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.