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IT Channel Complexities in India
Mature markets are just around the corner in India.
Challenges in SMB (1-250 employees) segment for IT Vendors:
- A lot has changed in the last 10-15 years and channels feel that in next 4-6 years by 2013-2014, about 20% of Indian market is predicted as a MATURE MARKET. Ten years ago the awareness for IT was created, PC was becoming a necessity. In last 6 yrs market has really picked up.
- The India IT market is growing and are looking for big changes. Most of the partners for various MNC brands have recognized the changes and are moving from being mere VARs or System Integrators to solution providers, getting into more of services than selling boxes.
- A dealer who has been selling software for a long time is now thinking of giving the whole solution. In the hardware market the margins are thinning, so the question is - how to make money?
- Money comes from services so channels are moving towards better markets like the Managed Services, Infrastructure software implementation, maintaining the hardware as well as the software. This has already happened in the mature markets outside India.
- One may also witness partnerships here - two big partners merging or two small partners merging forming the equation of 1+1=11 and not 2. Consolidations of various services are happening and some channels are emerging as leaders in the market.
- Business models are also heading towards a big change. The today’s scenario allows any partner to be ‘single vendor dedicated’. As an example if one is HP partner he is still selling & setting up solutions for Cisco/ IBM/ Mac. Channels opine they have to position themselves as multi brand and multi solution provider. Whatever the demand they should be able to supply it.
- The customer is negotiating or dealing with one single partner rather than trying multi service providers. This is one big change that has happened among channels keeping in view the changing perspective of the customers. These changes will help India emerge as a mature market.
Advice in Partner selection criteria:
- It is a very disorganized segment.
- The IT maturity level is very low.
- A lot of patience is required while dealing with this segment.
- The volume business has always been a key concern.
- The principles / vendors only interested in managing bigger accounts as more money/ revenue and less effort involved.
- Instead of choosing many partners, vendors should focus on the selection of partners.
- The partners who are capable should only qualify the selection.
- They should then be trained and most importantly be supported by the vendor to grow and become a bigger partner of that small town or city.
- The corporate clients of a smaller city always lack confidence in the local partners and their capabilities and deliverables. Therefore, a partner from a nearby big city may not be working efficiently but is always looked upon with confidence because of it partnerships & technological capabilities.
- If the vendors succeed in doing the same with the channels of smaller cities, this will surely be an advantage to ALL.
- The small city partners have the best of contacts to explore more business. The only challenge they face is the Bandwidth and proper guidance. The Channel partners feel that the vendor should fully support them.
The government departments are also in the process of implementing various IT related program primarily for the SMB segment(1-250 employees) especially. This is being considered as the most potential segment in terms of IT growth and expansion.
The grey areas are the SMB and the government
- There is and is not awareness about the new technologies among the channels. For example many partners may have only heard about Cloud Computing.
- Channels feel that the vendors themselves should come forward to promote the new / emerging technologies among their partners as well the users.
- There is always a demand for the new technologies and the channels are gearing up themselves for this.
- Channels also feel that today’s customer is obviously more knowledgeable. To cope up with the knowledgeable customers channels have to upgrade their skills and knowledge base. And that is the key to a partner’s growth.
- All the big organizations the ITES/ IT companies and large corporate have their own in-house resources. They have a fully fledged IT department which takes care of all their IT needs.
- Here, the channels only work as suppliers for the hardware and software.
. Here the implementation has just begun and it will take another 4-5 years. Today SMB is the very large and the most potential segment and challenge lies in how to deal with them and their needs. The knowledge level of these companies/ this segment is very low as compared to the International markets and standards. The IT deployment in terms of products and human resource is very low and they are dependent on the IT vendors. A lot of knowledge has to go in educating these segments.
Channel partners are investing heavily in Data Centers but it will take time to develop as all the technologies are new.
The channel partners who are at the local level at Tier III & IV cities overall do not have much knowledge base as the bigger partners in the Tier I & II cities, so they ultimately end up in Box selling. Even the customers of Tier II, III & IV are not well-educated and their understanding level for IT is low. A lot of education has to happen in these cities.
THE IT VENDOR MUST KNOW ITS AUDIENCE FIRST…