SMB channel anticipates market upswing

SMB channel anticipates market upswing

Several SMB resellers are citing improving market conditions and are ramping up business operations to take advantage of the anticipated upturn.

Several SMB resellers are citing improving market conditions and are ramping up business operations to take advantage of the anticipated upturn. Their comments contradict a new corporate survey, which claims SMB and mid-market organisations remain focused on surviving short-term and are not investing in the long-term.

According to PricewaterhouseCoopers’ sixth biannual Private Business Sector Barometer for October 2009, only one in five organisations surveyed were preparing for the upturn, indicating many were still focused on short-term performance. This was reflected in the number of organisations ranking price as a key driver of competition (30.4 per cent).

It also found 80 per cent of SMBs were prevented from meeting growth targets over the next year by credit and capital constraints. The result was up 30 per cent year-on-year. Of these, 39 per cent highlighted debt as the main difficulty faced when trying to raise capital.

“From a funding point of view, there is a lot of pressure on the banks and in general, to get access to capital and credit, but people are still gun shy. I don’t think things will pick up unless providers open up,” PricewaterhouseCoopers spokesperson, Greg Wills, said.

Distributors and industry groups have previously highlighted access to credit as an issue in the IT channel, as insurers and providers felt the pinch of the global financial crisis. Back in April, key credit provider, CoFace, announced it had cut select customers across high-risk industries including IT, by 30 per cent.

At the same time, third-party credit provider, MoneyTech, has witnessed a spike in reseller and distributor take-up as the IT channel looks to new ways of accessing funding. And distributors, such as Westcon Group and Alloys, have unveiled financing initiatives to help facilitate customer and channel cashflow.

Managing director at SMB voice and data player CommSys, Mal Smith, said one of its biggest challenges over the past year was managing cashflow, after several customers held back their payments. However, the Sydney-based firm continues to grow month-onmonth and, over the past three months, saw bad debt roll-back as market conditions improved. Managing director of SMB integrator Nexus, Sean Murphy, was adamant business opportunity would only keep rising. The company is preparing for an uptick in early 2010 and proactively reconfirming certifi cations and skill sets.

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