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Spiceworks Ziff Davis: Pandemic Not Slowing Tech Spending

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Increased spending

Despite economic uncertainty, businesses plan to continue spending on technology to support a remote workforce, according to Spiceworks Ziff Davis.

Spiceworks Ziff Davis surveyed nearly 500 IT professionals who make IT buying decisions within their organizations. Respondents represent organizations in North America and Europe across a variety of company sizes. They also represent a range of industries, including education, health care, nonprofits, government, finance, retail, construction, manufacturing and IT services.

Peter Tsai is senior technology analyst at Spiceworks Ziff Davis. He said many channel companies are upbeat about the future.

Spiceworks Ziff Davis' Peter Tsai

Spiceworks Ziff Davis’ Peter Tsai

“In fact, 63% of surveyed MSPs expect their revenues to increase over the next two years,” he said. “On the buyer side, 80% of businesses will maintain or grow IT spending in 2021. Additionally, 14% of businesses plan to increase spending with MSPs and 16% plan to increase spending with VARs within the next two years.”

Sixty percent said buying from VARs and MSPs can make life easier for IT departments.

Key Takeaways

Key findings from the survey include:

  • Pricing and overall value are the top factors influencing where buyers choose to buy technology. That’s above many other considerations.
  • Eighty-two percent of buyers purchase technology directly from a manufacturer. That makes it the most commonly used purchase channel. On the other end of the spectrum, only 24% buy anything from physical stores.
  • Businesses use distinct and differentiated channels to purchase various types of IT products, especially with cloud services.

VARs have evolved their business models over time, according to Spiceworks Ziff Davis. They’re moving toward becoming a one-stop shop to help B2B buyers cut through complexity. They do so by offering simplified billing and a single point of contact for products and services offered by various tech brands.

And the appeal of consolidating IT vendors is clear. Two in three (63%) respondents said their business prefers to reduce the number of vendors and channels they buy technology through. While most SMBs buy technology from 10 or fewer vendors, most enterprises buy from 16 or more.

“As organizations increasingly shift to supporting a remote workforce, IT complexity will continue to grow,” Tsai said. “With the majority of organizations trying to reduce the number of vendors they work with, there’s opportunity for vendors that already have a foot in the door. Channel companies with existing relationships have already earned their customers’ trust, and have the first shot at reaching out about additional solutions and services – such as post-purchase integration and support – which can make life easier for businesses adjusting to the new remote work reality.”

Well-positioned channel players will already understand customers’ needs and make solving problems simple for busy buyers grappling with new challenges, he said.

Purchase Patterns

Businesses IT purchase patterns vary according to product type:

  • The majority of businesses buy hardware through online retailers and direct from the manufacturer, and slightly less often through VARs.
  • Most businesses buy software directly from the manufacturer and from online retailers. And they commonly go through VARs, too.
  • Cloud services are overwhelmingly purchased directly, but they are also resold through other channels less frequently.
  • Managed services are most often purchased when offered or resold through MSPs. But many businesses also buy them directly from a provider or through a VAR.

Businesses based in Europe are more likely to buy tech from VARs than from North America businesses. They’re also less likely to buy directly from online retailers and physical stores.

IT buyers have many options for …

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