Volume 4, Number 34 -- September 20, 2007

Reseller Channel Sales Growth Slows in Q2, Says IDC Survey

Published: September 20, 2007

by Timothy Prickett Morgan

The IT analysts at IDC take the pulse of the reseller channel every quarter, and the even before all of the shenanigans with the subprime mortgage market surfaced in the third quarter, giving everyone the jitters, channel partners who push PCs, servers, storage, software, and other IT gear were saying that growth was starting to slow in Q2.

According to the survey results, which are the result of questioning over 500 channel partners each quarter in North America, the number of IT resellers who reported that business was growing was down and the number of resellers who said that their sales were actually in decline compared to the second quarter of 2006 rose. The IDC Channel Panel survey is relatively new, having only been started, but on the server front, the number of partners who said their sales were up fell to the lowest percentage in the past four quarters.

Some 36 percent of resellers of servers made by Hewlett-Packard said that sales were up, and 36 percent of Sun Microsystems server resellers also reported increased business. IDC said that Dell had the sharpest decline in partners seeing an increase in sales--not surprising, given that Dell has been trying to pump up sales with its direct sales force and is not big in the channel anyway--and the IBM server channel had the highest number of partners reporting a decrease in server business. (How much, IDC won't say unless you fork out big bucks for IDC's Channel Panel 2Q07 Update report.)

Amazingly, on the storage front, 53 percent of Sun's partners said sales were up in the Channel Panel survey, but Sun's reported sales for storage in the same period were actually down by 10.4 percent to $639 million. (Go figure. Maybe Sun is letting its storage resellers keep more of the loot? Seems unlikely, knowing IT vendors. . . .) Network Appliance and Hitachi disk array resellers apparently did good in the quarter, too.

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Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik,
Shannon O'Donnell, Timothy Prickett Morgan
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