2002: A channel space oddity

2002: A channel space oddity

It's hard to believe we are already at the end of the year but for most it is now getting very close to a well-earned rest.

The last 12 months have undoubtedly been one of the most interesting periods I have experienced in five years of reporting on the IT channel. Many signs of a maturing industry have been there for all to see and there is a bevy of evidence to suggest that the industry is in great shape to cope with the inevitable return to growth.

Companies can no longer survive just by bringing stock in one door, answering a few phone calls and then shipping it out again. In addition to improved technology expertise, channel players now need to demonstrate solid business acumen, intimate customer management skills and a spirit of innovation to survive.

In short, companies wanting to be part of the IT supply chain, from vendor to customer, have had to ensure they are genuinely delivering value to keep above water.

Despite the fact that this has extracted a human cost in relation to the number of jobs available in all tiers of the channel, it has to be seen as a good thing for the industry as a whole.

In my opinion, the outrageous excesses of the so-called dotcom boom were not restricted to Internet companies. The whole industry was living an extravagant lie.

Wages were ridiculously high. Marketing and public relations budgets were out of kilt with reality. Arrogance was the predominant behavioural driver for many players in the game. To rehash an old pun, many companies and individuals in the industry had dollars than sense.

This is not to say that what we all do is not significant. It is. Few would believe the fact that information technology has changed business, education, government and the home forever. But let's not fool ourselves that we are any more important than life sciences, health, environmental protection, transport or education.

IT's contribution to these and many other industries is significant and will continue to be so, now that a leaner, smarter and more mature supply chain has evolved from a sustained flat spot.

Putting aside all the rationalistic tales of staff reductions, company collapses, and corporate mergers and acquisitions, perhaps the biggest story of 2002 for the channel has been the arrival of economic reality to the industry.

As well as bringing sanity to the costs of doing business, financial realism has emphasised the importance of good channel strategies. Where once the challenge for vendors in getting a product or service to market was all about taking full control of the supply chain and owning the customer, today it is considered far more prudent to partner.

In addition to being much more efficient, vendors' focus has shifted to core competencies such as product development, brand awareness and demand generation, as opposed to greed and extravagance.

Under such developments, the real winner is . . . the channel.

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