Vital Signs: A Midyear Channel Review

Halfway through 2010, channel pros say business is picking up. They’re just not sure how long that will last.

By Rich Freeman

So far, so good. That’s the word on 2010 from Brett Beveridge, CEO and president of Symbits Inc., a managed service provider in Miami. Compared with 2009, he reports, things are looking up. Once-silent phones are ringing again, the sales pipeline is full, and revenues are climbing. “We’re pleased,” Beveridge says.

Still, it’s not exactly business as usual yet. Recession-weary customers are taking longer than usual to green-light purchases, so deals that Beveridge expects to close quickly often linger instead. “When they really get down to the bottom line, I think some people hesitate because of what they’ve seen over the last year or two,” he explains. While the future looks brighter, Beveridge isn’t getting carried away just yet. “We’re cautiously optimistic,” he says.

Same goes for Michael Cocanower, president of itSynergy, a technology consulting firm and MSP in Phoenix. “The first quarter of this year was great, almost to the point of record-setting great,” he exclaims. But Cocanower still isn’t convinced the good times are here to stay. “Something in my gut says don’t go out and make a bunch of capital expenditures yet,” he says.

He’s not the only one in a wary mood. With the first half of 2010 now in the books, many shell-shocked channel pros find themselves encouraged by signs of an emerging recovery but worried that it won’t last. Market conditions were so bad for so long, they observe. Could the worst really be behind us at last?

GOOD NEWS, BAD NEWS
A look at the latest economic numbers suggests it may be too soon to tell. To be sure, U.S. GDP rose by a vigorous 3.2 percent in the first quarter of 2010, and business investment (excluding money spent on warehouses and office buildings) expanded at a zippy annualized rate of 13.4 percent, adjusted for inflation.

Yet unemployment remains painfully high, and the housing market continues to fester. What’s more, U.S. foreclosure filings were 16 percent higher in the first quarter of 2010 than in the same period a year earlier, according to RealtyTrac Inc., and a stunning 23.3 percent of U.S. mortgage holders owed more than their homes were worth as of April, according to Zillow.com. Many experts question whether the economy’s fragile rebound can endure such deep consumer misery.

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