Repositioning In The New Era

There is a deep appre
hension among the IT
channels in India today. What would happen if all companies follow the extremely
successful Dell model and embrace the Web for direct-to-customer sales? How long
will resellers exist? How does a traditional reseller reposition the
organization to be successful in the new era, where the principal is a just a
click away from the customer?

These questions haunt the IT reseller far less than a
traditional consumer products reseller or an industrial products reseller. The
fact is, the less the value addition that is required with the product, the
easier it is for a principal to close a transaction directly with the end user.
And IT products certainly require a high amount of value addition.

Let us look at the basic question — why does a principal
require channels?

Logistics, reach, financial lubrication, presales consultancy and post sales
support. For logistics, focussed players like transportation/ courier companies
can do a better job than a channel. Financial support again can be provided by
actual fi

nance companies. That leaves the consultancy, pre-sales tech
support and post sales support/ troubleshooting. Hence the secret is to
reposition the organization from a box—pushing model to a value added reseller
model.

It is impossible for any multinational company to be in
direct touch with the end user. Hence, there are a variety of services that can
a reseller can offer as value addition. It is already evident from the number of
resellers who started by selling computers and peripherals and are now focussing
only on maintenance. With the growing maturity of the Indian customer, there
will be more and more willingness to pay for services.

As large organizations move away from in-house IT departments
towards out- sourcing, the scope for consultancy and pre-sales technical support
is increasing exponentially. Right now too, there are many existing
opportunities in this field. Take for instance Application Service Providers
(ASP). There are various applications that they can provide to companies. There
is a newer set of organizations that wants to focus on their core competencies
and out-source support functions. And this is where the channel comes into play.

As principals start selling their products directly, the
entire business will move from credit to cash and carry. Third parties will
finance large deals. In this scenario, the role of a value added reseller (VAR)
becomes very important. The reseller organization can extend its unique
knowledge and support, which is very critical.

In my judgement, it will take at least another year to 18 months for these
changes to happen in the way the business is done. There is ample time for the
aggressive, young and nimble Indian resellers to reposition themselves. Let us
not forget that in such a short span of time, these extremely aggressive, young
and mostly first generation entrepreneurs have taken the IT industry in India to
one of the largest in Asia region. They will survive these minor threats and
come up right on top.

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