IDC Identifies Major Disconnect Between Customer IT Financing Requirements and Channel Partner Capabilities

As IT channel providers search for opportunities amid volatile credit and capital markets, the gap between customer IT financing requirements and channel partner capabilities continues to widen. According to new research from IDC, success for channel providers (with $1 to $50 million in annual revenue) hinges on their ability to understand both the overall financial health of the channel as well as the availability of customer leasing and financing, inventory and receivables financing, and operationally oriented financial instruments, such as revolving lines of commercial credit and other business investment funding options.

A recent IDC survey of 43 U.S.-based channel partners with an average of 1,000 employees completed during February 2009 produced a series of research findings that both reinforced preconceived notions of how market volatility affects channel providers as well as research findings that surprised IDC's analysts.

--64% of large channel providers participating in the study reported that their customers have more interest in IT financing and leasing programs than 6 months ago. At the same time, an astonishing 40% of these same channel providers reported that they do not anticipate the need to introduce and educate their customers on the benefits of leasing and financing as a ways to procure needed IT resources

--11% of channel partners surveyed reported that they do not have access to capital to continue "business as usual." When the findings are segmented to examine different sized resellers, nearly 20% of resellers with annual revenues less than $5 million reported they had inadequate access to capital

--Quantifying the whipsaw effect volatile credit markets have had on IT leasing and financing sales programs (which were readily availability 18 months ago), nearly half of channel providers reported having more trouble getting customers financed in the current environment. This percentage rises to 73% among small partners.

More information on the service and support industry can be found at www.supportindustry.com