Direct PC sales, including direct marketing campaigns and Internet sales, have grown by 60 per cent, according to figures contained in a recent IDC report. In comparison, sales through the channel increased a paltry 14 per cent for the same period.
The report highlights the increasing threat posed by the Internet to the existing PC reseller model, but it holds no surprises for a channel already suffering under direct sales and minute margins.
"Industry players need to review their business buying models if they have not already done so," stressed IDC market analyst Rupinder Toor.
"The first thing the channel has to realise is that the Web not only provides value-add for vendors but it enables the vendors to contact customers directly," Toor said.
The common reassurance that resellers are able to provide a more personalised service was also criticised by Toor as unrealistic in the age of the Internet. "Everyone is focused on providing value-add through services. In the future even the ability of the channel to provide services will be eroded because vendors will be able to do that through the Web. And the increased implementation and use of networks means it is becoming less complex for users to do it all themselves," Toor added.
Citing the launch last week of Ingram Micro's Configure-to-Order facility and increased focus on Web sales, Harvey Norman's Internet strat-egy and Hewlett-Packard's recently announced e-commerce strategy, Toor said the week epitomised the troubles the channel faces.
"These activities illustrate the volatile nature of the channel, fuelled by the developments in the Internet arena."
Instead, resellers will have to assume the guise of Web developers, consultants and Web tool providers.
"The channel will have to start embracing the Web and start providing all the tools businesses need to utilise this technology. The Web can be used to add value to a reseller's business," Toor said.