The global and local slowdown in IT spend carries potentially negative consequences for the channel, but it also carries rich opportunities for resellers able to diversify their offerings and add enhanced value to their customers. This, says Scantec MD Mark Broude, will be the acid test for the reseller channel in the short term.
"While there is a broad base of resellers in the market," says Broude, "only those offering true turnkey solutions wrapped in services and value-add will survive. By the same token, those that do not evolve will confront several business-threatening challenges."
There are diverse views in the market about ownership of the channel, notes Broude. "Some believe vendors own the channel, while others say resellers dictate the pace of the market. We view the channel in terms of partnerships. Our partners are vital to our business as they own their customers, the end-users of our products.
"The value of channel partnerships lies in the fact that they can supply versatile, turnkey solutions. In return, we position ourselves as our channel partners' multiple-product vendor of choice; we can provide a wide range of products used for solutions in virtually any industry - this enables them to obtain most of their hardware from a single source."
Broude says vendors of multiple products should be in a position to support their channel partners by offering a wide range of value-added services such as the provision of technical and backup facilities for their products. The support of channel partners by vendors works to the benefit of both parties, he says, and is essential to success.
Partnerships with multiple resellers can help vendors to keep in touch with new trends and technology. At the same time, vendors can assist resellers in finding opportunities within their existing customer base. Once again, the emphasis is on partnering and its advantages.
More partners vying for same business
Broude believes that while the spending slowdown may have some impact on the existence of smaller dealers in the channel, it will also lead to more channel partners vying for the same business. Vendors may, therefore, find themselves dealing with an increased channel base or with channel partners looking for business in new areas. Vendors have much to gain from partners specialising in areas that support and complement each other. The key factor is not to defocus, but to supply a solution wrapped in value.
"Relationship building and the ownership of customers will have a major role to play here," he adds. "It is at this juncture that resellers who focus on value-added services, as opposed to box-dropping, will prevail."
While customers are emphasising the need for total solutions, there is always the issue of price sensitivity. Channel partners can often counter the cost of hardware - which is where price can become a major issue - if they are offering a total solution.
The channel needs to heed the call for added value. Customers are looking for solution providers, and the user base itself is driving the delivery of turnkey solutions. This is a trend that will lead to a reduction in the number of partners per project as customers look to a single source for their hardware, software, integration and service needs. Ultimately, vendors need to recognise customer demands and work with channel partners in providing holistic solutions.
"There is a great need for more value-added resellers," Broude says. "While a spending slowdown has been predicted as a result of developments on the global front, there is no doubt that the situation in South Africa is quite different. Demand for technology has not reached temporary saturation here as it may have in the US, for example, and opportunities for local technology companies continue to grow. In addition, Africa is starved for technology and countries that are starting to bridge the technology divide are looking to South African companies to provide their IT solutions."
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