Cost pressures lead to reduced IT budgets in 2012

In a survey of 250 Lenovo partners in Canada and the U.S. released in conjunction with the vendor’s third quarter financial results, it appears cost and budgets will be a continuing concern for partners in 2012.

When asked to identify the top IT-related concerns of their customers, 42 per cent of Lenovo partners identified costs and 24 per cent cited reduced budgets. Security was a concern for 10 per cent, while the much-hyped “bring your own device” trend scored just four per cent.

In terms of where Lenovo’s partners do see customers opening their wallets, “computing” topped the list of top business opportunities at 70 per cent, followed by cloud computing at 49 per cent. Rounding-out the top five were disaster recovery/backup and archiving, post-sales service and security. Lenovo said partners are seeing their customers move beyond the tire-kicking stage of cloud computing, looking to the channel to help them realize operational efficiency gains by sourcing quality hardware to run their cloud environments.

On the product side, 64 per cent expect an increase in notebook sales while 30 per cent see sales staying level; just four per cent expect a decrease. On the desktop side 30 per cent are expecting growth, while 41 per cent expect steady she goes and 21 per cent are bracing for a decline.

One key message from partners was the importance of specializing in key verticals said Stefan Bockhop, director of channel sales with Lenovo Canada. Health care, financial services, government and education were identified by Lenovo partners as the verticals with the most potential.

“They’re definitely interested in having vendors helping them with specific verticals where they see opportunity,” said Bockhop. “Partners are looking to invest in vertical opportunities.”

Half of respondents are already participating in the health care market, while 36 per cent have identified it as a growth opportunity for this year. It’s a similar picture in financial services, while about a third of partners were interested in either higher education or government.

“We have a number of levels of support for partners engaging in specific verticals, from supply chain and demand generation top sell through. We can help partners have specific and relevant conversations in these spaces,” said Bockhop.

Assistance available form Lenovo includes collateral materials, help with industry specific concerns such as data security in health care, and even hosting and sponsoring events to get decision-makers in a room with partners.

A strong third quarter

Lenovo also released its financial results for the thirds quarter (ending Dec. 31, 2011) last week, The vendor reported a 54 per cent increase in profit year over year, as well as a 37 per cent increase in PC shipments worldwide.

Bockhop said Lenovo grew in all the regions it participates in, including Canada, and stressed the vendor is investing those gains back into the business and in its channel partners with increased funding for product development, partner support and the recent worldwide branding campaign.

“We’ve reached double-digit share in Canada, with 10 per cent of the overall PC market according to IDC Canada,” said Bockhop. “We’ve reached a historically high share position (in Canada), and we’re starting to make inroads into the consumer marketplace but the bulk of this increase has been in the commercial sector, private and public, with a rich increase in SME sales.”

Follow Jeff Jedras on Twitter: @JeffJedrasCDN.

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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