Global sales of desktop computers and ancillary products will top $900-billion by 2000, of which 75% will be channelled through resellers. So said international channel guru Michael Whalen in his keynote address on the opening day of Computer Faire & Bexa in Gauteng today. Whalen is senior director of channels development at CMP Media, the largest information technology publishing house in the United States. He appeared at Computer Faire under the auspices of Faire organiser TML Reed Exhibitions and CMP`s local associate, Computer Reseller News SA. Whalen said the IT industry world-wide is growing at a compound annual rate of nearly 50%. The US continues to dominate the IT arena, accounting for close to 44% of the total market. South Africa, representing 0,6%, is a "small but critical" portion of the market, Whalen said. Managing `touch costs` markups that accumulate as products move through the channel is one of the critical challenges facing resellers today. "One of the most effective ways to manage costs is through partnerships," Whalen continued. "While pooling resources is not something the channel has embraced traditionally, it is an issue that has to be addressed if all the links in the value chain are to make an acceptable profit," Whalen said. Channel assembly, through which production is placed closer to the end user, will become a major trend in SA in the next few months, Whalen predicted. This will change the current distribution model, requiring that resellers rethink their strategies. A further `hot` issue in South Africa and word-wide is electronic commerce. Most US vendors have well developed e-commerce strategies in place, though implementation of these strategies is perhaps not as swift as might have been expected. Judging from experience with emerging nations around the world, acceptance of e-commerce in South Africa could be relatively quick. "The challenge for resellers is to identify leading vendors in the e-commerce arena and forge alliances with them," said Whalen. In general, resellers who want to be successful in the future must learn to listen to their customers and not fall into the trap of thinking that they (resellers) know what`s good for the market. In addition, resellers should make it part of their strategy to market their expertise up and down the distribution channel. "Marketing to vendors and distributors maximises resellers` ability to attract the right technology partners. Furthermore, resellers should focus on communicating their key strengths and differentiators, along with their capabilities to add value to products and services. "On balance my message to the SA market is this: End-users are spending and so the market will continue to expand. For the foreseeable future IT growth will continue to depend strongly on the channel. It makes business sense, therefore, for vendors, distributors and resellers to work together." Computer Faire, Gallagher Estate, Midrand, will be open from 10h00 to 18h00, Wednesday 27 May to Saturday 30 May. No children under 18 will be allowed, except on the final day.
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