Editorial: Birth of opportunity

Editorial: Birth of opportunity

Horizontal and vertical integration, rather than consolidation, is the term that describes the current process of contraction in the channel. The market may be getting squeezed, but — when all is said and done — is the number of organisations in the channel really dramatically shrinking? The answer is probably no. For every BBF and Bluechip merger, and every liquidator appointed, there’s an emerging player pursuing a new opportunity and a new model that we don’t get to hear about as loudly.

The pressure to integrate — horizontally or vertically — is a predictable pattern in any consolidating space. But the space created by the freeing up of the market is not an unfillable vacuum. This space is filled with new partnership models and market opportunities.

If you compare the dynamics of the industry with the dynamics of the labour market, for instance, two parallels immediately jump out: the first is that there is no such thing as a lifelong career any more and the second that such a state of affairs creates a more flexible and mobile market. Likewise, in a saturated IT market, a lifelong business model is not an option and the flexibility to move upwards and sideways is a fundamental premise for survival.

Some basic skills and rules will, of course, always prevail. Selling on brand, features and ROI — as opposed to price — is one that Toshiba’s mobile market team identified as a key to resellers’ survival when it recently launched an new marketing initiative aimed at changing resellers’ mindsets in the way they deal with vendor marketing support. The underlying issue is that in a margin squeeze, resellers should know better than to contribute to its further erosion by using marketing dollars to support price reduction.

What both theories are premised on is business skill, creativity and foresight, and the ability to identify and adapt to new opportunities when the market is in flux. In other words, with every contraction the birth of a new opportunity is guaranteed to be that much closer. Perseverance is one ‘skill’ required.

Keeping your mind wide open is another. The rest is simply déjà vu to be learned from — horizontally or vertically, it doesn’t really matter.

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