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Editorial: All aboard the bandwagon

Editorial: All aboard the bandwagon

There can be few industries where trends are as closely monitored and quickly seized upon as they are in IT. Different resellers will always want to know which vendor has the highest PC sales, which business process software is proving most popular with end-users or which services they can build into their current business model to boost those ailing product margins.

Large vendors are known to pounce on start-ups that show promise and incorporate the new technology into their own. On other occasions they form allegiances with like-minded vendors that are backing one strand of technology over another (such as the current HD-DVD versus Blu-ray battle for control of high-definition video media that Sony et al are contesting against NEC, Toshiba and partners). This is all part of the game in a fast-paced industry where higher risks usually lead to fatter profit margins or, unfortunately for some, complete failure.

In terms of channel opportunity, this column recently looked at the increased focus on environmental issues, asset disposal and the growing market for second-hand hardware. Any initiatives that look to make the most of assets and then dispose of them properly at the end of their useful lifecycle are laudable indeed, especially if the channel stands to make a buck out of it.

But the latest trend starting to gather momentum is the rise of third-party service providers that are looking to help resellers with business processes, most notably sales and marketing.

In recent months, ARN has become aware of several companies that are looking to do just that: Moneytech, which launched a credit card specifically targeting the IT channel; Intersell, an online marketing library licensed exclusively to Tech Pacific that enables resellers to build vendor-specific marketing campaigns; Marketology, which offers the channel lead generation programs and helps dealers to articulate their value proposition; and now IDL, a UK-based company that is offering to build channel program modules.

It is no secret that vendors, specifically the large multinationals, have always found it difficult to reach small business. Many have rediscovered the value of the channel in recent times as they try to get their products into the 1.4 million potential customers that this section of the market represents. But the question that the emergence of these third-party business enablement companies poses is whether the vendor community is any better at dealing with its army of traditional corner store resellers than it is with high street florists or remote farmers.

The answer is probably not. This is not necessarily a criticism; it is just a fact of life that billion-dollar organisations are not going to be able to do a very good job of catering to the individual needs of their many feet on the street. And the early successes being claimed by these third-party operations (one is boasting an unheard of 100 per cent cold-calling success rate) suggest there is plenty of room for such companies to ply their trade if they get the model right.

The key, it seems to me, is offering simplicity. Like most small businesses, owner-operated IT shops are consumed by the day-to-day running of their business and often don't have the time to be strategic when it comes to developing effective marketing plans. Even if they did, many would simply have no idea how to go about it because this is not one of their core skills. Companies such as Moneytech, Intersell, Marketology and IDL should be applauded if they can make a living from taking some of that pain away and letting resellers concentrate on the technology.


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