With the start of Q4—the strongest quarter of the year—the IT channel is turning its attention to the run-up to Christmas. However, our September webinars reflected on highlights from August, which is often a slow period for European markets as many workers head off on holiday. As always, your best source of regular market insight is CONTEXT’s weekly webinar briefings, where we share key data and trends to support data-driven decision-making.

Among this month’s highlights are positive news for resellers, a strong Q3 in the UK, rising cybersecurity sales, and a notable drop in warranty sales. Here’s our pick of the top stories in more detail:

Reseller Count Dips in August, but Overall Picture is Positive

Reseller activity across the main European markets saw a downturn in August. The number of active resellers purchasing from distributors dropped by 9% on average year-on-year (YoY) across Italy, Spain, France, and the UK—with Italy experiencing a -12% decline. However, the overall health of resellers remains positive, with YoY spending up in all countries and average revenue per reseller rising in France and the UK, likely due to a reduction in reseller numbers overall. UK resellers are notably ahead, with average revenue reaching €130,000 per business, compared to less than €60,000 in second-placed France.

UK Drives Strong Cybersecurity Performance Year-to-Date

After a slow start to the year, the Channel's cybersecurity sales have begun to pick up, driven by ransomware-as-a-service and supply chain threats impacting critical infrastructure firms. The latest CONTEXT figures show 3.6% revenue growth year-to-date (YTD) across the region as of approximately week 36. This growth is largely driven by positive performance in the UK, although all markets are trending upward, with the exception of Germany, as Q3 comes to a close. SaaS sales have risen by 6%, and MSP sales are up 2% YoY, although this is down from double-digit increases seen earlier in the year.

Warranties Decline as Gap Between Computing and Server Warranties Grows

Week 35 saw significant declines in revenue growth for the warranty market, covering standalone warranty extensions, warranty upgrades, and post-warranty packages for PC/server repairs. The YoY revenue drop was particularly sharp in France (-41%), the UK (-34%), and Germany (-31%). However, computing warranties outperformed server warranties. This could be due to an increase in home working, growing consumer confidence, and the technical complexity of modern PCs, which makes warranties a safer option than troubleshooting. Meanwhile, the growth in cloud computing has reduced the need for organisations to maintain on-premises servers, with many also consolidating data centres to cut costs.

UK Enjoys a Stellar July and August Thanks to Strong SMR Sales

Bolstered by 0.6% GDP growth in Q2, a new government, and falling interest rates and inflation, the UK channel has performed well. Distribution revenue rose by 7.5% quarter-to-date to the end of August, compared to 1.4% in Germany, 1.2% in Italy, -5% in France, and -5.1% in Spain. However, this growth follows favourable comparisons due to the -12.5% decline in the UK’s Q3 growth in 2023. Security and data management software, servers, and storage sales all performed strongly as smaller companies invested more in digital transformation.

In the meantime, stay informed on the latest IT channel trends and market intelligence insights by registering to join CONTEXT’s weekly IT Industry Forum webinar below: