Canalys: Outlook for European Channel Partners Is Bleak

CANALYS CHANNELS FORUM EMEA — The outlook for European partners is bleak compared to the rest of the world.

That message from the Canalys Channels Forum EMEA Wednesday in Berlin was “somewhat depressing,” according to one distributor. Canalys is owned by Channel Futures’ parent company, Informa.

“It’s been a bit as a tough year. Many of your revenues are declining, not growing,” said Steve Brazier, former Canalys CEO and co-founder of Canapii.

He maintained that European partners are missing out on opportunities compared to their US counterparts.

“We have seen a real dichotomy over the last post pandemic years, between how the U.S.-based partners have performed and the European-based partners have performed," said Brazier. “We’re in an aging society. Our economies are developing slowly. One of the biggest differences between the U.S. economy and the European economy is the U.S. has more immigration."

The answer? Now would be a really good time for a major U.S. partner to acquire a major European partner. Additionally, European partners need to get exposure to the U.S., he said.

“Computacenter has done [that] very successfully over the last three or four years. But Computacenter hasn’t seen a benefit in share price because it’s listed in London. So the second thought might be, get your listing and move to the U.S. and become an American company.”

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CrowdStrike Incident Presented Partners with Opportunities

Brazier pointed to other shifts in the IT channel landscape.

He noted that hardware sales, with the exception of cybersecurity, are flatlining. Elsewhere, the hundreds of billions of dollars that the hyperscalers are investing in AI startups creates little value for either end users or channel partners. There have also been significant challenges around sustainability and a slowdown in DE&I initiatives.

There is one glimpse, however, of optimism, said Brazier.

“Cybersecurity is a gift that keeps on giving,” he said.

“I would like to thank CrowdStrike for creating so many new opportunities for the channel. I hope you’re all visiting your customers and talking to them about disaster recovery. Everyone got a wake-up call, and there are all sorts of lessons we’ve learned about disaster recovery,” he said.

However, Brazier maintained that “the real culprit” is Microsoft.

“How could it be in 2024 the only way to reboot a PC that’s crashed is for a human being to go and type the unique BitLocker code into the PC? Why do we not have enterprise-wide centralized reboot and refresh systems, where the CSO, the CTO and the CEO all have multifactor authentication? It’s unbelievable, and Microsoft got away with the fact that ‘perhaps I made the mistake.’ But Microsoft made it so hard to recover, you need to go and tell that story to your customers and understand what’s going to happen if something like that happens again.”

He said the CrowdStrike incident will likely drive some customers to move away from being 100% on Windows, and there is an opportunity for Apple and Google to diversify. Similarly, Brazier said it’s “a mistake to be 100% of a single public cloud.”