Dell s unprecedented move to give up its forte in direct selling and turn towards traditional channels underlines the obvious that resellers community cannot be wished away by stroke of a pen.
The hands of the clock seem to have traversed a complete circle and have brought us precisely back in time when it all started. The saga of direct selling had surfaced when Dell embarked on the roadmap, sparking off fear among the channels in countries like India, where IT business has traditionally been channel-centric and creating ripples in the market.
In fact, Dell was not first among the giants. Not long ago, many other IT hardware giants also made a beeline for adopting the concept of direct selling.
At the start of the new millennium, HP s flamboyant chairperson Carly Florina had said, ” … we have to serve customers the way they want to be served. And if direct is not cost effective model for certain parts of the business, that s the way we ve got to go.” Today, the revolution is finally back at your doorstep.
As was a few years ago, whenever vendors drew plans to ramp up sales in a targeted market space, the dilemma still remains whether to go direct or via channels. Frankly, Dell did succeed in glamorizing the direct selling model by making it their forte and giving all other giants a run for their money, to leave resellers unnerved.
Now, Dell itself has decided to give up its hitherto forte and will enlist the services of the channels to ensure greater footprints in the market. Importantly, this is being tried out in India as well and more importantly the Dell move comes close on the heels of the world s best-known direct selling vendor s enhanced operations in India.
I am aware that I risk contradicting myself, as in one of my previous columns, I cautioned about Dell drawing major mileage out of direct selling in India by churning out a revenue figure of Rs 1800 crore. Mind you, I was not alone. Our good friend P N Prasad of Pondicherry IT channel association wrote: “Whatever market share Dell gains will be definitely at the cost of channel business.”
But the latest turn around by Dell elicits that the issue is no longer of applying options; on the contrary it is a compulsion. The channels can t be ignored in a sweeping statement or be wished away by a stroke of the pen from channel managers with any IT vendor.
This very concept of enlisting the services of channels in India has gained importance given the country s vast geographical spread with varied cultural background and also the different business models.
True, it is not merely confined to India. The business of IT distribution is no less than a battlefield where vendors, disties and partners have to sweat it out for their share of the market pie. If you take a closer look, it is easily understood that the end users either corporate, SMB or any other verticals are not the sole arbiters of the contest. The channels definitely play a decisive role and it is the partners who have the ability not only to swim across but can also help vendors boost their market footprints.
Thus, though direct selling is the inherent part of the game, the channels can t be wished away either. We have to understand that the paramount aim of any sales strategy by vendor is to gain the maximum market share while retaining optimum margins. Direct selling is only a compulsion out of that necessity and it is the same necessity — of achieving greater footprints — that vendors have to turn towards channels.
This is what is driving specialist vendors like SAS Institute to market Business Intelligence tools in India as in other parts of the word through channels. Moving ahead, SAS has crafted a room for channels where in they can work in tandem with the vendor s direct sales team.
Therefore, no matter how much of direct selling sets in, how much of economic slow down is felt or international oil prices go up, the channels both globally and in India will continue to have their importance. To use a clich from the game of cricket, the reseller will remain not out till the end of the game.