel firms to find out if it was still too early to be talking about the green shoots
of recovery.

Robert May, managing director of Ramsac, said customers have suddenly started approving purchase orders at the pre-recession rate.

“During the downturn, the amount of hours we needed to put into a deal has practically quadrupled, because clients ask for quotes, then they request a meeting and then they take time to think about it again. However, in recent weeks we have seen a difference in clients banging back purchase orders.”

Richard Parker, managing director of recycling specialist EOL IT Services, agreed.

“Things are definitely improving,” he said. “In terms of new kit, the process seems to be speeding up and it seems that the restraint on spend has been released in some sectors. We have noticed a change in the banking sector which seems to be refreshing kit, which in turns boosts the recycling business.

“However, some economists are talking about a double dip, so we are still treading cautiously.”

Mike Norris, chief executive of Computacenter, predicted that next year will see an improvement.

“2010 will get better in the second half of the year. That is when things will start to pick up,” he said. “I think the VAT rate increase [at the end of December] will make a difference in the second half of this year ­ but it will just be a little spike.”

Simon Aron, join managing director of Eurodata, said particular verticals ­ specifically finance ­ were returning to the spending patterns of old.

“These people are betting against the market and are winning, so they are saying yes to everything,” he said. “But it is certainly not the case in most sectors, such as construction, healthcare, legal and media ­ generally people are still cautious.”

However, Aron said he is expecting a “huge” takeup of Windows 7 and Microsoft Server 2008 R2 in Q1 next year.

“I would say 90 per cent of customers are waiting for that to be launched next month before they even think of a refresh,” he said.

Damien Harold, managing director of Xact Marketing, also felt more positive.

“We are doing a lot of calling on behalf of manufacturers and channel firms, and we went through a stage over the last couple of months where end users were putting things off until January 2010,” he said.

“We are not getting that so much now ­ we are getting a lot more leads and are surprised at the amount of activity out there. We are not hearing that sales are up, but a lot of managing directors are telling us they have a strong pipeline.”

Tom Kelly, UK managing director of Logicalis, was more cautious. “We have noticed that the order intake has gone up, but it has gone up at the expense of reduced margins,” he said.