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Happy new (financial) year

Happy new (financial) year

And so another new financial year begins. At this point, it's probably worthwhile reflecting on what the previous year brought us and what the next year is likely to.

Having sat in this esteemed chair for the entire year, from my perspective it's certainly been a tumultuous time for resellers; full of challenges but most importantly full of opportunities.

The ever-increasing pervasiveness of the Internet made computing more mainstream than ever before. Home usage of PCs skyrocketed and, with the trend of offering cheap PCs subsidised by Internet commitments only set to continue, this year will be no different.

Small and medium businesses, which have for so long been tipped to be the gravy train of the Australian IT industry, finally started to roll last year with many more incorporating more advanced technologies like networks, e-mail and the Internet.

A lot of people made a lot of money at the top end of town, as big corporates and government departments called for help and upgraded everything as they fought to make their systems Y2K compliant.

So if you didn't have a good year last year you really need to question your business model because there were plenty of opportunities and plenty of resellers that did very well at all levels of the IT caper.

Of course, many resellers have had a good hard look at their business model. No doubt, the biggest challenge that resellers faced last year was falling margins on hardware and software. That undoubtedly prompted many resellers to shift their businesses towards generating highly profitable services revenue. As we reported in last week's issue, the latest research from Inform indicates that for the first time services has overtaken hardware as the biggest source of revenue for resellers.

So what about the forthcoming year?

The first thing we can probably expect is more of the same. PC penetration into homes will increase but I have no doubt the biggest growth market this year is going to be in the small-to-medium arena, which will increasingly experiment with the Internet.

Expect this market to be a dogfight, though, as everyone from retailers to Australia's biggest integrators attempt to cash in.

Vendors will try and grab their share of the market directly as well, but my most recent thinking here is that their timing is pretty ordinary.

If the Internet had enabled direct sales five years ago, when all small businesses wanted was a PC on every desk, then that would have spelt trouble for resellers. But as we've already pointed out, small businesses are moving to a new level of complexity as they demand network and Internet-driven solutions. For that, they have to rely on the channel and most likely they will go back to the same partner who has always provided them with their PC requirements. For all the fuss and dire predictions about direct selling across the Internet, I can't see it overly affecting resellers this year.

Opportunities though, one cannot help but see. So I say with all sincerity, then, happy new financial year.


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