The UK ICT distribution channel is increasingly focusing on the SMBs as this market segment gains importance. As a proof, two-thirds of the channel players orient their sales towards this category of companies. The channel is becoming more and more retail-oriented, as small companies often obtain IT products through mass distribution.

25% of the channel's main players account for about 80% of total turnover. Due to severe declines in profit margins, the number of channel players has fallen by 25% in the past few years, but now it has reached a certain degree of stability.

The revenue split by activity indicates that the main channel engine is the services sector as it represents 61% of all channel revenues. The channel is populated by more and more software specialists; online-only channel companies account for about 5% of the channel.

Representing 19% of the total EU ICT market, the UK market is the second largest in Europe, within 1% of the top position. Today's British ICT market looks better than any other European countries' and accounts for one-fifth of its total inward foreign investments.

The UK has become the first European destination in terms for software and services companies, as it is home for more than 100,000 software specialists. In fact, more software companies are created in the UK than anywhere else in Europe.

London and its surroundings are considered the pole of knowledge-driven headquarters. The capital city has the highest concentration of telecommunication and services and computer equipment companies of any European capital. Its cultural background makes it the number one destination of North American ICT businesses in Europe. Moreover, U.S. suppliers are increasingly price competitive, mainly due to the U.S. economic recession and the continuous weakening of the USD. Outsourcing services (5% of growth forecasted for 2008) and telecommunications advances represent the two key growth factors in the near future. Many British companies have sent their services overseas, providing lower costs and higher profits. India seems to be the preferred destination by far due to its low-cost workforce with high qualifications. The UK is also a leading hardware market, covering computer hardware and peripherals as well as other communications equipment and infrastructure. PCs and laptops are enjoying a boom as in every European market, strongly relying on a positive economic growth and consumer spending. This market is expected to pursue its growth in the current year (with 3.6% of forecasted growth).

Software and computer services was the fastest growing segment of industry in 2007 and continues the trend in 2008 with a 4.4% increase. Britain is particularly strong in the areas of e-technologies, parallel computing, artificial intelligence, virtual reality and multimedia software products. Additionally, with the continuous increase of security products and product ranges in the market, UK controls 20% of the global market for IT security products.
Together with digital services, the consumer market is also well-known for its leisure software. UK is the third-largest global market accounting for up to one-third of global games software sales, and continues to increase over 20% each year. This market is estimated at 1.7 billion EUR per year. The software market is sustained by public sector's engagement and the UK Government is investing heavily in this area. In addition, government policies and low taxes boost the demand in the ICT sector.

compuBase definition by main activity compuBase coverage (2008) Manufacturer Software publisher Publisher of software for a specific activity Publisher of software for a specific business processI Software solutions integrator (developed by third parties) IT services, software development (hosting, training, etc.) Telecom services (Telecom operator, ISP, etc.) Telecom & network infrastructure integrator IT infrastructure integrator Consulting IT infrastructure integrator Reselling to consumers Reselling to businesses (hardware, software, services, etc.) Wholesaler (resale of IT products to resellers) Large assembling company Other ICT related activities 1,062 759 530 246 265 6,327 398 489 148 538 3,009 1,794 472 12 426 - Statistics on UK - compuBase online counting tool - Quotation on the UK database

Distribution players:
INGRAM MICRO UK LTD -HQ; WESTCOAST LTD UK; RS COMPONENTS LTD; SPICERS LTD UK;
MICRO PERIPHERALS LTD UK
IT Channel Press & Players:
Computer Weekly (REED BUSINESS INFORMATION); European Reseller Magazine; CRN (VNU); Microscope (REED BUSINESS INFORMATION)
Public organisations & Useful Associations:
Intellect - the Information Technology; Telecommunications and Electronics Association; International Capital Market Association; Internet Service Providers Association; Direct Marketing Association UK; Worshipful Company of Information Technologists; British Interactive Media
Association (BIMA)

General Data
• Area: 244,820 km2
• Population: 60.8 million
• Population growth rate: 0.275%

Macroeconomic Data
• GDP/capita (2007): 27,035€ (89% vs US)
• GDP growth: 2.9%
• HDI (2005): 0.946

OECD: United Kingdom information
OECD: ICT Statistics
CIA: United Kingdom information

Please click here to become a partner of compuBase.

Contact one of our consultants
Ask for the 2008 EMEA Observatory on IT & Telecom Distribution