Competition Is Biggest Challenge For IT Channels In India

IT channels in India-comprising of hardware and software dealers, resellers
and value-added resellers (VARs)-have pointed to growing competition as their
top business challenge in a latest study by Springboard Research. According to
excerpts from the study, growth generation and poor profitability made up the
second and third biggest challenges reported by the Indian IT channel community.

These findings are based on an ongoing Springboard survey of 400 channel
partners in 14 large and mid-sized cities across India, including Delhi, Mumbai,
Bengaluru, Chandigarh, Jaipur and Secunderabad among others. The survey is
designed to gauge the key dynamics in the Indian channel market with focus on
channel demographics, financial metrics and vendor-attribute importance and
satisfaction.

“We found that while margins and pricing are more important for channel
partners in tier-2 cities, competition is a key overall challenge for the
community in India,” said Tirthankar Sen, Associate Research Director-Partnering
Research, Springboard Research. “IT vendors also need to address poor skills
availability and the lack of infrastructure in tier-2 cities, as these are the
biggest challenges faced by IT channels in these cities,” Sen added.

Springboard's survey revealed that geographic expansion is the biggest growth
driver for IT channel partners in India, followed by increased marketshare from
existing vendors. In comparison, new vendor relationships and service-based
offerings are at the bottom rung of growth drivers reported by the survey
participants. The participants also described margins, timely delivery of
products and a diversified range of products from vendors as the most important
parameters to their organization.

“Our research showed that the environment is definitely slanted towards the
larger technology providers that have the portfolio and the ability to deliver
in India. For vendors, the real opportunity for cost-cutting and growing
revenues lies with expanding their existing channel base, which is eager to grow
its business, instead of following the conventional strategy of aggressive
recruiting of new partners,” Sen said.

According to the survey, the three most important factors driving the vendor
selection by channel partners are brand reputation, product quality and margins.
Credit period, vendor reputation in the channel, and the quality of distributor
are deemed as three least important factors.

DQC News Bureau