Strong growth masks growing uncertainty for channel

More than 65 per cent of partners grew revenue in Q2, but half now expect sales to fall in the second half as customers delay spending and pricing pressures intensify

Strong growth across the first half of 2026 has masked growing uncertainty across the IT channel, with partners increasingly cautious about customer spending, pricing pressures and product availability, according to analyst firm Omdia.

Speaking at an Omdia event in London, principal analyst Alastair Edwards said the channel had enjoyed a robust start to the year, but warned that confidence was weakening as businesses looked towards the second half of 2026.

“We are seeing an incredibly dynamic, challenging market in EMEA,” he said.

Omdia’s research found that more than 65 per cent of partners grew both revenue and profitability during the second quarter. However, 53 per cent said the majority of their customers were now cutting back or delaying IT spending, while half of partners expect their own revenues to decline during the second half of the year.

SMB customers appear more resilient, with only around a third of partners reporting widespread spending reductions among smaller businesses.

However, Edwards said partners were increasingly having to help customers navigate rising hardware costs and supply uncertainty.

“Customers [are] facing the risk of how to manage price rises, and some of those price rises are exponential. How to ensure access to product when that product is going up in cost.”

Growth fuelled by forward buying

The strong first half was partly driven by customers accelerating purchases ahead of expected price increases and supply constraints.

“We’ve seen a very strong first half,” said Edwards. “Much of that is being driven by some upfront spending by customers. They want to secure access to infrastructure, to products ahead of potential supply crunches.”

That has helped boost both revenues and profitability, but it has also created new operational challenges.

Partners are holding more inventory, managing larger order backlogs and dealing with shrinking quote validity periods as vendors respond to changing component costs.

While higher prices have supported margins, delayed deliveries mean some partners are unable to recognise revenue until products ship.

Nevertheless, Edwards said profitability prospects remain stronger than revenue expectations.

“Partners are more positive. They’re seeing their profits continuing to grow. That sounds like a bit of a contradiction, but partners are finding that as price inflation drives their business, they’re seeing more and more real dollars going into their P&Ls.”

Ultimately, Edwards said uncertainty had become the defining characteristic of the market.

“What all this leads to is much greater unpredictability for customers and for partners. This is the reality of the environment we’re facing in the second half.”