IDC predicts hike in services demand

Survey Vendors have accepted they need the channel, says IDC.

Research giant IDC has suggested resellers are in for a prosperous 1999, despite worries about vendors' attempts to encroach on the channel's business.

Demand for services from the SME sector is expected to balloon during the coming year, creating huge opportunities for resellers. Vendors are increasing their focus on the SME market but according to the latest IDC survey, Service Partnering Opportunities in the UK, they have accepted they need channel partners for fulfilment.

However, the vendors' wooing of the channel is not being met with open arms. Marianne Kolding, research manager of the UK services programme at IDC, said: 'There is a danger that the channel is not reciprocating this sentiment. There is a crossover between resellers and vendors in the services space - resellers perceive vendors as eating up the sector, yet vendors need partners to target business. It's a difficult balancing act.'

Compaq, Microsoft and IBM were highlighted as strategically attractive to resellers. Kolding added: 'This should be seen as a call to action for other vendors, which were claiming the channel was important to their success.'

The survey revealed that vendors' service packages were only used by 50 per cent of resellers surveyed. The others chose to develop their own unbranded offerings.

Kolding said many resellers planned to adopt branded packages within two years. 'It's easier to allay fears with a known brand,' she said.

However, the package is often used simply as a base product - 87 per cent of resellers already customise packaged services.

THE PC SHIPMENT FORECAST
IDC has predicted that PC shipments will climb 12.2 per cent in the fourth quarter, with 1999 expected to herald 100.6 million shipments, up 12.8 per cent from 1998.

Bruce Stephen, group vice president of personal systems at IDC, revealed that Europe is one of the key growth areas. Western European shipments are expected to reach 26 million in 1999.

However, the rise in cheap PCs was denting sales. Stephen estimated that shipments will climb 12.8 per cent in 1999, but revenue will only creep up four per cent.

PC manufacturers will have to look to other sources of income, such as services, to shore up revenue and profit margins. IBM has already announced that in January it will launch its global services division, Lotus Worldwide Services and Solutions Group.