Change takes its toll

Change takes its toll

Most people I speak to on a regular basis are still telling me that the market is buoyant and they are chasing their tails trying to keep up with demand. That is probably a natural response when talking to a journalist but it's no coincidence that most of these companies are integrators that have built some element of services into their model.

A few stories in this week's issue are a timely reminder of the chasm I believe is starting to appear. For every company that is killing it right now, and there are plenty of them, there are lots more that are struggling to keep their heads above water.

Three stories about businesses going under in the same week doesn't prove anything in itself - and there were extenuating circumstances for two of them, with one citing a telco dispute and another crippled by legal threats - but I believe the shape of the channel is changing.

Historically, it has been made up largely of two groups servicing different markets. Business models varied but one group dealt with the corporate market and another with consumers, SOHO and small business. Both groups were largely hardware-based, although some were earlier than others in seeing the need to embrace services.

At the corporate end of the market, integrator behaviours are changing but the market is undoubtedly still very healthy. Competition is tough but, for those who get it right, there is a lot of business up for grabs. Specialisation is the key to success for all but a handful that are big enough to retain a broad model and partnerships are becoming the norm.

For those plying their trade in the small business and consumer markets, change has been more difficult. You only have to look at the rapidly dwindling number of independent IT corner stores to know that the consumer market is all but lost to mass merchants and the Internet. The small business market is still viable but only for those that have established trusted advisor status with a manageable number of core clients and can offer much more than networking a few PCs. Only by having these relationships can small resellers justify charging a few dollars more for hardware and the services component of their business is vital to ongoing profitability.

The base number of resellers might not be moving much despite these trends but the make-up certainly is. Smart operators are embracing the Web as a tool to make their business look larger than it actually is and for every corner store that locks its door for the final time, small business consultancies are popping up to take their place.

Finally for this week, congratulations go to ASI Solutions for winning a spot on the NSW whole-of-government notebook panel. It was little surprise to see the company make the PC panel earlier this year but it is less well-known for its notebooks and beat more established local rivals.

If any company in the local IT market has shown an ability to embrace change over the years, surely it is ASI. Still best known as a local builder, the company now makes a large chunk of its profits from document management solutions and has grand designs for a slice of the datacentre market.

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