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Chip and skills shortages dent channel confidence

Most VARs, MSPs and system integrators are looking forward to another year of single figure growth, according to a survey of UK partners by Nuvias Group.

New research by the distributor reveals that 75% of respondents grew by between 2% and 10% in 2021, with 62% expecting to increase revenue by the same amount this year.

More than one third (35%) say they expect to grow by more than 10% in 2022, slightly lower than the 40% who were predicting that level of growth in 2021’s survey (in the end, only one quarter of those anticipating growth of more than 10% last year achieved it).

Nuvias attributes the decline in expectations to a more realistic understanding of the long-term ramifications of the pandemic and other challenges, such as the global chip shortage, the shift to hybrid working and the difficulty in recruiting people with the right skills.

Interestingly, competitive bidding emerges as the biggest challenge, cited by 62% of respondents this year, compared to only 18% in 2021.

The role that distributors can play in helping the channel to overcome these obstacles is highlighted by the fact that half of respondents are looking to Nuvias for help with pre-sales support and marketing and lead generation. More than one third (38%) value its assistance in supply chain/ order tracking.

On a more positive note, there are growth areas, notably cybersecurity, which is seen as the biggest opportunity by 78% of respondents, followed by cloud security (56%) and, in distant third place, network visibility (27%).

Network visibility is cited by three times more respondents this year than last (27% vs. 10%), most likely because of the need to manage extended networks to support hybrid working practices.

Overall, respondents are ambivalent about hybrid working. While 40% find it beneficial for productivity and 30% for strategic thinking, 40% say that it makes running their business harder. One fifth (22%) find the inability to see customers and colleagues in person frustrating.

Nuvias Group has increased its footprint in Eastern Europe with the acquisition
of Netsafe, a fast growing value-add cyber security and networking distributor operating in Romania, Croatia, Serbia, Slovenia and Bulgaria. Netsafe will continue to operate under its existing brand as a Nuvias Group company. Commenting on the acquisition, Nuvias Group CEO Simon England said: “Nuvias sees significant promise and opportunity in the Eastern European market. With Netsafe we have a platform for considerable growth in this region. We have a very strong match in our philosophy and approach to specialist value-added distribution, making for a solid base for accelerated growth.”

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