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Follow UsThe findings of the annual industry performance review of Manufacturers' Association of Information Technology (MAIT) for 1999-00, has thrown up an interesting business opportunity for channel partners. The findings reveal that there are over two million PCs that require immediate upgrades. And that's a whopping Rs 1,500 crore opportunity!
The numbers have been arrived at in a very conservative fashion. What MAIT is saying is that even if 50 percent of those two million PCs go for upgrades at a cost of Rs 10,000-15,000 per unit, the hugeness of the opportunity just jumps at you.
We believe that the opportunity is much bigger than what it is made out to be because the Internet is driving the buying of PCs as well as their refurbishing. The Internet attraction is too strong to resist. People are buying PCs to get hooked on to the Net. This fact has been very clearly revealed even by MAIT findings.
Sixty percent of the first-time buyers in the household segment and 52 percent of the business segment bought PCs along with an Internet connection. At the same time, an increase in Internet connections took place in a phenomenal manner. These more than doubled to 8.73 lakh in May 2000 compared to 3.48 lakh connections in May 1999.
The rush to get on to the Net is there for all to see. Today corporates are on the move to take their business to the Net for B2B and B2C transactions. Fresh capital investments may prove to be difficult for most cash-starved companies who would look at upgrading rather than fresh buying of equipment.
What can come on the way of upgrades is re-emergence of thin clients. More and more SMEs abroad are putting up powerful servers that allow desktops to work as thin clients. In a networked scenario, this option can help customers on fresh investments.
And yet, the refurbishing opportunity is indeed big. At the same time, the upgrade business is a tedious business. Long-time channel partners who are already exploiting this opportunity would find the going easy while those who want to enter this business anew, will have to first carefully understand the expectations of their customers.
If a customer has bought a machine some two years ago paying a hefty Rs 50,000, he/she expects at least 50 to 30 percent in buy back. When that doesn't happen, he/she is hesitant to proceed with the refurbishing. This is where the convincing ability of partners comes into play. They have to take customers into confidence and educate them on present day realities to explain why such high returns are not possible on buy backs.
The upgrade business, above all, is rooted in service. If partners assume that one single visit will bring in the moolah, they are sadly mistaken. A series of calls and long duration of handholding alone can make a partner successful in this business.