The weakened rand:dollar exchange rate can place some channel partners in a difficult position, although they should pull through in the long run.
This is according to Ron Keschner, MD of financing house Channel Capital, who says: "There is no question that the channel is under pressure" from a general decrease in consumer spending.
"The rand pressure cuts both ways though. You have to be a magician to get it right."
He explains that vendors who did their planning when the rand was strong, and bought large quantities of stock at the time, now have great margins and sales opportunities to work with.
On the other hand, those without stock, who have been forced to buy on the back of a weakened rand, could be finding themselves in hot water.
"You could get caught due to no fault of your own," says Keschner. "You can be planning immaculately and then a politician says something controversial and you're in trouble."
Before Wednesday's budget speech, the rand was trading at R7.64 to the dollar. This fell to R7.90 after the finance minister's address, stopping just short of breaking the R8 barrier. The following day it recovered to R7.75, and was at R7.79 this morning.
However, Keschner's expectations for the channel in the long-term are "carefully optimistic".
Business as usual
"IT is essential to the operation of a company. People understand that they have to invest in it.
"In the last couple of years, the South African IT sector has been very successful on a world front, so targets will stay in place."
Keschner says, while companies are certainly feeling a "cash squeeze", and debtors days are "creeping up", the IT sector is essentially a resilient one and will pull though.
"South Africans are used to ups and down so I am quietly optimistic. For example, two weeks after the crisis with Eskom power cuts, people had their heads down and were working again."
In addition, he says government's massive spending on IT should be a boost for the sector as a whole, helping the channel to survive the current rough patch.
(Additional reporting by Iain Scott.)
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