Channel bullish about 2003

IT players reject prime minister's gloomy warnings and claim industry is ready for recovery

Despite a bleak new year message from Tony Blair, UK channel players have claimed the IT industry is in a good position to weather the predicted economic storm in 2003.

Last week Blair highlighted the terrorist threat, possible attacks by Iraq and the continued economic slowdown.

"I cannot recall a time when Britain was confronted, simultaneously, by such a range of difficult and, in some cases, dangerous problems," he said.

However, the UK channel seemed to be quietly confident. "I don't think it is all going to be doom and gloom because there have been signs of the green shoots of corporate spending over the past quarter," said Alan Norton, head of intelligence at credit management company Graydon.

The channel will see more consolidation, but because a lot of cost cutting was done last year, customers are now in a better position, he added.

James Ward, sales manager at distributor Hammer was also positive. "We think this year will be a lot better than last and customers are more upbeat," he said. Ward added that January to March is usually a strong quarter, but the crunch will come in May and June, when business tends to slow down.

Steve Brazier, chief executive at analyst Canalys.com, said firms that survived the past two years are likely to live through any downturn in 2003.

"Companies such as IBM, Cisco and Hewlett-Packard that battened down the hatches two years ago should be looking optimistically at the future. We are beginning to see who the winners and losers are," he said.

Greg Carlow, managing director of systems integrator Repton, was also bullish. "Other industries haven't had the surge that IT has experienced over the past two years. But I think we will see a more stable environment, with steady deployment of applications that will keep the channel going," he said.

Carlow said vendors will rediscover the costs involved with direct selling, which means the channel will benefit.

Additional reporting by Ben Tudor.