The tech hardware industry may be facing something of an existential crisis if one veteran analyst is correct – the days of shifting boxes are going to be limited to mere replacement cycles.
"For 30 years or more, the channel has actually been easy to run. You thought you were all business leaders and geniuses for the success you had. But if we boil it down, you sat there, you waited for new hardware products to launch in all sorts of different categories, and you followed that growth as those different categories grew year after year after year.
The travails of the channel are reflected by the traditional big brands whose legacy operations faltered. Cisco, for example, has struggled to lift its switching and router business out of the doldrums, reporting "Running flat business is OK, but they're all essentially flat, a replacement business. The outlier is cybersecurity," he said, which remains a double-digit growth market as the cyber baddies are relentlessly still causing harm."Actually, one of the biggest differences between the US economy and the European economy is the US has more immigration. But politically, it's so hard for politicians to stand up and say, 'If you want more growth, we need more immigration'.
Sønsteby continued:"I feel comfortable that the IT industry will keep on growing as digitalization has never been more critical. The channel in Europe will consolidate to fewer and bigger players as the OEMs downsize and need the channel more than ever – but need players that can add value for the OEM and the customers."Chinese clouds target small and medium enterprises in APAC in search of growth– saying:"I think the general feeling was that he was being overly pessimistic.
"To put this into words, had you invested $100 in the S&P500 on Jan 1 2024 you would have had $126 as of Jan 6. Had you invested $100 in the publicly quoted channel partners over the same period you would have had $82. So, I know the partner CEOs try to sound positive but can you imagine the conversations in their boardrooms this year?"