Canalys Takes a Deep Dive into the Crystal Ball for EMEA Channel

TL;DR: At the Canalys Forum EMEA 2024 in Berlin, analysts predicted massive channel growth driven by AI integration. Around 1,000 partners, distributors, and vendors discussed the transformation of IT distribution.

Approximately 1,000 partners, distributors, and vendors from across EMEA answered Canalys’ invitation to Berlin. There, the research firm’s analysts made several bold predictions, at times venturing well beyond conventional outlooks.

As its name suggests, Canalys – founded in 1998 – specializes in channel market research. From October 8 to 10, the Canalys Forum EMEA 2024 took place in Berlin. The North America forum will follow on October 22 in Miami, and the APAC event will be held in early December on Bali.

In Berlin, the company delivered not only “hard facts” but also several daring forecasts, according to ChannelPartner. The roughly 1,000 delegates from the EMEA region were all ears. Many attended the numerous presentations, panel discussions, and sessions hosted by the Singapore-based analyst firm.

Predictions About Predictions

Who will occupy the White House soon, Canalys Vice President Rachel Lashford wouldn’t – or couldn’t – say. But at the EMEA Forum in Berlin, she made several bold forecasts for the next three years, including the following:

• Global IT spending will reach 6.3 trillion US dollars.

• More than 20,000 humanoid robots will soon join the global workforce.

• Intel will spin off its own chip manufacturing and focus entirely on design.

• The biotech industry will become the largest growth driver, overtaking the IT sector.

• Hyperscalers such as AWS will soon deploy more than half of all GPUs.

• The anticipated crypto boom failing to materialize will propel cloud service providers offering GPU-as-a-Service into the top five.

• As overall power demand rises, EU regulators will cap data center energy consumption at five percent.

Others, like Chief Analyst Alastair Edwards, highlighted less positive trends in the European channel. According to him, it’s not just German IT service providers and system integrators that are struggling – the entire EMEA region is affected. Revenues are expected to decline by around one percent, while distributor (IT wholesaler) revenues could drop by as much as four percent. “This is the worst performance in years,” ChannelPartner quoted chief analyst Edwards. Still, he sees signs of recovery emerging in the second quarter of 2024. In areas such as IT infrastructure, software, and cybersecurity, he anticipates revenue growth of approximately four percent, with distribution expected to reflect a three percent increase.

Only Tech Giants Benefit from the AI Boom

Regarding the AI boom, Canalys co-founder Steve Brazier said that large technology corporations are the primary beneficiaries. “The channel gets only a small piece of the pie,” he noted. Half of the billions being invested are going to Nvidia alone. However, he advises channel participants against abandoning AI efforts altogether: “Anyone who isn’t using AI today should probably start thinking about retirement,” Brazier stated.

Overall, he sees the industry at a turning point and asserts, “The hardware market is no longer growing.” Those days are over, even though replacement business will continue, according to him. He sees the greatest opportunities for IT service providers and resellers in cybersecurity.

Brazier finds Europe’s aging population concerning, as it could negatively impact economic growth. “Northern Europe has basically become a world museum,” he said bluntly. Immigration could help reignite growth, but given the current political climate, it remains a challenging topic.

Header Image Source: AdobeStock

Frequently Asked Questions