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EDITORIAL: Where to next?

EDITORIAL: Where to next?

If focusing on the high-volume consumer hardware market is now a route to oblivion for traditional resellers, as a seasoned distributor claims (see page 1), just where can the channel turn for a successful business metamorphosis?

This time last year, every PR flak and marketing type in the IT industry was spruiking the wonders and value-add opportunities in online procurement, B2B solutions and e-commerce in general. It's amazing what a little stock market correction can do for the process of business reinvention.

It has since been borne out that much of the Internet hype was a hoax. Channel companies which attempted to reinvent and cater to old-world corporate Internet panic will now have discovered demand has deflated right along with the bubble.

As many dot-coms bombed, the urgency of Internet projects being undertaken by corporates lessened. Consequently, the fundamental economic principle of supply and demand brought many supply-chain players to their knees, forcing them to look elsewhere for the next big thing.

Meanwhile, even the promised savings and efficiencies of online exchange-based procurement, auctions and e-tailing have failed to attract the level of punters estimated by analysts.

Resellers which identified that enterprise software applications were heading for the small and medium enterprise (SME) space would be fairing a little better. As direct-selling vendors ran out of customers at the big end of town, they quickly realised channel partners were needed and went about wooing them with good support and training as well as lead generation.

However, even this hotbed of opportunity has become muddled as every software vendor reinvents its marketing message to include acronyms such as CRM and B2B.

While it is obviously just as hazardous today as it was 12 months ago to predict where the best opportunities for channel players currently are, some markets do look rosy.

It is almost stating the bleeding obvious to say GST still presents an opportunity for the channel. While you may very well be struggling with how to deal with it in the day-to-day running of your own business, the good news is that everybody else is too and they are turning to technology for help.

I am betting on various point-of-sale solutions in retail and mobile solutions in other industries to be the biggest opportunities this year. Resellers that can evolve into these markets with their existing customers will realise there is still money in this IT channel caper.

POS computer and printer packages are hot. Internet and network-attached kiosks are going to be big and the best uses for them are yet to be discovered. Wireless workstations and remote access to corporate networks are also sure to attract attention from the business world.

The good news is that, according to those already in the game, all these areas of focus are still bringing in good margins, which of course should be the Mecca for all middlemen.

One thing is for sure - you are not going to get rich in 2001 by buying a pallet of boxes, whacking a margin on it and shifting it off to the next guy.

Feel free to tell me how your business is facing the challenges of margin squeeze and which new path you have chosen on the road to profitability. Your success stories will make good news in a year in which I suspect there will be more carnage, consolidation and gnashing of teeth for parts of the channel.


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