By B.Ananda Rao, CEO of Par Data Systems
The traditional channel business that started its journey from mid-80’s had gone through great transition, from selling storage media like floppies, tapes, DOS to sale of PCs, printers, software, providing AMCs, hardware rentals to today’s advanced solutions in the areas of NAS, enterprise networking, data security, cloud & data center solutions, addressing BMS/BAS, unified communications, smart city solutions & of course, internet of things (IOT).
The journey began with huge margins and bottom lines and transformed slowly into diminishing margins and struggle for existence. The industry is witnessing huge opportunities, at the same time fierce competition, with quite a few other challenges posing as a bane to the going.
In today’s scenario, the industry verticals are expanding product domains and addressable solutions are growing, at the same time the competition too is catching up in the IT arena. The IT hardware Industry is also going through a change in dynamics of IT distribution & OEM business models, as the VARs, System integrators, Solution providers stretch out to look for multiple options in products & their deliverables to establish competitive edge over others.
Considering the trends that are driving SI’s business, it can be seen as to how the SIs today want to address the market. Sis focus to select customer verticals with all solution domains they have expertise in. Secondly, SIs focus to select solution domains and address the entire gamut of customer verticals. Lastly, Sis are present in all customer verticals with all solution domains.
Whatever trend the SI adapts, most of the deals, including mid-sized and large sized, the OEM/brand owner has a big role to play in deciding price, whom he wants to support, at what margins the SI has to be satisfied with. You call it support or interference, the OEM calls the shots, how much ever influence the SI has on end-user, unfortunately in most of the cases. However, there are lot of instances, where the SIs reserve the brand which the customer has to go with based on customer’s faith in SI’s credentials.
Today, the SI is more mature, has tremendous technical competence, capability to adapt to changing technology & business dynamics, in contrast to his earlier complacent self. The urge for growth, the competition & need for survival has considerably changed the ‘go to market’ approach. Today’s SI certainly deserve more than what it is ending up with.
With fierce competition, vendor unpredictability and conditional support and customer’s demand for competitive pricing, the SI has to necessarily win the customer with competence, state-of art technology he incorporates in his solutions, readiness to deploy all possible resources in pre & post sale activities by boosting the customer confidence level. In such cases, the possibility of price becoming secondary is brighter. However, the SI has to demonstrate his honesty from stage to stage, particularly when the deal size is big.
Lack of exponential growth in their businesses is the cause for why most of the SIs are not very enthusiastic or optimistic of future. While the list is endless, the key challenges that an SI faces or has to overcome are, having good sales force who are go-getters, employing skilled technical personnel, being more of bottom-line centric rather than centric to top line, sizing manpower to fit the needs, ability to invest in business to aspire for growth, backed by financial discipline & have always adequate funnels to rely upon for converting to orders, etc., There is a need for SIs to work more like a consultant during pre-sale stage to give technical insight to the solutions for customer to make subsequent process work in his favor
All said and done, the future of T/ ICS is very bright, particularly in a country like India, where with lot of initiatives and liberalization at the Central Govt level, abundant opportunities are seen both in MNC, private & Government sectors. Besides, most of the other industry verticals are expanding in terms of IT deployment.
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Declaimer: The views expressed are authors own and do not necessarily represent the views of the publication.