Distributors report record January sales
- 14 February, 2007 17:23
Several distributors have rewritten the record books with higher than expected sales in the first month of the year.
January is traditionally considered the quietest month as corporate customers make their way back into the office. However, many suppliers say hardware orders were piling up the moment staff returned to their desks.
Dicker Data sales manager, Chris Price, said it had experienced 70 per cent growth compared with the same month last year. About half of the distributor's business is in the corporate sector.
"A lot of vendors have been aggressive in terms of pricing and deals," he said. "They're trying to get their numbers up. Vista has also had an impact. There are lots of XP Pro systems being sold cheaply as vendors try to clear models in preparation for desktops with Vista as standard. "We've seen very strong desktop and notebook sales because of this aggressiveness." Another factor improving Dicker's figures was the launch of several new reseller services. One of these was its enhanced configuration centre, which came online in early December. While about 5 per cent of desktops had been shipped with configuration previously, Price said it was now closer to 30 per cent. To meet demand, Dicker has hired additional configuration staff. Price said the education sector was also on a spending spree. Products from HP made up the lion's share. While the January spike was unusual, Price said Dicker's December sales had also been up.
"We have had a steady ramp up in business over the past six months. We forecast downwards for December, but I think we had the right inventory at the right time," he said.
Express Data also experienced a significantly stronger January compared to last year. Managing director, Ross Cochrane, said the growth was a sign of an optimistic market.
"There have been a lot of positive reseller results on the stock market. In the business world, people are recognising that to continue growth they have to remain competitive and drive better services to their customers while getting more from staff," he said. "This is seeing them invest heavily in IT."
Like Price, Cochrane said the widely anticipated launch of Microsoft's Windows Vista operating system and Office 2007 software was fuelling excitement around its new technologies.
"This is encouraging people to look at their infrastructure and consider taking the next step," he said. "Enterprise doesn't leap straight away - there's a lot of testing applications for compatibility. But the commercial and mid-tier moves quicker. All it takes is a few machines for people to see the benefits. The next thing you know, it will be the norm."
Strong technology growth areas for ED include security, availability and IP telephony. Cochrane used Cisco's 27 per cent year-on-year growth in Q2 as a reflection of the strong IT climate.
Page BreakFor Ingram Micro and LAN Systems, sales were up across the board.
Ingram's solutions director, John Walters, said a standout area was consumer via retail, which got a boost from the launch of Windows Vista and Office 2007. The distributor also chalked up higher storage and server sales in the enterprise market.
"We have had a very strong January - certainly stronger than anticipated," he said.
LAN Systems national sales manager, Leigh Howard, said its year-on-year growth for January was 34 per cent. This was several points higher than its annual growth rate.
"A lot of our vendors finish the year in December, so we take a lot of orders then. These flowed on into January, which also gave us a good start and momentum into the year," he said. "Our last quarter of the year (December to February) is typically a challenging one, so 34 per cent growth in January is spectacular." Sales were up in all categories, with switching and security vendors making the most gains, Howard said.
ED's Cochrane claimed the above average January sales were a promising indicator for the year ahead. His optimism was shared by LAN's Howard but Dicker's Price said it was difficult to judge how the year would pan out. "It's pretty unpredictable - there's plenty of new technology out there. It depends on whether the market jumps on-board or if everyone sits back to see what happens," he said. "For example, there are new processors out from Intel. Most people wait for the first bus jump before they buy, and the chip becomes the sweet spot. This hasn't impacted dual-core processors yet."
Price claimed sales would also steady over the next few months as corporates weighed up the advantages of upgrading to Vista. He expected the OS wouldn't take off until the launch of the first service pack mid-year.
"Realistically, resellers want XP Pro now but want Vista to be an upgrade option," he said. "Most vendors are offering customers the ability to move to the new operating system for about the price of postage and handling. What happens when that offer stops will be the true test of how many people jump to Vista."