The study conducted on behalf of the Technology Channels Alliance (TCA), said the IT distribution was worth €69 billion 2015/2016 in the eight biggest European economies. US-based giants have a 35 percent share across these markets.
TCA chief executive Robert Norum said that the findings pour cold water on expectations given recent market consolidation and the perception that distribution is becoming a global game.
He said that 60 to 65 percent of all distribution is actually carried out by local and regional players which would concern the big three who think they have everything sewn up when the market is a lot more fragmented than most people would think.
Total European IT and CE distribution revenues across the eight markets rose two per cent to €69bn in 2015/16, with growth driven by mobility, printing, and the IT value segment, the study found.
That figure accounts for 37 percent of end-user spending of €189bn in those countries, or 42 percent when reseller margins are factored in, which would mean that over two-fifths of IT and CE revenue travels through the two-tier channel in Europe.
The percentage share of the end-user market intermediated by distributors in the UK leapt from 40 to 43 percent year-on-year last year, the research found, thanks in part to Apple’s decision to shift some sales to distribution here.
The percentage shares for Italy, Spain and Switzerland also rose, from 48 to 49 percent, 47 to 48 percent and 42 to 44 percent, respectively.
Wholesalers’ share for desktops and notebooks, for instance, rose from 57 to 59 percent and 65 to 69 percent, respectively. This was attributed partly to Lenovo, and potentially also Dell, shifting more sales to a two-tier model.
Bain said that the channels help in the new key technology drivers – cyber-security, hyperconverged infrastructure and the Internet of Things (IoT).
“Vendors need help working out how to get these products to market, and resellers need help working out how to sell them. Distribution is less of a box-shifter model and more of a value-add one.”
Distributors’ profitability, however, is on the decrease, the research found, with the average margin of a ‘traditional’ broad liner getting just one percent and the value player getting three-to-four percent.