Editorial: Everybody needs a solution

Editorial: Everybody needs a solution

It's been a busy week of news in the channel where everybody is looking to find the right solution.

Ingram Micro's creation of a Solutions Division is the clearest sign yet that the country's largest distributor is determined to be considered something more than a time and place operator (see page 1 of ARN May 17 edition).

Senior executives were keen to stress the new initiative would not see it abandoning its bread and butter SMB business in any way. But the company has clearly recognised that shifting boxes alone is not a viable business model; even when they are being shipped in vast quantities.

While other players in the market will provide tough competition, there can be no doubt that Ingram is the only distributor in Australia that can offer resellers a one-stop shop when it comes to high-end solutions across the board. That is a compelling offering for large and specialist customers if Ingram gets it right.

But of its 5500 active resellers, excluding retail partners, only 350 are meaningfully engaged in the solutions game at this point in time. While this number is likely to grow substantially during the next year or two, that will still leave thousands more who will not be able to ride this gravy train.

With mass merchants eating into traditional SMB reseller business, especially commoditised products such as PCs and printers, the squeeze is well and truly on.

Europe has seen the number of traditional resellers plummeting in the past couple of years for these very reasons and it is a trend we can expect to see in Australia. New HP printing boss, Christoph Schell, alluded to this problem in his first interview with ARN (see page 4) and said it was a problem he would look to address. What exactly he will be able to do about it is quite another matter.

But first impressions suggest Schell will be a positive appointment for the local HP printer channel. For a start, he wants to engage tier one resellers more effectively in the cost-per-page fight against copier giants, Canon and Xerox. His predecessor, Rebekah O'Flaherty, had looked to take top accounts increasingly direct and alienated some major partners along the way. A reversal of this policy can only be good news as long as those resellers are willing to forgive and forget.

More importantly, Schell wants HP to be perceived as a single company and has hinted at a realignment of its distribution model. This column has been used before to question the wisdom of a major vendor like HP using different distributors for complementary product sets such as PCs and printers. It is a view shared by the company's new IPG manager and changes look likely.

While that decision is still weeks away, according to Schell, it is most likely HP will look to follow its European model. This would see it categorising distributors into two camps - Ingram, and possibly Synnex, as logistic specialists that are paid an extra couple of points for warehousing and transport; with the rest effectively acting as sub-distributors.

If all current distributors are retained across IPG and PSG, it could mean Cellnet and Dicker Data are forced to buy from their competitors. While that would see them gain access to the whole HP range, it remains to be seen whether this would be welcomed if it means doing so at a couple of points disadvantage.

Finally for this week, it seems all is not well at Ipex. Commander will surely look to sell but who would be in the market for an ailing system builder? My money would be on Acer simply because it would give it a production facility in Melbourne.

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