Be prepared for the change
Time was there when the channel business was only associated with the hardware selling – meaning selling motherboard, mouse, keyboard to start with and later on PCs, storage and networking devices. Then around 20s they started selling the packaged software like antivirus or some accounting software but post 2005 saw outbreak of partners from the traditional business and foraying into software business aggressively though the number was few and far between. This was for those partners who wanted to make more margin. However, today the market has provoked the partners to plunge into software business in order to survive in the IT business leave aside margin as the hardware business has completely become the game of stock and sell with nanothin margin.
The market shift has not only been due to the changing requirement of the customers but also due to the changing strategy of the products vendors. The traditional hardware vendors have adopted software business very aggressively. Some very large companies like Cisco, HP, EMC, NetApp, Avaya, every company have adopted a software strategy and trying to establish software channel as well.
In early 2015 the message that partners should adopt software business was heard loud and clear in partner conference of Cisco in Montreal where the then CEO of the company John Chambers screamed on the top of his voice that Cisco is started a software channel programme and the partners should look at this business seriously. Before this in 2014, EMC Chairman and CEO also announced from the gigantic stage of hotel Palazzo, Las Vegas, that their products are available in software format and can be used in generic hardware for better cost economics therefore the partners and the customers should watch out for this move. Not very long, in November at hotel Venetian, Dubai, Nidal Abou-Ltaif, President Avaya for Europe, Middle East & Africa (MEA), and Asia-Pacific (APAC), announced that all Avaya products will be available in software license format from mid-2016 and Avaya is a software company, which Cisco and EMC had earlier said. This suggests that the margin pressure on the large vendors is also equal and they want to decouple software from the hardware and make the business better.
On the other hand, printer companies like Xerox, Canon and others were seen making foray into storage and content management. However, yesterday Konica Minolta in India launched ERP for the education segment by the name Educo ERP, which really raises eyebrows and pretty indicates the need of the IT business today and this is not only applicable for the vendors but also for the partners. So be prepared for the change.
