VICTORIAN VOICE: Happy days are here again?

VICTORIAN VOICE: Happy days are here again?

A new year represents a new opportunity for all those in the channel. To steal a phrase popularised by Her Majesty the Queen of Australia (How preposterous is that?), 2002 was what could only be described as an annus horibilis.

If the battles of a consolidating channel and flat demand were not enough, we had the terrible events of Bali, the shadow of a potential war, a devastating drought and incessant bushfires in just about every state hanging over our heads.

Surely, the next 12 months just has to be better. Doesn’t it?

Most probably, the answer to that question is ‘yes’ but if there were any lessons to be learnt from 2002 they would be that nothing can be taken for granted. As a whole, the IT industry is perhaps never going to return to the glorious growth of the millennium era but it is also certainly not going to stop being a crucial factor in the operation and success of both private and public enterprise.

There are many reasons to hold faith that 2003 will be better for the channel than its predecessor. Firstly, there is the probability of significant PC upgrades taking place across many organisations. At this time last year, analysts were insisting that all those Y2K and GST purchases would require replacement in the second half of 2002.

It was to be the saviour of the industry but never really eventuated so this year just has to be the time when the large majority of those compulsory upgrades kick in.

Aside from the upgrade cycle which will boost the corporate reseller space, increasing broadband uptake and the continuing pervasive adoption of technology by small and medium enterprises will also boost demand. Increasing affordability and acceptance of wireless solutions and home networking are also likely to provide a boon for retailers and small dealers.

Meanwhile, escalating integration of the Internet by educational institutions and the mobile solutions it enables for them is sure to assist channels catering to this vertical.

Overall, you would have to surmise that the final tier of the channel — customer-facing resellers — is looking healthy. The challenge is for distributors. Increasingly in 2003, they are well and truly going to have to define and display the value they add to the supply chain. In the end it is the only way they will be able to continue charging a margin for it.

I have no doubts about the roles of wholesalers in the channel recipe but direct-to-reseller or direct-to-end user experiments by large vendors such as IBM, Cisco and HP are questioning their relevance. There is a definite challenge to this tier of the channel from these (and other) vendors asking them to demonstrate their value and to charge the customer for it.

I would not be surprised if many vendors are hedging their bets and watching very closely how the shorter route to market for technologies plays out with the market leaders. If the big guns who have pioneered technologies, marketing strategies and partner relationships can make these direct relationships work, there will be many who copy the strategy.

Tell me what you think are going to be the defining technologies, issues and strategies of 2003.

Gerard Norsa is ARN’s Melbourne-based editor-at-large. Contact him at or on (03) 9690 2859.

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