Time just flies! We’re at the eve of bidding adieu to the first 6 months of the fiscal 2007-08, which have been marked by quite a few small and big happenings.
While most can pass off as run-of-the-mill instances, some do strike us. When the Budget for this financial year was presented by the Union Finance Minister P Chidambaram and passed by both the Houses of Parliament, the channels didn’t have much hope. Only a few of them set their sight on opportunities coming in from the upcoming segments, like e-governance.
We’ve been doing a mid-term review of the channel network business and as one of our esteemed colleagues rightly put it, “for channels last 6 months may be compared to a lifeline with no dips or peaks.”
But there are also heaps of information on various technological innovations, with Intel and AMD launching dual core processors. The impact it could leave on channels is already being debated. In addition to this, there are other happenings related to these two chipmakers, as much as other vendors in the IT space.
During the last 6 months, the market has witnessed a price drop in many products and vendors also focused largely on SMBs with products tailor made to suit the new bulking army of these customers. Amongst the channel players, I feel happy that value addition continues to dominate the industry as the chief game with distributors laying emphasis on maturing them as Value Added Distributors (VAD).
In the last few months, distributors have in fact gone though pressing times. Hiccups, like a few vendors shunting out and replacing disties, marked the beginning of this calendar year. The ever-lasting debates on the relevance of regional distributors and sub-distributors continued unabated even during the last 6 months, with survivors attributing mix-n-match policy as the crucial survival formula. Retail is another facet, which caught partners’ attention as they realize pretty well that despite the hurdles it’s a key area not only for growth, but also for survival that a partner should ignore only at the cost of his own peril.
Importantly, the last 6 months also saw aggressive posturing by trade bodies from Patiala to Pondicherry against Microsoft for the anti-piracy raids, as they worked on strategies to shift towards Linux. In the coming months, open source will be seen more in action, redefining the contours of businesses in many ways.
My good friend, Raj Rathi, MD of Bangalore-based Cyberstar Infocom, will not waste a moment in saying that mutual share and care is the order of the day and there have been instances when he has held successful round of discussions with principal competitors, like Redington. “Carrying a mixed bag of consumer durables and enterprise products, we create a customer satisfaction through efficient credit management and timely response,” he says.
Disties and vendors also came in for a head on collision when Redington resorted to direct selling in few south Indian pockets. Albeit, the action only evoked strong reaction as Kerala partners convinced Redington s regional executives to do the running to save the day when Cochin-based All Kerala Computer Manufacturers and Dealers Association (AKCMADA) intervened.
Also, as expected, uniformed taxation laws, abolition of Octroi and other favorable tax regimes will continue to figure in channels’ long-term and short-term wish list. The recent Delhi High Court ruling upholding a tribunal judgment allowing 4% Value Addition Tax (VAT) on select IT products has come as a breather for them. The absence of a uniform VAT is already an impediment for the industry.
But to wrap up, I am aware that it s impractical to expect all the issues to be addressed in the next 6 months of the fiscal. No finance minister worth his salt can do it and partners also know this.
The moot point is that partners have to take a holistic view and see that they re in tune with the speed and needs of the changing times. And I am glad that they are — as a number of them are showing an inclination towards value addition with several new twists including the development of specialized software for education and insurance segments.