Background and challenge
A leading private equity firm was considering an investment in a channel partner and regional reseller of IT products and services for enterprise customers.
The client engaged L.E.K. Consulting to evaluate the long-term growth prospects for the technology solutions reseller market and the strength of the target company’s competitive positioning.
Approach and recommendations
We first conducted an interview campaign with customers and industry experts to understand the core market trends in technology solutions reselling. We subsequently developed a technology assessment of key growth drivers across industry segments (e.g., security, big data, cloud computing), from which we determined several critical growth drivers, including IT spend, IT department size, security needs and data volume. Based on this research and analysis, we calculated an estimate for the size of the technology solutions reseller market.
Additionally, we surveyed customers to provide insight into the purchase process, channel preferences and key purchase criteria. Our customer survey enabled us to identify attractive growth opportunities in customer segments such as healthcare, financial services and retail.
Finally, we evaluated the competitive landscape by developing a high-level competitive benchmark across several metrics, including product offerings, technical performance and customer support. We determined that the channel partner/regional reseller was well positioned in the market due to the following characteristics:
- Robust product and service offerings
- High engineering competency and post-sale support services
- A focus on integrating emerging technologies into its portfolio
- A strong industry track record
Due to our market assessment, the client gained a deep understanding of the dynamics in the technology solutions reseller market and was confident in making an informed go/no-go decision on the investment.