For the last couple of years, there has been a lot of talk in channel about the need for a solution-based strategy as against the volume-based one, that was being followed all this time. A lot was said about the importance of this strategy and how it would provide a partner a growth path and boost the ever-declining margins.
Everybody knew the benefits of a solution strategy. Partners dreamed of the extra money that they would earn, manufacturers promised their channel an end to the ‘box raj’. But these were just pipe dreams. The Herculean task of defining a solution and actually getting partners to follow the new gameplan was a challenge that no company took on willingly. The irony was that even while they spoke of a solution-centric sales model, most companies developed incentive schemes based on the number of pieces sold.
Then came Intel with its monumental decision. It announced that it was going to do away with the GID and IPP programs and replace it with a new one based on the solutions sold by the partner. It backed these words by actions; it got three of the largest ODMs to be part of its Common Building Blocks strategy. It has tied up with software manufacturers for the software support and for the service support it will identify the larger IPP who have have invested in service centers and get them to cater to the market around them.
Of course, there is an ulterior motive for the company to do this: it has to safeguard its profitability. The GID program was its cash cow in India, the assembler community its revenue earner. But when branded computers started eating into its market share, Intel put on its thinking cap. It took the chip giant nearly a year to come up with the new strategy, but when it did, it did not leave a stone unturned. It has something for everyone. For the first time, the word solution comes with a manufacturer’s definition.
Yes, had Intel not done this it would have struggled for survival in a couple of years. But that’s not how leaders operate. A leader foresees a problem and comes up with a solution even before the problem becomes public knowledge.
That’s what Intel has done with this new strategy – it has lived up to its expectation of being a leader. It’s time for other manufacturers to follow.