How is tech spend in Europe evolving as lockdowns ease? What our data tells us

Antony Young, Commercial Director at IQBlade, analyses how real-time sales data is allowing us to see which vertical sectors are emerging the fastest as Covid-19 lockdown restrictions ease across Europe and furloughed businesses reopen.

Using data to make an impact

In my last blog, I looked at the fact that while most organisations have access to masses of data, utilising it to drive strategy and create value is most important… and most challenging.

At IQBlade, we are using sales data to ensure that we focus support where it is needed the most during the pandemic. However, as the region emerges from lockdown, such data also indicates where opportunities exist and provides actionable insights on which sectors are emerging fastest and where is investment being made. We can also see which partners are well placed to take advantage of the trends and which need support to transition.

I believe that using tech spend data, in real-time, is as relevant – if not more so – than trying to plan strategy around high level economic data provided by government statistics agencies.

What our real-time, real-life data is telling us about current market trends

Our data science team in Prague has been analysing Tech Data sales data to identify how Covid-19 has affected business sectors and product categories. The team has done this initial piece of work for Belgium, France, Germany, Italy, Netherlands, Spain, and the UK.

Using the countries’ data, we were able to review the share of tech spend across the top sectors, then compare it to the 12-month period pre-Covid-19. The changing trend is really interesting.

Tech Data Europe sales data, share of spend by vertical in Europe – extracted 11^th June 2020

The two headlines are that retail has recovered its falling share and is currently outperforming it’s average for most of 2019 and the finance sector has settled back into it’s usual place at 5^th in the table after its rise in the midst of the lockdown.  

Construction is the surprising performer this time around, almost doubling it’s share from April and outperforming its averages in 2019 significantly.

The share growth of Government is still slightly above last year’s average, but is perhaps starting to return to normal. Other sectors seem to have settled back to pre-pandemic levels.

Reviewing the data country-by-country reflects how different companies are easing lockdown and gearing up for their own version of “new normal”:

• In Spain, finance was the hot sector in April, leaping from just 3.36%, to over 14% share. It has now settled back to 5^th in the table at 4.54%. The big climber now is construction, which has knocked retail off the top spot and is over 28% of spend compared to only 5% pre Covid-19. Retail’s share hasn’t moved at all since my last blog and is still significantly less than it was in 2019.
• In France, the communications sector has continued it’s decline in share of spend but the big growths sector is construction, which for the last few weeks accounts for 10% of spend.
• In Belgium, my last Blog described how the retail share of spend was already bouncing back and that trend has continued with retail and services now accounting for 50% of the market. Most other sectors also appear to be back to where they were in terms of share of spend.
• In Germany, tech into the technology sector (XSPs, ISVs, etc) is still strong, going from a little over 10% to 16% in April and just under 19% in the last two weeks. Retail is almost back to the 2019 average but it’s the transportation sector – perhaps unsurprisingly – that is significantly down, at almost half its 2019 share.
• In Italy too, the retail sector is starting to regain it’s share and has recovered half of the drop that it experienced during the pandemic. It still has some way to go to return to 2019 levels though. The healthcare share of spend is still strong at 5.29%.
• In the Netherlands, retail’s share didn’t fall as sharply as in other countries during the pandemic but in recent weeks it’s gone above 40% of the market. Healthcare has always been the second highest share here, but it’s taken almost 5% more share since the pandemic started and looks like a good sector for vendors and partners to focus on.
• In the UK, the retail share of spend was strong when I wrote the last blog and that remains the case. It’s still above the 2019 average at around 18%. The technology sector is also back to 2019 levels and it’s the finance sector share that continues to decline, at roughly half what it was last year.

While there are other indicators on what is happening in the market, share of spend is important for vendors and partners who are considering where to focus sales and marketing efforts. The team at IQBlade is keen to assist with this analysis in order to help channel partners target the right areas for market demand and business growth.

In my next blog I’ll focus on product category performance and review some of the share trends from that data.

About IQBlade

IQBlade is the data science practice within Tech Data in Europe. Our real-time, real-life sales data and advanced analytics platform enable vendors and channel partners to make smarter, more agile sales and marketing plans based on meaningful, value-added market insights. For more information, please contact us at sales@iqblade.com.