Recovery position

Channel players are optimistic of a brighter future as analysts report signs of a return to growth

While many of us may be embarking on a dual fiscal and physical belt-tightening exercise after the excesses of Christmas, it would appear from recent figures that IT budgets will not, thankfully, have to adopt the same policy this year.

According to figures from analyst firm Canalys, nearly two-fifths of respondents to its Channel Panel Survey reported that they were doing 'better' or 'much better' than expected for the last quarter of 2003.

There would have been an even greater improvement in the figures if it wasn't for supply shortages in areas such as LCD panels.

At the same time, when vendors start reporting their results this month, researchers at Canalys are expecting that shipment figures will be strong across Europe.

This trend to return to growth is expected to continue this year, the analyst has predicted.

According to Canalys, the channel is starting to emerge from the downturn, growth is returning, IT budgets are being freed up and investors are investing in IT vendors.

At the same time it has noted that consumer spending has not diminished, despite previous warnings to the contrary.

It has also reported the opportunities for resellers in the lucrative voice and data space, but in its latest report it has remarked upon a growing opportunity in the consumer space because of the convergence in IT and the consumer electronics sector.

It would be foolish to count our chickens before the purchase order is hatched, but the signs are that the market is coming good again.

However, the channel cannot afford to be complacent. Despite the encouraging signs, competition, consolidation and other pressures associated with the past few years of the downturn will continue to keep VARs on their toes.

At the same time, shortages that have plagued vendors in sectors such as flat-panels and some notebooks could hinder the green shoots of recovery.