12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

12 partner bosses place their technology bets for impending recession

Technology is often painted as a relatively recession-proof sector, with some areas of business IT spend even running counter-cyclical to GDP growth trends. It can also help firms cut overheads and make productivity gains.

With the Bank of England warning this month that the UK will officially enter a recession in Q4 (and inflation yesterday hitting 10 per cent), which technology solutions and services are top channel partners betting on to keep their tills ringing through the tough times?

Will RPA, software optimisation and refurbished hardware all take off? And to what extent will spend on new devices and big refreshes dry up?

CRN caught up with 12 leaders of UK MSPs, resellers and IT services outfit to find out which tech they think will fly - and which will falter - over the next six to nine months…

Andy Wright

Chief revenue officer, XMA

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Recession-fuelled technology tips: Task automation, service renewals, consumption models

In the danger zone: Client devices

What technology solution or service are you betting on to help customers in the event of a recession later this year?

I think it's important to note that when the Central Bank are predicting a recession is coming, it's because you are already in one and they just need the official tick in the box (two consecutive quarter of negative GDP growth) to call it a recession.

It's going to be more of the same if I am honest. Customer needs have already been driven by staff and skills shortages, plus rising costs driven by the supply side of the global economy and the impact of the 10 per cent swing, so any technology that can lead to increased productivity, effectiveness, and task automation are high on the customer shopping list. I also expect customers to be looking at how they extend the life of solutions, so basic support agreements and service renewals, though not sexy, may well be of interest.

Any technology that can lead to increased productivity, effectiveness, and task automation are high on the customer shopping list

Where customers are struggling for raw cash, clearly we expect pay as you go, consumption models to start to also become very popular.

Conversely, are there any technology areas where you are anticipating a spending crunch?

Demand for client devices has got to take a hit, partially because of the downturn from the heightened demand that the pandemic drove - meaning there are a lot of new devices out there. But also device costs are up by 20 to 25 per cent this year depending on device type. So that does not make you feel that this area will be unscathed.

How do you feel an economic downturn will play out for the UK IT channel more broadly?

I started working in the channel in 1991 when we were in the middle of a five-quarter recession. 2008 was also a five-quarter recession and then of course COVID drove a two-quarter recession, though clearly the impact of this was tempered by government intervention such as the Furlough scheme. All have been unique situations, so if you look at the early 90s the cost of money was high (base rate was about 14per cent) so cost of money became a limiting factor.

In terms of how business could react this time I think we are going to be in for a very bumpy ride as the shock to supply side has driven the economic outcomes. Labour shortages, plus oil being at over $100 a barrel and war in Ukraine are all driving inflation at the same time the fragile supply chain has driven elongated delivery of projects. Hence, why there will be pressure on the cash flows of some businesses. As we start to see the demand side of the economy adjust to those pressures, which it will, I think those businesses with weak balance sheets and working hand to mouth could find it very difficult to survive.

Which Microsoft partner is betting on Microsoft Teams and Viva to help customers through the recession? See next page...

12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

Margaret Totten

Managing director, Akari Solutions

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Recession-fuelled technology tip: Microsoft Teams, Microsoft Viva and automation

In the danger zone: As above

What technology solution or service are you betting on to help customers in the event of a recession later this year?

Microsoft Teams, Microsoft Viva and automation.

The collaboration and productivity message are vital to companies looking to deal with an economic downturn. As they are put in the place of needing to do more with less, these tools are the solution.

Solutions like Viva within Teams give organisations quick wins utilising existing solutions

With employee wellbeing it will be vitally important to continue monitoring morale and wellbeing as people are any organisation's biggest asset. Solutions like Viva within Teams give organisations quick wins utilising existing solutions and gives key productivity wins with app loading and communication with internal and external users and applications, which in turn stops the costly expense of shadow IT.

The growth in citizen development will also be a boost to help organisations learn how to improve and streamline from the help of the people who know best: those doing the job. That, coupled with solutions like Microsoft Power Apps and Power BI, will give organisations more control over their internal processes and help them combat cost cutting measures without losing productivity.

Conversely, are there any technology areas where you are anticipating a spending crunch?

Ironically, I think in the beginning the very same value adds I mention above may fall victim to cost cutting. When trying to budget, we automatically go into contraction mode, where we can save and stop spending and we then double down. But that can lead to a false economy. Actually investing in some quick, simple solutions that provide longer-term cost savings will be more financially beneficial.

How do you feel an economic downturn will play out for the UK IT channel more broadly?

I think something Satya Nadella said recently sums it up best. ‘Digital technology is a deflationary force in an inflationary economy'. I think, as everywhere, there will be some pain as customers cut spending. But I feel that technology companies and the channel are uniquely placed to actually help and pull organisations back out of the mire. Just like in the pandemic, in times like these, the first thing businesses should be looking at are how to make gains in productivity. Investing now in ensuring they are using the right solutions can help solve issues like accommodation, hybrid working and can help boost engagement and employee well being which is vital during this. I believe the UK channel has a huge part to play in driving the UK economy forward and helping customers when they need it most and a unique opportunity to ensure that purpose driven technology helps deliver real world gains when we most need it.

Which reseller boss is backing optimisation services to thrive during the impending downturn? See following page for more...

12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

Sam Mudd

Managing director, Phoenix Software

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Recession-fuelled technology tip: Optimisation services

In the danger zone: Project work

What technology solution or service are you betting on to help customers in the event of a recession later this year?

We believe customers will still require solutions that help them do more with less, so optimisation services and helping them deploy technology they already have the entitlement to use will be key and add value to our customers. Cyber security will remain an important topic irrespective of the financial situation.

Conversely, are there any technology areas where you are anticipating a spending crunch?

As we've seen during the pandemic and in previous recessions, technology investments can help organisations adapt to change and financial pressures. It's hard to predict the specific areas of technology that may experience a crunch as each organisation will have different priorities depending on where they are, so we may see projects pushed out, not necessarily going away forever. We are still seeing high levels of technology investment across the board as organisations cannot afford to stay still.

How do you feel an economic downturn will play out for the UK IT channel more broadly?

I am always a cautious optimist and believe that any economic downturn will have an inevitable bounce back

I am always a cautious optimist and believe that any economic downturn will have an inevitable bounce back. Maybe six months or less…we are a resilient country and IT is necessary component of how we will deal with any challenges. We have been here on numerous occasions and technology is the solution to most problems or at least has a role to play. Its simply a case of working out what type of technology will have the most profound impact on your customers business issues, or resource / skills constraints.

Which MSSP CEO thinks a recession could force companies to apply the brakes to rising cloud costs? See next page for more...

12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

Guy Golan

CEO, Performanta

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Recession-fuelled technology tips: Protecting digital assets from laid-off employees, vendor consolidation and stack alignment services

In the danger zone: Cloud spending

What technology solution or service are you betting on to help customers in the event of a recession later this year?

In my view there will be two dominant categories, namely cost saving and protection of digital assets from laid-off employees/unhappy employees.

Cost saving:

Protection of digital assets:

Conversely, are there any technology areas where you are anticipating a spending crunch?

Personally, I think there might be a move back into datacentre/on prem (cloud cost is accelerating, especially on the strong US$). Alternatively, companies will slow down cloud adoption and major programmes, which normally consume a hefty amount of money before any value is shown (cloud may be one of those).

I think there might be a move back into datacentre/on prem (cloud cost is accelerating, especially on the strong US$)

How do you feel an economic downturn will play out for the UK IT channel more broadly?

I don't think this will massively affect highly regulated and enforced markets. The cost of not doing security is much higher than recessionary costs from a tech sale perspective, however customers will increasingly look for "proof of value", in tech and services, so good service providers with relevant tech and services mix will stand out.

Vendors may be tempted to approach the market directly and marginalise the channel. This may turn to be a short-sighted view that will cause credibility issues between the vendors, distributors and resellers.

See next page to find out why Highgate's Bob Sahota thinks tier-two vendors and distributors might win during the downturn...

12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

Bob Sahota

Sales director, Highgate IT Solutions

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Recession-fuelled technology tips: Third-party maintenance services, aaS, refurbished hardware, tier-two vendors, DMARC protection

In the danger zone: Infrastructure upgrades and luxury purchases

What technology solution or service are you betting on to help customers in the event of a recession later this year, and why?

Clients may hold back on large capital expenditure projects, either sweating their assets further or exploring Opex models. That opens the door for resellers to offer third-party maintenance services for the former or leasing/finance/aaS solutions for the latter. Refurbished hardware is likely to become a popular route once again, as it hits a lower price point than new kit, is more readily available and will support a company's sustainability posture.

End users may also become more willing to explore tier-two vendors that they previously would not have. Wasabi is a perfect example of cutting-edge cloud storage technology to rival the big three public cloud providers, at a fraction of the cost.

End users may also become more willing to explore tier-two vendors that they previously would not have. Wasabi is a perfect example of cutting-edge cloud storage technology to rival the big three public cloud providers, at a fraction of the cost.

There is also a strong possibility of more frequent and/or sophisticated cyber-attacks, including ransomware and spoofing. Whilst most end users have a cyber strategy against ransomware, areas like DMARC can get neglected, leaving them open to spoofing and impersonation attacks that could be extremely damaging both financially and to their reputation. Red Sift are a vendor leading the way in the DMARC protection space.

Conversely, are there any technology areas where you are anticipating a spending crunch?

The question I can see clients asking is "Do we need to buy it now, or can we get by with what we have for a bit longer?". End users could be asked to sweat devices longer than they would perhaps like. Planned infrastructure upgrades might get pushed back whilst it still does a job. The ‘luxury' purchases will probably take a back seat to the necessary ones.

How do you feel an economic downturn will play out for the UK IT channel more broadly?

VADs like Distology, Titan, Climb and QBS operating in the tier 2/3/4 space may thrive due to their disruptive vendor technologies and aggressive pricing models

Although technology requirements are constant, we can probably expect a fairly turbulent ride across all areas of the IT channel. Resellers and MSPs whose business models have been largely focused on growing their annuity/MRR and/or software numbers are likely to be impacted less than the traditional resellers that are highly transactional and live month to month. VADs like Distology, Titan, Climb and QBS operating in the tier 2/3/4 space may thrive due to their disruptive vendor technologies and aggressive pricing models. From a recruitment and employee perspective, no one wants to see it, but the reality is that there could well be channel-wide redundancies. If that were to happen, it could rebalance the scales towards employers once again, where it has been so heavily candidate/employee led in recent years.

See next page to see which IBM partner's boss is betting a shallow recession will breathe new life into the services market....

12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

Andy Haley

Managing director, Meridian IT

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Recession-fuelled technology tip: Opex spending and outsourcing of specialist skills

In the danger zone: Capex-intensive spend including on devices and printers

What technology solution or service are you betting on to help customers in the event of a recession later this year?

In a shallow recession the services market tends to be counter cyclical. So we would expect customers to switch from larger Capex spend to an Opex model to fulfil sever and storage workload requirements. Outsourcing of specialist skills such as software development would normally do better in a shallow recession. In other words, despite the dire predictions, if the recession is a shallow one, or even a long, drawn-out one, I'd expect customers will want to continue to make investment decisions, especially where the opportunity to gain competitive advantage exists or a desire to stretch RoI will strengthen the business case.

Conversely, are there any technology areas where you are anticipating a spending crunch?

Paradoxically I'd expect to see Capex-intensive spend slow down quite quickly - desktops, laptops and printers etc.. there's very little competitive advantage to be gained from this kind of spend during a recession so it's difficult to justify and easier to freeze. But a deep recession over a long period would see IT Capex expenditure of all kinds freeze - creating technology debt within a business.

I'd expect to see Capex-intensive spend slow down quite quickly - desktops, laptops and printers etc.. there's very little competitive advantage to be gained from this kind of spend during a recession

How do you feel an economic downturn will play out for the UK IT channel more broadly?

We have seen a record high M&A within the reseller and channel market of late and I'd expect this level of consolidation to continue - but the market value of many of the acquired will drop dramatically. Without ‘scale', it's difficult to thrive in a down turned market and many owners will very sensibly ‘run for cover'. Having said that, as we saw with the pandemic there are always ‘winners' as well as ‘losers' in any market. Many businesses will do better than anticipated; that's what makes it so interesting.

Creative and marketing automation tools may be on the chopping block during the recession, according to the partner boss interviewed on the next page...

12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

Mark Petty

Sales and marketing director, Littlefish

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Recession-fuelled technology tips: Cloud and RPA

In the danger zone: Creative and marketing automation tools

What technology solution or service are you betting on to help customers in the event of a recession later this year?

Cloud migration allows organisations to better manage the rise of energy costs, and adds agility to spin up, or down, environments as organisations shrink or grow people and technology requirements.

Investment in technology for augmentation and automation are far from peak and with a recession, I believe this will accelerate investment in chatbots and robotic process automation. RPA can make significant savings in both time and resources and the longer the recession, the more likely this technology will become heavily utilised.

Post pandemic you would like to think organisations are now au fait with remote working and have excellent collaboration platforms such as Microsoft Teams, but this may not be the case. With expenses wanted to be controlled during a recession, I suspect this technology will be in high demand to reduce travel, in-person meetings and the associated costs but collaboration processes will need to be on point.

RPA can make significant savings in both time and resources and the longer the recession, the more likely this technology will become heavily utilised

Conversely, are there any technology areas where you are anticipating a spending crunch?

Most organisations when challenged in a downturn typically cut back on marketing and advertising, so I would suspect less investment in things like SEO, Google PPC, Linkedin Ads. As a result, technologies that assist in this domain such as creative tools like Adobe, content providers like Getty or Shutterstock and marketing automation technologies like Hubspot, Pardot could see less investment than normal.

How do you feel an economic downturn will play out for the UK IT channel more broadly?

Technology is now so dominant in our lives that investment cannot simply be stopped. Organisations will prioritise based on their own needs, so it's very difficult to identify who in the channel will thrive and who will struggle or worse, cease trading. If commentators are to be believed, post pandemic there are many MSPs and VARs with very challenged balance sheets and a recession following so soon on the tail of the pandemic will have serious consequences for those without financial strength in depth. I believe the recession will be relatively shallow and short-lived, so the impact won't be as aggressive as it could be. It will drive greater opportunity for MSPs as IT services are more difficult to decouple than commodity tech spend, whilst project based work, unless of critical importance, is easy to delay.

Which Microsoft partner is responding to the recession by swiftly introducing several new "zero-cost services" designed to help customers weigh up their options before they commit to spending anything? See next page for more...

12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

Conor Callanan

CEO, Core Technology Systems

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Recession-fuelled technology tip: Zero-cost services such as feasibility workshops

In the danger zone: Device refresh

What technology solution or service are you betting on to help customers in the event of a recession later this year?

We are offering several new zero-cost services to support customers in their technology journey to facilitate going further in the buying journey before encountering cost barriers. These include technology roadmap engagements, feasibility workshops, deployment planning sessions and leveraging services like Microsoft FastTrack to deliver no-cost migrations. This enables customers to be more informed of the real business impact, before making financial investments.

We are speeding up customers moving to Autopilot and Cloud MDM to reduce cost of device management - in particular remote building and rebuilding and having devices sourced locally, reducing transportation costs and better for the environment.

We are offering several new zero-cost services to support customers in their technology journey to facilitate going further in the buying journey before encountering cost barriers

Conversely, are there any technology areas where you are anticipating a spending crunch?

Customer capital expenditure will be under pressure, so device refresh will slow and price pressure on renewals are expected. Knowing and being able to articulate your value is very important. Moving Capex to Opex will be pivotal. There will be more focus on the Finops of Opex expenditure.

How do you feel an economic downturn will play out for the UK IT channel more broadly?

This will vary between sectors, but generally this presents greater opportunity for the more agile channel partners. Technology is a great enabler of efficiency and doing more with less. Combine this with the rising penalty for customers doing what they've always done and this will push up demand and the sense of urgency to modernise.

IoT will win out in the recession, according to which partner boss? See next page...

12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

Glen Williams

CEO, North

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Recession-fuelled technology tip: IoT solutions, including those that can help cut energy consumption

In the danger zone: Spending in retail and other sectors reliant on discretionary spending

What technology solution or service are you betting on to help customers in the event of a recession later this year?

North focuses on delivering smart infrastructure services and solutions to large enterprises and public sector organisations. We believe that a number of the IoT and connectivity solutions that we sell that focus on improving environmental conditions such as measuring pollution levels, reducing water leakage or those which help in energy consumption reduction will be very important over the next 12 months. The technology is there to deliver these solutions and now the business cases stack up too, so I expect to see considerable growth in these areas.

Conversely, are there any technology areas where you are anticipating a spending crunch?

I'm not so sure it's technology areas, it's probably more specific market verticals that rely on discretionary spending, such as the retail sector, that may face challenges over the coming 12 months. The biggest challenge in the market is the current supply chain disruption as in the overall market demand is there and the challenge is in securing product supply.

Typically in a downtown, organisations tend to invest in IT that can deliver real, measurable savings, and I think that this will continue in any future economic downturn

How do you feel an economic downturn will play out for the UK IT channel more broadly?

Typically in a downtown, organisations tend to invest in IT that can deliver real, measurable savings, and I think that this will continue in any future economic downturn. The only negative effect on the UK IT channel will be driven by the current supply chain disruption which could mean that IT projects are delayed.

Which partner CEO feels their 'zero waste' mantra will gain traction over the coming months? See next page...

12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

Dino Cooper

CEO, Viadex

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Recession-fuelled technology tip: ‘Zero-waste'

Zero waste is our campaign headline.

When I started in the industry, [the late Northamber founder] David Philips said to me in the late 80s, early 90s sometime, that directors will cancel their new PC before they cancel their new company car.

We are a long way from that today. Zero waste is about ensuring that you have control of your FinOps: everything from licensing and consumption spend to physical device management, support and lifecycle costs. We saw in the pandemic companies accelerate their move to outsourced and contracted services as they sought to reduce headcount, preserve cash and focus their IT teams on true digital transformation. Our focus on what I call "plumbing and engineering" takes care of the platform and tooling our customers' businesses operates on so they can focus on their business.

See next page to see which partner is betting on technology consolidation and optimisation services to hit the mark during the downturn...

12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

Rob Quickenden

CTO, Cisilion

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Recession-fuelled technology tips: Technology consolidation and optimisation services

In the danger zone: Large network and datacentre refreshes

What technology solution or service are you betting on to help customers in the event of a recession later this year?

For us this is a service thing which then cross pollinates to product and technology. In short this falls in to 2 categories.

The first is technology consolidation and adoption services.

Most customers we work with have multiple products from different vendors for solution areas like collaboration and security. Gartner published something in Dec 2021 that said vendor consolidation in the security space is a top three [priority] for IT leaders. Organisations typically have somewhere between 16 to 46 different products, many of which overlap.

The second area is managed services and optimisation services.

MSPs can help keep and control cloud spent through smart licensing, leverage hybrid use rights, RIs etc without any platform changes

The biggest cost for most organisation (outside of real estate) is people. Shifting and leveraging services like maintenance, secops, support and general IT management to a partner (whether that's full outsource or managed services around say LAN, WAN, UC, security etc) is also on the up. Linked to this is the value an MSP can bring in terms of not just keeping lights on but also cost optimisation. Many organisations overspend massively on cloud. They may have tools and dashboards to show spend, but proactively keeping control of cloud spend is specialist and requires people (more cost). MSPs can help keep and control cloud spent through smart licensing, leverage hybrid use rights, RIs etc without any platform changes.

Conversely, are there any technology areas where you are anticipating a spending crunch?

I think we will see another drop in big investment projects such as network and DC refreshes unless critical.

How do you feel an economic downturn will play out for the UK IT channel more broadly?

I think for UK channel partners that have a diverse set of services and product offerings, it's about keeping agile, focusing on the customer and their needs. They may struggle to pay, they may need help, as will we. If we don't look after customers, everyone else will be there to mop up and take over their business. So I think the right IT channel partners that really "invest" in their customers will find a way through (this is really like what happened in Covid). In part technology can help with cost control, cost reduction, employee retention, hiring and it's all about being adaptable to change.

See final page for Sweethaven CEO Melissa Rambridge's recession technology picks...

12 partner bosses place their technology bets for impending recession

From RPA and software optimisation to as-a-Service, which technologies will fly - and which will falter - as the UK slides into recession? Partner leaders including Sam Mudd, Andy Wright and Glen Williams have their say...

Melissa Rambridge

CEO, Sweethaven IT

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Recession-fuelled technology tip: IT as a service

In the danger zone: Large systems upgrades

What technology solution or service are you betting on to help customers in the event of a recession later this year and why?

There is a need to finish the progress made during the COVID-19 pandemic and truly ensure more complete working adaptability. The threat being that recession often results in an IT spending squeeze. For businesses to achieve a fully adaptable work force in terms of size, capital outlay and cloud-based systems, we believe that hardware, software and support-as-a-service enables expansion or contraction at a fixed monthly cost per capita with costs or indeed savings appreciated. With this in mind, the spike of hardware investment is removed and the kit renewed every three years with the differential to getting a suitable grade of kit minimal.

For the education sector specifically, enablement of more cloud-based solutions for kit optimisation, such as harnessing of the Google platform with Neverware, will be key for continued true value for money.

Large capital outlay on systems upgrades tends to be the first to come under pressure

Conversely, are there any technology areas where you are anticipating a spending crunch?

As per above, large capital outlay on systems upgrades tends to be the first to come under pressure.

How do you feel an economic downturn will play out for the UK IT channel more broadly?

All costs including IT costs are normally examined with more zeal; costs for IT professionals have increased disproportionately to the rest of the market and increased costs to the customer will be resisted. This presents a number of possible eventualities that will need to be considered: