Making the recession pay

Making the recession pay

A Wanganui IT shop recently profiled in Reseller News made the startling admission that a move to selling kites salvaged its business because they sold faster, and at a higher margin, than computers.

Fewer dollars circulating in IT sales and competition on price are symptoms of the recession. Some consumer electronics products are hundreds of dollars cheaper than they were this time last year, while bundles abound.

Others symptoms of the recession are industry contraction with mergers and acquisitions, and a reduction in the staff and resources multi-nationals are prepared to invest locally.

Big North Asian tech manufacturers are suffering what in some cases are unprecedented losses. The flow-on effects are felt here, with senior vendor staff in New Zealand or Australia moving to Asia Pacific roles, and a growing emphasis on frontline sales staff to hold the local fort. Marketing support and technical backing is increasingly provided offshore, too.

A diminished local vendor presence often sees distributors stepping into the breach.

But with recent acquisitions such as those made by Ingram Micro (of Valued Added Distributors and the planned buyout of Vantex) and that of MEC by Comworth Group, mean there are fewer organisations in the New Zealand distribution sector. Distributors have also suffered at the hands of negative exchange rate impacts and lower margins in a number of product categories.

These trends place more emphasis on resellers to serve strategic markets in New Zealand, and put an onus on vendors and distributors to recognise their importance in recessionary times.

Economic conditions are threatening the existence of some smaller, regional firms — many have considered whether the savings made by operating a home-based business will still allow successful trade.

But for resellers serving markets from the small business to the enterprise, there are still opportunities to provide specialist consultancy to organisations considering transitions to new technology, or those wondering how best to make the most of what they already have.

Converged IT/telco offerings are increasingly in the spotlight as Telecom and Vodafone’s new networks come into play, and their new competitors hit the market.

These ventures provide broader scope for enterprise mobility and IP-based services, including notebook, handset, card and data packages. 3G networking gear will also come to fore as organisations ensure their technology is compliant.

Software that is traditionally the domain of larger firms is pushing down into the mid-market, with a trend towards cut-down version of enterprise applications designed for business productivity (including ERP and CRM). Local Microsoft and SAP partners are already creating offerings that give mid-size organisations the core of such systems, at a reasonably set price, scalable to cater for growth.

The opportunities presented by PC-based Point of Sale systems and the capture of data by field forces is evidenced by the number of organisations seeking a slice of the pie. In the Asia Pacific region, these include Ingram Micro, HP, Vantex and Oki.

Infrastructure consulting will be in hotter demand with the impending advent of Microsoft’s new operating system, Windows 7. Corporates still on XP, and those who trialled Vista, will be evaluating the new OS for business payoff.

Storage and datacentre capacity, coupled with the need for efficiency and sustainability, are key issues on which resellers can give advice.

The recession will claim some among the channel, but as greater responsibility falls on resellers to serve local markets, so do the opportunities to strategically achieve success.

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