EDITORIAL: Market worries

EDITORIAL: Market worries

I don't envy the small business operator. Many resellers must be wondering what's happening to the IT industry at the moment, and GST is again the subject of angst.

First we had the Y2K hype, which promised truckloads of PC and peripheral sales, then came the promise of pre-GST spending, and now we are supposed to have the post-GST Nirvana. Well, wasn't all that just one giant circus act?

Y2K was a fizzer, pre-GST spending didn't meet expectations and now post-GST spending is in a dive.

Think I'm exaggerating? I can bet that over the last month you've invested more thought into whether you should buy a new TV for the Olympics than a new PC (as for the Olympics, I'll leave that topic to Matthew JC. Powell - see page 40).

But the true sad state of play in small business land, according to our page 1 story, is even small businesses that have ordered IT equipment can't afford to pay for it because of the GST.

As I've argued before, for all the upsides promised by the GST, 1 October is going to be the real test. With any luck, your first business activity statement (BAS) submission should be smooth if you believe the back-of-bus hype. But for many, I suspect the usual last-minute chaos will prevail as you struggle to fork out wads of cash for Mr Tax Man.

Of course, there is a broader issue at work here. Strategic business planning - if you believe in such a thing.

Over the last few months, I can imagine your business has invested significant time into planning its future over the next 12 months.

The problem is all the industry pundits are proving themselves to be as accurate as Sydney's City Rail timetable - on a good day.

In addition, the IT landscape is changing arguably faster than it ever has before. For example, almost out of nowhere, ASPs are close to becoming a serious force in the channel. And on this front, I've had two readers call to ask about its next incarnation known as Management Service Provision. Stay tuned for more reports on that one.

And another favourite example of mine is the perceived influence of investors. eServ is the latest reseller to dip its toe into the ASX waters, and, to its credit, with considerable success (see page 6).

But the risk with listing or the venture capital alternative is you don't really know where the power lies that controls your future.

How often have you heard the phrase: "The market will dictate if we succeed or fail."

David Keane, former IT channel advocate and now CEO of content provider cum service provider K*Grind, made an astute observation to me recently after securing a significant investment in the business.

The investors he thought had the power were in fact not in power at all. The investors claim "the market" pulls all the punches. Trouble is, we don't actually know who runs "the market".

Well, would the real "market" please stand up? We've got a few questions for you . . .

So, let me know your opinion. Are we on the edge of a fresh boom, or is it one gigantic slide into GST never never?

Mark Jones is editor in chief of Australian Reseller News. Reach him at

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