The outlook for the European channel is positive, albeit constrained. The 2025 Channel Forecast and Partner Confidence Report for Europe reveals that partners anticipate strong growth in revenue and profit, but mixed confidence levels in key measures indicate only moderate optimism.
European partners expect their revenue to increase by at least 10% and their profits to climb by at least 15%. The channel is expanding to meet a sharp rise in customer spending and demand for new technologies. Efforts include hiring new staff, expanding marketing capabilities, and enhancing technical capacities. Overall, European partners are optimistic about 2025.
The European Union and U.K. collectively form the second-largest technology market globally. This region's countries are among the most developed and technologically advanced, with a high demand for new technologies. However, Europe faces market instability. The ongoing war in Ukraine has escalated energy costs, and major economies, especially Germany’s, are teetering on recession. Many countries are also vulnerable to economic disruptions.
During the COVID pandemic, inflation peaked but has since stabilized to between 2.5% and 3% across much of the region. Partners are less concerned about inflation and high interest rates but acknowledge that rising business costs pose significant challenges. Investments in business are ongoing, though at a rate below what’s needed for significant changes in capabilities and value.
Additionally, the potential for U.S. tariffs and trade wars looms over the European market and channel. The Trump administration has threatened substantial levies on goods from China and Europe, which could escalate global technology product prices and impact IT spending in Europe. If partners can’t pass higher prices to customers, profits could suffer.
This report is a combination of the annual Channelnomics Channel Forecast and the Partner Confidence Index (PCI) for the first quarter. It highlights key indicators of European partners’ outlook and confidence (expectations for positive returns) for 2025 and what to expect from the partner community over the next 12 months.