The whole world is succumbing to a slowdown. I am seeing a lot of companies, including IT giants, laying off people, or right-sizing their human resources as they like to put it, as a cost-cutting measure. But do the sparks of cost-cutting at the corporate level, fly low to channel? Yes, certainly one may say. But then to what level and what extent? Fortunately, in India the channel partners have not yet felt the pinch. But then the channel has come up with novel ideas for sales, the associations are hand-holding partners and the expos are doing very well.
I was recently talking to SITA President Ketan Patel who said that a couple of days before the start of the expo, the channel on its own took a one-point-pricing initiative. Of course, there are black sheep in each flock, but overall the resellers have done very well. Resellers told organizers in feedback talks that they closed more deals than last year, and one of them closed deals worth Rs 15 lakh in four days of expo.
Now that’s encouraging. IT expos in December and end-January do help them generate leads, 50 percent of which I am told actually translate into actual business. That more or less takes care of JFM quarter.
On the other hand, New Delhi-based PCAIT is forming a task force to help partners determine ways to fight recession. Others are doing their own bid to educate the channel on ways to combat slowdown. Even as the channel is not issuing pink slips to its employees, it has to be cautious how it does business. The partners have to look at cash flows, determine credit period. It is definitely time for hand-holding.
And that’s happening. Partners are bundling products, adding more value to the assembled products and training its staff in the services side of the business for recurring revenues. They are increasingly getting a pie of the AMCs.
Vendors too are helping them. Market sources and my team here tell me that many vendors have slashed their targets. This is a realistic move. This helps retain loyalty, and the partner does not have to run for excuses on why he did not meet the set targets, says a reseller who sells HP products.
Such initiatives also give partners a free hand to decide whether they want to maintain the cash, or take more risks. If people do not have money to buy, then the issue of payment does not arise. Although partners are stocking lesser products in the inventory, they also need to sell, and some of them are willing to extend the credit period, knowing that it is a bigger risk.
Some others are selling products for outright cash payments though the discounts they offer their customers may be ridiculous.
All the same, all is not hunky dory. Distributors and some channel partners are testing waters, and have postponed their expansion plans. As I said in the beginning that the channel has not felt the heat of the slow down, and yet it is taking precautionary steps, which is a healthy sign. Atleast it is not in denial!!!