Spiceworks Ziff Davis: Pandemic Not Slowing Tech 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

“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:

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:

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 …

… buying similar goods when it comes to buying software, hardware and services, Tsai said.

“To compete in this environment, MSPs, VARs and online retailers need to understand what buyers want most from a partner, and which factors differentiate one purchase channel from another,” he said. “For example, while the best pricing and overall value – where manufacturers and online retailers excel – are the top factors influencing where companies buy technology, other very important considerations include the ability to offer long-term business relationships, access to technical expertise, end-to-end support and trusted advice.”

Supporting Customers

Many channel companies’ potential customers are busier supporting remote users, Tsai said. As a result, they’re harder to reach than before.

“It’s very important for channel companies to approach customers in a more human way — listening to their problems carefully and offering solutions that fit their needs,” he said. “Using a more personalized approach, channel companies catch buyers’ attention by tailoring outreach to address unique pain points.

During the COVID-19 crisis, relationships matter, Tsai said. With the entire business world going through the same challenge, there’s the opportunity to foster genuine connections.

“Even if customers aren’t ready for a solution now, investing in building relationships now can lead to future business opportunities,” he said. “According to our survey, 64% of IT buyers said their experience with providers is highly dependent on who they have as an account representative. And 72% said positive word of mouth is very important when selecting an MSP to serve their organization’s needs.”