Computacenter, one of the UK's largest IT and services resellers, said it expects profits for the year ended December 2001 to be more or less in line with analysts' expectations, thanks to its recent focus on services.
Analysts have warned that resellers which do not adapt to service oriented models could face extinction.
Computacenter reported that its hardware reselling business had been particularly affected since the summer, with sales down 28 per cent on the first half of the year.
The company said that its focus on managed services had helped it offset that downturn and enabled it to record a pre-tax profit of £52m.
"You can't stand still in this industry," said a Computacenter spokeswoman. "With people cutting IT spend they need to find options from elsewhere, hence the push into services."
Pete Foster, principle analyst at market watcher Ovum, said that Computacenter was reaping the benefits of foresight by moving into service offerings early.
"This is absolutely the way that resellers will have to go because outsourcing is standing up way above anything else in IT at the moment. Margins are shrinking on hardware, and services offer a repeatable income secured by long-term contracts," he said.
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