'This will be the European channel's most profitable year ever' - Canalys CEO

Big resellers have prospered during pandemic, claims Steve Brazier, who uses Canalys Channels Forum keynote to tell partners that business next year will be even better

The European channel will log its most profitable year ever this year amid a global health crisis, claims Canalys CEO Steve Brazier.

Brazier used his keynote at this year's virtual Canalys Channels Forum event to tell partners that the COVID-19 pandemic has gifted them a record breaking year for profits amid a surge in demand for IT on a global scale.

He said there has been an influx in demand for products and services from resellers and distributors to aid remote working throughout 2020.

This, compounded with the fact that most channel businesses have saved money on overhead costs such as travel, office space and consultancy fees this year has resulted in all-time high profits for the industry.

"The channel in Europe will also have the most profitable year ever," said Brazier.

"Through to Q1 and Q2 when we were all worried about the future, you cut costs and were able to maintain many of those savings. You spent less on your offices too and as a result your operating margin has gone up because your SG&A has gone down.

"So it is both the success of the industry and the cost cutting we've been able to take which means this will be the most profitable year ever for the channel and a very healthy channel we are too."

Brazier thinks that the channel grew by four per cent in the first three quarters of 2020, and believes that the industry will grow by around five to 10 per cent in 2021.

This is amid a backdrop of economic recession across the EMEA market, with Canalys claiming GDP declined by around nine per cent across the region as a whole.

"Technology has won, the channel has won, distributors have won. It has actually turned into a very good year and we couldn't have predicted that," said Brazier.

Larger corporate resellers have emerged as the winners throughout the COVID pandemic, boosted by an increase in spend from public sector customers scrambling to adapt to the pandemic.

Smaller reseller have struggled throughout the pandemic, with Canalys believing that smaller businesses have bought less technology in 2020.

The PC market was also another winner of the pandemic, claims Brazier. Many anticipating the PC's demise over the last 10 years, said Brazier, but PC vendors including HP, Dell and Lenovo have triumphed during the pandemic.

"Demand will remain strong at least for the next 12 months. The PC industry has had a sea change and is fundamentally bigger now than it was a year ago," he said.