Are SPs always the losers in confederations?

As the mood
for confederation of IT associations across the nation continues to
gather momentum with href="http://www.dqweek.com/Confed-ITA-summit-at-Kollam">Confed-ITA
eager to launch its Stand On Our Legs
(SOUL) project and href="http://www.dqweek.com/Fiesta-is-now-CIITA">Confederation
of Indian IT Associations href="http://www.dqweek.com/Fiesta-is-now-CIITA"> style="text-decoration: underline;"> (CIITA)
taking off in the eastern region, finally the channels seems to be
unifying but on a regional note.

The trend
set
in with most of the channel partners asking for a full-fledged strong
governing body for the channels spanning across the country to
address their demands, grievances and develop the business tempo.
Further, the scenario is fueled by some leading vendors like HP,
Dell, Lenovo and most of the lot are opting to go for the exclusive
regional distribution model. This has led to 'regionalization'
of IT distribution.

Speaking on
the trend, Anil Jagasia, MD, Savex Computers said, “Regionalization
with exclusive distribution rights is the new evolution in
distribution. Although it limits the scope for pan India expansion,
it also opens up an altogether new market for the distributors,
particularly, class D and E cities.”

“Besides,
vendors are now asking their distributors to be more responsive as
well as responsible for the distribution part. Now, the work of
distributor is no longer limited just to distribution,” added
Jagasia.

In the
backdrop of regional channel sentiments with the vendor dictum to its
distributors is to work regionally, IT distribution model now seems
to be on the fragmented mode. Although the benefits and limitations
of the new trend have been vigorously debated time and again, some of
the major vendors like Dell and Lenovo have been quite successful in
keeping the critics of regional distribution model quiet.

However,
this
bifurcation and the onset of the new 'unifying' trend have little
to offer for the solution providers (SPs), particularly in the less
developed regions.

East India,
for long, has been looked upon as a lesser competitive market with
product and monetary movements still vying to be at par with the
'developed India', comprising other three regions.

Recently
with
the formation of CIITA in eastern India, channels are optimist about
the business tempo and vendor anomalies being addressed. Also, the
unification of associations may give channel partners a better hand
in dealing with the vendors and distributors. But the need and
efficacy of the confederation needs to be probed. Expressing his
views, Manoj Rathi, director, Diamond Infotech said, “CIITA may
definitely benefit the distribution and reselling segment besides
enhancing better communication in the region. But I don't think
that it may be of any other benefit to SPs.” Indeed, true to the
fact, the contribution of the confederations towards SP business
needs to be probed.

In the
impending SOUL project, its implementation is clearly marked to
benefit the Confed-ITA members in Tamil Nadu but it has narrowed down
to the distribution and reselling segment. In this project, it is
being projected that the vendors and distributors have agreed to
charge 0.1% extra on the first billing, which the dealer will
further charge from the end-customers. The accumulated fund will be
used for the welfare of the Confed-ITA members. In this process,
there is a serious doubt as to where the SP comes into play.

A closer
look
into the formation of the CIITA and the plans thereof also marks the
same observation. CIITA has declared to implement its first
collective attempt to ask vendors to come up with their DoA and
warranty policies with the objective to bring more transparency in
trading. However, the benefits and efficacy of DoA and warranty for
the solutions business is still dubious.

“I don't
see any direct business benefit for solutions business even if the
vendor comes up with their DoA and warranty policies,” said Rathi.
Hemant Chabria of Chabria Infotech said, “DoA declaration might
bring in more clarity in business but so far, I cannot foresee any
direct business benefit.”

With
Infotech
Software Dealers Association (ISODA) already addressing a part of the
solution business' woes at the national level, the need for
regional redress seems to be overlooked. “ISODA is already handling
the issues which are indirectly related to solutions business, but so
far, there hasn't been any dedicated move from any associations or
confederations for solution business exclusively,” added Chabria.

Till date no
association or confederation has addressed any issue directly related
to solutions
business, only respite for the SPs is the scope of networking and
flow of technology across the state.

Explaining
the same, Rajesh Dora of Printlink Computer and Communication said,
“With CIITA
coming into effect, we can now share technology among the members. As
technology and its know-how is the most crucial element for
solutions, the formation might enable us to learn and share
technology and solutions in a better way.”

Here, it
needs to be mentioned that most of the leading vendors are already
conducting certification and related technology courses across India
for partner enablement which in turn is supposed to be enhancing the
flow of technological prudence.

Apparently,
it seems that the dual confederations in the nation have only one
purpose and offering for the SPs, which is 'networking'. Majority
of SPs across the East have unanimously agreed to the fact that a
confederation will open up a broader networking space for them.
However, confusions and doubts continue to echo about the efficacy of
the confederations as a direct business need, mostly in the metro
markets.

However,
particularly in the East, SPs in class C and D cities are optimistic
about the tangible benefits of the confederation. Akhilesh Kumar of
Kailsumi Infotech, mostly catering to the enterprise segment said,
“CIITA may provide us with a much needed platform to raise issues
at a bigger level. Already we are facing issues like lack of
credentials and 'norm factors' while bidding for tenders, both
for the corporate as well as the government level. I am planning to
raise this issue in the next CIITA meeting.”

Further,
stock availability with the distributors, particularly at the
upcountry and rural markets has been a concern, not only for the
resellers but for the SPs as well. “Often the project gets delayed
as a result of non-availability of all the required products at
proper time. There needs to be a policy whereby the distributors as
well as the vendors can supply us our requisites in due time,”
concluded Kumar.

As pessimism
continues to rule the mindset of SPs in the 'confederation regions'
with
negligible benefits derived for the SPs, both Confed-ITA and CIITA
needs to reconsider their approach in the channels and formulate at
least some policies with tangible benefits to the SPs.