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Another year of growth for IT distribution

After a strong 12 months, experts are predicting continued channel growth in 2019, with new opportunities created by digital transformation and the Fourth Industrial Revolution outweighing the negative impact of macroeconomic headwinds, including Brexit.

In its new report, Technology and Channel Predictions 2019, IT market intelligence company CONTEXT warns that year-on-year growth in the IT distribution channel will start to slow in Q2 2019 as Brexit impacts demand in EU economies.

For 2019 as a whole, it is predicting year-on-year growth of 3%-6%, compared to 6.7% in 2018 (8.7% in the UK).

CONTEXT is urging channel players to ensure they have contingency plans and adequate stock in place in the event of a no-deal Brexit and to make sure budgets cover any temporary downturn in revenues caused by social upheaval like the French gilets jaunes protests.

It also warns that price pressure from etailers could lead to further industry consolidation.

On a more positive note, CONTEXT points out that digital transformation offers a great opportunity for channel organisations to drive growth by meeting growing demand for secure solutions, hybrid cloud and hyper-converged infrastructure, whilst evolving their own value propositions to align with new consumption models.

Meanwhile, the Fourth Industrial Revolution will bring continued growth opportunities in areas such as AI, IoT, 3D printing and autonomous vehicles.

Nick Westcott, UK & Ireland Country Manager at CONTEXT, said: “Brexit is making any accurate predictions about UK performance extremely difficult, although all European markets are likely to continue with positive channel growth this year, even if some — like France, Spain and the UK — don’t quite match their strong 2018 numbers. For those distributors ambitious and agile enough to support their partners’ and customers’ digital transformation requirements, there are gains to be made in cloud, hyper-convergence, cybersecurity and solutions that deliver on the promise of the Fourth Industrial Revolution.”

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