The bottom line in IT channel business is obviously the pointer to what really translates into choice for customers and opportunities for VARs and SIs to grow their businesses.
Having said this, it’s important to take a closer look at the challenges the channel fraternity has faced in the past — and the new ones as well.
Initially, during the late eighties and nineties, we just had a single tier channel, which operated either buying goods directly from vendors or importing and helping customers configuring them.
Gradually, the industry in India is today matured enough, and we’ve all kinds of partners in the channel network – VARs, sub-distributors, resellers, SIs, corporate resellers, etc. serving various industry verticals as well as segments.
But in the process, there also have been times when the channels have confronted a few issues of a very serious nature.
Some of my friends in the fraternity, unfortunately, don’t have fond memories of some of the worst times including Y2K and the post 9/11 slowdown in 2001.
In 2001, in particular, they say that within just a few days, many flourishing channel establishments — resellers to solution providers and sub-distributors — faced immediate closure of businesses.
Yet another setback for the channels in last 2 years has been in the battle for survival and relevance between branded PCs and the assembled ones. This has been a time when pundits spread prophesies that channels — especially assemblers — will be wiped out with branded PCs gulping the lion’s share of the business — if not the entire market share itself.
There also came other challenges like Dell’s direct selling, etc.
But in today’s changing scenario, resellers and VARs have to closely look at the new challenges — like the emergence of IT retail (both large and small format), maintaining a healthy ratio of top and bottom lines, knowledgeable customers, access to information, and short product life cycle.
Among these, retail expansion will no longer be confined to the larger cities. My channel friends also know pretty well that large format retail would be making a foray into semi-urban markets and smaller cities while these B- and C-Class cities would also mature to new technologies and products.
One of the most obvious fallouts of these is the emergence of a digital convergence, connectivity, and mobility.
These days, therefore, it’s no wonder that formerly professional grade products are now accessible to the consumer market: flat panels are now accessible in price for common users – homes, not just offices.
Notebooks are growing to adopt multimedia functions, and so on.
All this put together brings us to the new role for vendors as much as for channels.
As manufacturers look at introducing newer and more advanced technologies in the Indian market, I see a different role for vendors, wherein they’ll create awareness on the benefits of these new technologies.
This brings into focus the greater role in evangelization by partners — especially in retail outlets, where customers would not only walk in to pick up hi-tech products but also expect to be educated about the items and the technology. Therefore, I also see the channel becoming more aggressive, dynamic, and experimenting much more with new ways to sell their products.
But there’s need for caution.
Only a channel member that has the conviction of handling challenges — including hiccups like involvement of huge capital to ensure proper demonstration units — should venture into retail.
The vastness of Indian geography — with the peculiarity in each region — would compel partners to look for specialized modules to sustain their retail business. To be successful, therefore, it’s essential that a partner look at different ways of approaching the customers. Some are already experimenting by tapping specific verticals like education, pharmacy, etc.