Editorial: Cards on the table

Editorial: Cards on the table

All too often the front pages of the news publications we read are dominated by negative stories. Editors make no excuse for this because one of the most important values in offering a news service is providing readers with information that they won’t find anywhere else — and business secrets have a tendency to be bad news because companies never fail to shout from the rooftops when they do something they think is positive.

But some stories can be ‘good news’ in both senses, as was the case when Acer made such a big noise about committing to the channel last week. The success of the Dell business model in recent years has really thrown down the gauntlet to resellers and distributors alike, creating a fear that other major vendors would follow suit and look to increase the percentage of business they do directly with customers. In these pages just last week, the vice-president and general manager of HP South Pacific, Rebekah O’Flaherty, felt the need to write an open letter to supplies partners reaffirming the vendor’s commitment to channel relationships following a letter circulated by a former distributor that questioned its future intentions.

The Acer message, that it was looking to move its entire business to a channel model in the not too distant future, was refreshing to hear. Even more encouraging was the amount of detail it provided to partners in demonstrating how it intended to do so. Acer has been the fastest growing of the major PC vendors during recent times and has attributed much of that success to the fresh approach it has taken to channel operations — this includes the AcerLink system enabling registered resellers to do customised configurations, the linking of back-end systems with distributors and the reduction of inventory held by the channel that has been enabled by faster delivery times.

While I don’t want to paint Acer as some kind of channel charity — after all, these operational improvements saw the revenues of its local operation climb 35 per cent last year while profitability jumped more than 200 per cent — the company’s recent performance is a timely reminder that a well-executed channel strategy is tough to beat when it comes to effectively reaching a large and varied customer base. Dell’s challenge has been accepted and, if Acer is good to its word and moves to a 100 per cent indirect model, the relative delivery systems of the two companies would be polar opposites. Now that would be fascinating to see.

In other news, Telstra was reported to have met a deadline set by the Australian Competition and Consumer Commission (ACCC) to explain the drastic changes made to its broadband pricing policy last month. At the time of going to press the ACCC was considering its response but, should it decide Telstra has acted in an anti-competitive manner and issue a competition notice, the way would be clear for ISPs to start legal proceedings.

Amid the recent raft of bad publicity suffered by Telstra following the broadband row and its surprising attempt to buy the Fairfax Corporation, the House of Representatives has again passed legislation allowing the Federal Government to sell it share of the telco giant. It is now 20 years since British Telecom was privatised and, although there are marked differences in the markets the two companies serve, it is high time — in my opinion — that the Australian Government followed suit. It makes no sense to have an infrastructure provider treating the same group of companies as wholesale business partners and competitors. What are your thoughts?

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