How trust, resilience and adaptability defined an unprecedented year in the IT channel

Over the past 35 years, we've been empowering channel businesses through expert analysis of industry data, to help them make better informed decisions. Yet nothing prepared us for the unprecedented events of the past 12 months.

Still, the resilience the sector has shown has been remarkable. The collaboration, adaptability and trust that has helped us through 2020 will surely stand vendors, distributors and retailers in good stead heading into the new year.

Adapting and thriving

When lockdowns hit across Europe in the early part of the year many businesses were left reeling. Supply chains were severely disrupted and offices closed, sending business demand plummeting. But from potential catastrophe we saw an extraordinary bounce back by June. A grand re-orientation took place, with home working fuelling a surge in sales of certain product categories. What is remarkable is how sustained it has been. The Lenovo vision of one PC per person, rather than one per household, is where we're heading today.

Throughout this period, it was the hard work and commitment of the distribution channel that powered the recovery—keeping warehouses open and the supply chain flowing. Distributors ensured resellers had supplies, adapting their credit terms.

The power of data

From a CONTEXT perspective, the pandemic made us realise that we had a hugely important role to play in the channel during its moment of crisis through the power of data. Channel business leaders were wondering from week to week what was going on. The market was evolving so fast they needed frequent, meaningful updates and insight, built on solid data. So that's what we gave them.

In the process of our weekly updates, we realised that online is a great way of engaging with the industry. It has helped to foster a level of intimacy and trust between us and our clients and partners which will certainly bode well for the future.

An optimistic outlook

So what will 2021 look like? Well, we provide guidance every quarter and we've been beaten by the market in each of these updates so far in 2020. It looks like the same will happen in Q4 and we hope in 2021. There will be sustained growth in home working and mobility, as we head into the new year. And we're reasonably optimistic that, once a vaccine arrives, many enterprise projects that were put on hold will pick up again.

So here are some predictions for 2021:

• 2021 will be known as the year of digital acceleration as the impact of the Covid crisis drives companies and individuals to invest in transformation projects they have been delaying
• The volume revolution will continue unabated in 2021 as we move towards more flexible IT solutions for people at home and in education
• Homeworking spend will broaden into more categories such as security, wearables, and smart home
• Value will see an upturn in H1 2021 when people return to the office post vaccine, but the underlying trends of infrastructure spend such as servers, storage and networking will still be in decline as the move towards cloud accelerates
• The divide in terms of IT investment will continue to narrow as regions play catch-up in terms of IT spend per capita - Northern vs Southern Europe, Western vs Eastern Europe
• As a consequence markets which are small today will become much more important as future sources of growth. Take a category like webcams and headsets - the largest % revenue growth country YTD is Turkey which has one of the smallest market shares
• Adaptations to the supply chain will continue - new countries will attract investment as a consequence of the previous over-reliance on China
• Stock shortages will continue in certain highly demanded products until Q2 2021
• The crisis has led end customers and resellers to try new vendors they had not used before - this will lead to a rebalancing of portfolios in 2021
• The shortage of people in the IT sector with the right qualifications will continue and companies will start to focus more on retention programmes and innovative recruitment such as the use of apprentice programmes