Industry players plan to buck the recession

Industry players plan to buck the recession

InDepth article on the industry's response to the GFC

Concentrating on core skills, realigning the business and establishing a consultative connection with customers are a few ways the channel plans to keep afloat in the tighter economic market.

Fine-tuning skills and enhancing investment in the most profitable areas of the business is what IT services and consulting outfit, Southern Cross Computer Systems (SCCS), is looking at to stay ahead.

“We’re looking at areas where there’s wastage, inefficiencies or units that aren’t strategic or profitable. We’re doing a bit of an internal balance on where our resources are best utilised,” managing director, Mark Kalmus, said.

One area SCCS beefed up was its software solutions group, which predominantly focuses on Microsoft technologies, business intelligence, data warehousing, and application development capabilities around SQL and .Net.

“The rationale for investing in the software solutions is that you’re wanting to get to know more about the business processes and the exact business your customers are in,” Kalmus said.

Owner of Adelaide-based reseller Lincoln Computers, Greg Williams, said its strategy to combat softer sales was offering better value to customers, such as complementary product training.

“Next month’s sales are directly related to this month’s contacts. You’ve got to keep customer contact up to get a better chance for next month,” he said. S Central managing director, Peter Mavridis, hadn’t witnessed much of slowdown yet in the market, but was getting prepared.

“Like everyone else, we’ve become more focused with the number of organisations we’re partnering with,” he said. “We’ve just decided to concentrate on our top six partners. It doesn’t mean we can’t work with the rest of them, we just can’t invest in them to t h e same capacity.” ---pb--- The services provider was also working more closely with customers to distinguish how they can get more out of existing equipment.

“It’s really taking the business approach to their existing environment rather than spending all their budgets, we’re looking at it and saying ‘what do you really need?’” Mavridis said.

Vendors are also pursuing new ideas to help their partners through the challenging economic climate and offering extra incentives, rebates and training. IBM director of global business partners, Andrew Baker, found clients looking to buy solutions from IT companies to address the business problems they face.

“Very often they’re looking to find ways to make their IT capability more efficient, produce more and at less cost, so we’re arming our business partners with thoughts on how to drive those sorts of solutions,” he said.

Key is educating partners on include IT optimisation, security, business continuity, business management and marketing. IBM has also built up its online training capabilities, as well as changed its rebate structure so partners can begin earning rebates from the first dollar of revenue. Previously, rebates were activated once a partner achieved a certain percentage of their target.

“Clearly cashflow and credit are top of mind for partners at the moment and being able to manage those key business requirements is very important,” Baker said. “Resellers that continue to try and drive a substantial amount of their business from commodity hardware will find the recession period we’re going through very difficult indeed.

“The way to succeed in this economy is to be highly skilled at selling what clients want which is solution oriented business not commodity business and that we’ve really invested in that program for our partners.” Symantec senior director, channels and enterprise sales, David Dzienciol, said open communication with partners was important. ---pb--- “Where it all starts is being open with partners and really communicating what is our strategy, how does it help them navigate through a more diffi - cult time from an economic stand point, and just trying to be as collaborative as possible,” he said.

“While the economy does impact the customer’s IT priorities, we believe consolidation, standardisation and virtualisation are all at the forefront of our customer’s minds. Therefore, partners play a critical role in understanding those areas and how they can provide services and technology to really deliver.”

D-Link marketing director, Maurice Famularo, said it mainly charged for training, but in most cases for key partners and distributors, if they turned up to the training sessions the money is refunded. Reseller promotions were another area of focus. VMware channel director, David Blackman said it was willing to pay up to 90 per cent of marketing campaign costs, depending on partner level.

“In these times you’ve got to get your messaging right and value proposition versus your competition,” he said. “A lot of great businesses emerge and when the going gets tough, the tough get going. The one thing above everything else is to remain positive.”

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