Mergers and acquisitions might panic channel community in the short term, but in the long term it will be beneficial for the channel community, according to the major distributors who participated in the ChannelTimes-organized National Distributor Conference 2004. It's also a sign of the Indian IT market getting mature, they observed.

The event, which was held in Mumbai recently, was sponsored by Samsung India.

Pointing out that mergers and acquisitions are inevitable in any industry, J. Kulkarni, CEO, Redington India, said, "Mergers are a part of the maturation process and it is good for everyone. Everyone will be better off as it brings a lot of stability in the market. The strength of business depends upon stability and channel would be able to get the returns on investments.'

Kulkarni believes that today there is a duplication of stocking and all the disties have enough finance to bridge the gap.

Talking about the consequences for the channel, Aditya Bhuwania, director, Priya Limited, said, “While mergers and acquisitions are definitely beneficial for channel, the other side of the story would be credit, which could become an issue. While earlier the vendor was giving credit to two entities, he would not be inclined to give the same amount of credit to one distributor. It threatens other disties and channel partners.”

Though credit could be a major concern for the channel, at the same time it will open doors for other disties. Suresh Pansari, MD, Rashi Peripherals, observed, “It will suck out some credit out of the market, as the channel will have to invest more from their pockets. Apart from the credit issue, it will give business exposure to distributors as vendors will look for more disty houses.”

Raj Rathi, director, Cyberstar, added, “In the short term, it may not seem good for the channel partners, as the bargaining power will go down. But in the long term it will be good for the channel as other disties will try to find space for them.”

Paras Shah, MD, Neoteric Informatique, believes that there are too many players in the country and for better business opportunities the number has to go down. “Some of the international market have too many players and consolidation has to happen. It stabilizes the market profitability. Lesser the number, better the business. So channel need not worry.”