technology
reseller.co.uk
NEWS : TRENDS
5
Saving for a rainy day
Small and medium-sized enterprises (SMEs) in the IT and communications sector are top of the table
when it comes to saving money, with an average business savings balance of £843,000. Research by
Hampshire Trust Bank shows that the ICT sector is also the only one to have increased its savings
balances (by 5%) since the run up to the EU Referendum. Overall, the national average for business
savings is £446,000, a 20% drop from last year’s figure of £556,000.
Sector
2017 business
savings account
(% of total funds)
% change from 2016* 2017 current account
IT & communications
£843,000 (53%)
5% (2016: £804,000)
£760,000
Accountancy
£667,000 (64%)
-39% (2016: £1,085,000)
£369,000
Financial services
£555,000 (50%)
-19% (2016: £687,000)
£558,000
Architect
£533,000 (59%)
-25% (2016: £708,000)
£363,000
Manufacturing &
engineering
£444,000 (49%)
-18% (2016: £543,000)
£458,000
Health and medical
£421,000 (47%)
-16% (2016: £504,000)
£466,000
Legal
£317,000 (38%)
-10% (2016: £354,000)
£508,000
Retail
£289,000 (74%)
-31% (2016: £418,000)
£102,000
Construction & building £264,000 (48%)
-17% (2016: £319,000)
£289,000
Charities
£155,000 (52%)
-69% (2016: £497,000)
£145,000
AVERAGE
£446,000 (52%)
-20% (2016: £556,000)
£409,000
Smart device owners keen to automate further
Almost one in three consumers has
installed at least one smart home device,
according to a study of 4,000 consumers
in France, Germany, UK and USA by
Futuresource Consulting.
Analyst Filipe Oliveira points out that
once consumers have installed one device
they are likely to want to automate other
areas of their home.
“Across all segments, 30% of consumers
expect to control more of their homes
wirelessly in the near future. However, the
number is substantially higher among
those who already own at least one smart
home device, with 89% of advanced users
expecting to control more of their homes
wirelessly in the next 6 to 12 months,” he
said.
Oliveira added: “Smart lighting and smart
thermostats are among the most popular
smart home devices and are common first
steps into the smart home. However, it is
home security that more respondents report
as the first smart home device that they have
installed. Products that fall under climate
control are growing but our survey revealed
that this is a fragmented category with
relatively low levels of brand recognition.”
Voice Personal Assistant (VPA) speakers
are another important driver of smart home
adoption. The most common application
is music streaming, though a substantial
number of respondents use their VPA
speakers for home automation purposes
such as controlling the heating or the
lighting.
Almost a third of respondents claim to
have received their VPA speaker as a gift,
in some cases bundled with a smart home
device.
ICT industry
growth falters, but
insolvency levels
remain average
The ICT sector is being hampered by
uncertainty (and currency depreciation)
caused by Brexit, with a slowdown
in growth, thin margins and fierce
competition, reports leading trade credit
insurer Atradius.
In its annual
ICT Market Monitor
,
Atradius warns that a slowdown in
household consumption and an increase
in delays to long-term corporate IT projects
will nearly halve growth levels within the
British ICT sector this year, from 4.5% in
2016 to 2.6% in 2017.
With falling demand for hardware
products, the main drivers for growth are
software and data services, including
cloud computing and mobile app
development.
While Atradius reports a good payment
environment, with a low level of protracted
payments and no increase in the number
of non-payments year-on-year, it warns
that market competition will cause
margins, which are already squeezed,
to shrink further. Insolvency levels are
expected to remain ‘average’.
Simon Rockett, Risk Services Manager
for Atradius UK, said: “The traditional ICT
sector in many developed markets is no
longer growing at a rate that cushions
businesses against the impact of rising
costs and falling prices, with the result that
many do not receive the returns they need
from their working capital.
“Currently, the main triggers for
defaults and insolvencies in this sector
are increased price pressure and margin
erosion due to heightened competition
and lack of product differentiation.
With minimal barriers to entry and
new challenges arising, it is a fiercely
competitive environment and businesses
are being forced to compete on price as
they also try to differentiate their offering
to preserve already thin margins.”
He added: “Looking forward, advancing
technologies and changing market
conditions will drive dramatic shifts in
the sector landscape, putting pressure on
distributors to clearly delineate their value
to resellers and vendors. The choice they
face to survive is to go big or go niche.
Sustained and continued margin pressure,
and fierce competition will increase the
probability of failure for those businesses
that are not able to adapt.”
Highly automated companies more likely to experience
revenue growth
Four out of 10 UK organisations have
started using intelligent automation
in one or more business processes,
and 35% expect to require even more
automation by 2018.
In a survey for ServiceNow’s new report,
Today’s State of Work: At the Breaking
Point
, 91% of organisations agreed that
productivity could be improved through
the use of intelligent automation such as
artificial intelligence or machine learning to
streamline decision-making and improve
the speed and accuracy of business
processes.
The report states that highly automated
companies are six time more likely to
experience revenue growth of more than
15% than companies with low levels of
automation. Companies with more than
20% revenue growth are, on average, 61%
automated. Those with flat or negative
growth are only 35% automated.
