Will 2014 be the year that cloud computing companies are concentrating on bankruptcy?

Once again, channel dealers have withstood the baptism of a wave of bankruptcies and have maintained a good mentality of being more and more courageous in 2013 – despite the fact that the total collapse in spending in certain technological infrastructure areas remains undeniable.

In the past 12 months, a total of 293 dealers have failed to withstand the grim market test, culminating in a collapse, with 285 bankruptcies in the past year – up 2.8% per cent from a year earlier. Specifically, in the last fourth quarter of 2013, a total of 66 dealers went bankrupt, up from 57 in the third quarter, with data from the Credit data service agency Graydon UK.

It may not be appropriate to make an assertion right now, but the result is a lot better than last month. At that time, the channel distribution giant 2e2 due to debt of up to 412 million pounds, leading to the largest dealer bankruptcy in history.

Alan Norton, the head of Graydon UK intelligence, has expressed recognition of the resilience of local technology suppliers, but has also warned against the current grim situation.

"In 2013, the dealer's bankruptcy rate was flat compared with the previous year, but the potential risk of a further rise in 2014," he told us.

The bloody lesson has shown that corporate bankruptcies are likely to rise as the industry recovers, as is the technology industry, Norton added.

"Even by cutting costs, to avoid borrowing and other means to survive the downturn, many companies simply do not have the capacity or enough money to help their own security transition to a new growth stage and the risks of excessive exchanges," he said, "because bank lending still failed to meet the government's vision of the ideal level, We have reason to suspect that the tragic history of the past will repeat itself.

Laurie Beagle, head of P&a Receivables Company, a credit management professional, said the overall trend of the recession would hit "everyone" and force business operators to rethink operating costs and development strategies.

"Many companies are beginning to look at how they can adjust their direction, what their sources of revenue are and what unprofitable product lines they need to give up," he explains.

Similar to the conclusions of many analysts, Beagle also believes that there will be a new upsurge in corporate bankruptcies within this year, especially if interest rates rise now, and the likelihood of such a result will be clearer.

Britain's unemployment rate has fallen from 7.4% to 7.1%, according to statistics released yesterday by the ONS. With unemployment at 7%, the Bank of England is likely to adjust the benchmark 0.5% rate, which is the first time the UK has raised lending rates since 2009.

According to the CBI survey, there are now over half of the UK companies surveyed (51% per cent) that are planning to recruit more jobs in the New Year – the best results since 2008.

The technology companies that have been the most threatened by bankruptcy this year are cloud-computing firms, Canalys's chief analyst Alastair Edwards.

"Cloud companies are based on the need to drive people into the cloud in a short period of time, but this is clearly an impossible task, so they do not have the necessary flexibility to provide services to all customers on demand." ”

On the other hand, many dealers have set up a managed services operating system, hoping to maintain the traditional internal technology departments at the same time to extend the olive branch to the cloud environment.

"The key to winning a living space at the moment is to build a diversified business model that will allow itself to capture the potential of growth in emerging opportunities," he said. We believe that the bankruptcy situation in the cloud product area will be more serious than the traditional distribution channels, "he added.

For some traditional dealers, the current situation is absolutely not optimistic. Today's negative factors include an increasing number of businesses that need it consumption-service solutions, and many service providers and integrators are also starting to make a cameo appearance, while many budget-rich companies are starting to convert purchasing decision makers from past CIOs to business people.

Edwards pointed out that although complacency is any company's natural enemies and taboo, but the face of the current difficult situation, channel dealers should come up with some self-confidence.

"It is absolutely a very extreme misconception that the distribution business is facing extinction, after all, the participants in this market have excellent resilience and endurance," Edwards said.

Even the absolute rulers of the infrastructure services sector, the largest cloud service provider, are still not truly profitable-cloud computing king Amazon Web Services is still being sold at below-cost prices, and this is the only way to attract customer support. SaaS companies are also struggling to survive online.

At the local level, many cloud service providers are turning their attention to dealership channels, as they realise they need to use the army of salespeople to persuade their clients to embrace the emerging things of cloud computing.

According to statistics from the Cloud Computing Industry Summit Forum (Cif,cloud Industry Forum), 69% of the respondents have deployed at least one cloud service, although 71% of the respondents are not in a hurry to abandon the in-house-deployment technology altogether.

Andy Burton, the founder of CIF, also believes that large service providers are starting to invest in the underlying channels for cloud services sales, mainly because they feel the pressure from financial figures.

"Regular-income companies must rely on enough turnover to keep themselves healthy and need the money to grow in the future, but as an emerging market, the implementation of cloud services is healthy," he says. ”

Burton also points out that many smaller companies are developing economic test patents that are not necessarily considered by the IaaS giants such as Azure and AWS, with the aim of providing guidance and planning to small and medium-sized business users.

The challenge for the entire IT industry now, he says, is "a serious shift in the supply chain from a macro perspective, and the channels through which people buy it are already different." ”

"Because some manufacturers will directly take over the sales services, independent software developers into service providers, and even some of the dealers choose to operate hosting services, which led to the traditional supply chain break." ”

Perhaps a bit comforting for all sorts of tech companies is that Britain's current economic indicators appear to be more upbeat than in the past, which could lead to some rebound in technology spending.

The International Monetary Fund this week raised the UK's growth forecast to 2.4% per cent, and the Office for Budget Responsibility finally got more money for the first time in 2008 years.

According to Graydon UK, overall IT spending has risen by 15% in the past five years, compared with 13% and 9% per cent for construction and manufacturing.

Forrester expects Britain's technology spending in 2014 to rise 3% and 2015 will increase cuts but this level still lags behind the fastest-growing Brazil, Mexico, China, India and the United States.