Channel shake-up with packaged services – IDC

Channel shake-up with packaged services – IDC

Research firm IDC is predicting the emergence of an ICT services channel that will change the shape of the technology services market and intensify competition within existing channel structures.

In its Top 10 list of predictions for 2008, IDC claims the unavoidable scenario of having to service the SME population through enterprise scale models for IT services and telecommunications players is worsening.

According to the report the burden of lead generation, sales and supporting SME customers is likely to be the strongest driver towards the development of a robust services channel.

IDC country manager Amit Gupta says resellers will need to be smarter and find a way to package services.

“There is going to be a lot more competition in the SME segment and resellers need to be more agile. There are going to be new players in that space.”

He declined to mention any new players by name, but says IDC has some top tier operators it is watching.

In order to compete, resellers should align themselves with service companies, says Gupta.

“For example IBM and HP have product resellers, but the companies also have a services arrangement. If a reseller partners up with a services company they can then offer a higher value of service.”

Gupta says resellers should diversify by taking on telco or unified communications services.

“If they want to step up growth then resellers will need to differentiate themselves. But this should be within the realms of their existing business models.”

Virtualisation and complying with future ‘green’ IT requirements are also important, he believes.

“There will be compliance for green IT, so by partnering with a service business the reseller has access to more energy-efficient PCs.”

The drivers behind employing a formal channel structure include increased sales scope, geographical play and streamlining delivery, says Gupta.

“Small resellers are going to be the key for multinational companies to service the local market. For example, instead of having multiple resellers in one area, a multinational company could employ the top reseller in Tauranga and replicate that model throughout the country. Gen-i, which owns the former Computerland franchises, is a good example of a formal services channel.”

He says companies that have a limited presence but a strong channel will benefit.

“A good example would be HP and its local printer business. HP provides all the sales and marketing support, but the channel partners have the sales force and the delivery capabilities. HP provides a platform of success for the resellers and that’s the same model you can replicate across the services market.”

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