Q1 the worst ever for VARs

April 20, 2009 – The channel bid adieu to the first quarter of this year with a collective “good riddance.” That’s one takeaway from a recent survey of 51 IT resellers conducted by Robert W. Baird & Co.

How bad was it? In terms of expected revenues vs. actual revenues, 60% of the VARs were below plan, 26% were on plan, and only 14% were above plan. That’s the worst quarter since RW Baird began its quarterly server/storage VAR surveys in Q3 2004. In fact, it was almost twice as bad as the previous worst quarters (Q2 2006 and Q1 2008, when about 32% of the resellers were below plan).

Once again, storage was cited as the strongest IT sector by resellers, with virtualization and data de-duplication cited as the hottest technologies.

It’s tough to predict how VARs will fare in the second quarter. About 43% of the survey respondents expect the market to remain about the same, while 30% are more negative and 16% are more positive (and 11% say it’s too early to tell). On the positive side, many VARs said that, although many purchases were delayed from Q1 to Q2, relatively few purchases were cancelled.

When asked which vendors’ products they expect to sell more of in the next 12 months, VARs cited VMware, NetApp, Data Domain and Cisco as the top four performers, with CommVault and LeftHand rounding out the top six.

When asked about specific vendors in the short term (“How do you perceive the following storage vendors in the next 3 to 6 months?”), Data Domain, NetApp and EMC topped the list, with LeftHand moving into the fourth position from seventh in the previous quarter. (LeftHand was also ranked the most channel friendly vendor, slightly above NetApp.)

Sun ranked consistently low in the survey, and it will be interesting to see how the channel reacts to the Oracle-Sun announcement. I”ll blog about that news as soon as I get done scratching my head.