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As the SMB sector in India grows to adopt new technology initiatives, most of
the leading IT vendors are eager to increase their share of the spoils. In this
endeavor, channel partners are likely to be their most important allies. Their
partners are instrumental not only in increasing sales to the SMB customers but
they also provide vendors with valuable inputs about client mindsets and
preferences, thus helping them customize their products for this sector.
The above findings were released by New York-based Access Markets
International (AMI) Partners, Inc., a consulting firm that specializes in IT,
Internet, telecommunications and business services market intelligence, with a
strong focus on global small and medium business (SMB) enterprises. AMI-Partners
conducts annual tracking surveys of SMBs in more than 20 countries.
VARs comprise the majority of the channel partner universe, both in terms of
number of businesses and revenues. This is a further confirmation that the prime
requirement of SMBs from their channel partners is timely sales and support for
basic IT products in the computing and networking arena.
India channel's businesses are closely linked to the country's economy.
As a result of booming growth, three fourth of India's channel experienced an
average revenue growth in the past year. With the anticipated boom in IT
spending, partners are optimistic about their future earnings and anticipate a
substantial 19 percent increase in revenues in the next 12 months.
An overwhelming majority of channel partner revenues are generated locally
(from customers located in the same city/town). Only five percent of revenues
are generated from customers located in another state. Approximately
four-in-five of the channel members operate from a single location only
indicating sufficient scope of future expansion. However, larger organizations
(with over 50 employees) have the propensity to be more distributed and function
from three to four locations, on average.
Channel partners service a diverse mix of customers - a typical partner
derives 46 percent of revenues from small businesses, over a fifth from medium
businesses, and another fifth from consumers. The majority of India's channel
partners generate sales from repeat customers indicating that channel partners
make an effort towards building up a long-term rapport with their customers.
Making the right choice
India SMBs are often strongly influenced by the channel when selecting
between different brands of IT products and services. In general, partners exert
most influence in the computing hardware arena followed by networking hardware
and software, and then servers and storage. They exercise lesser influence in
the Internet and software categories. System/network integrators are the most
influential partners for India SMBs and exert brand influence over a wide gamut
of IT purchase categories.
Additionally, in emerging markets like India, partners play a vital role in
educating less IT-savvy SMBs about various aspects of IT purchase and usage.
These businesses lack sufficient knowledge about IT technicalities and
consequently depend on the channel for guidance.
A huge majority of channel partners resell mostly simple and essential
computing products such as desktops, portables, printers, peripherals,
networking hardware, anti-virus software and third-party packaged software.
However, in the next 12 months, channel partners plan to increase their bouquet
of product offerings to the SMB sector by expanding into the following products
such as PDAs, internally developed software for resell, networking solutions
(i.e. WANs), outsourced IT support, etc.
Judicious selection of vendors
Channel partners evaluate their vendors after considering various factors.
"They would like to build up a stable, long-term relationship with vendors
who have high-quality products/technologies," commented Swati Sasmal,
Research Manager at AMI-India. "Providing quick pre- and post-sale support
by vendors is also a must for most channel partners. A few other factors that
are given significant weight by partners while choosing vendors are attractive
gross margins and the option of testing out a product before offering it to
customers."
The Indian channel rates Intel, Samsung and HP as the most popular global
vendors along with several local players. This finding is synonymous with the
results of the Channel Choice Awards that DQ Channels has constituted for the
past two years.
Among various marketing tools, channel partners favor means of promotional
support like literature, advertisement, giveaways, as well as referrals and
vendor financing. They would also like to avail the opportunity of co-branding
with the vendor that can help them enhance their brand equity.
Judicious selection of vendors Channel partners evaluate their vendors after
consiÂdering various factors. "They would like to build up a stable,
long-term relationÂship with vendors who have high-quality products/techÂnoÂlogies,"
commented Swati Sasmal, Research Manager at AMI-India. "Providing quick
pre- and post-sale support by vendors is also a must for most channel partners.
A few other factors that are given significant weight by partners while choosing
vendors are attractive gross margins and the option of testing out a product
before offering it to customers."
The Indian channel rates Intel, Samsung and HP as the most popular global
vendors along with several local players. This finding is synonymous with the
results of the Channel Choice Awards that DQ Channels has constituted for the
past two years.
Among various marketing tools, channel partners favor means of promotional
support like literature, advertisement, giveaways, as well as referrals and
vendor financing. They would also like to avail the opportunity of co-branding
with the vendor that can help them enhance their brand equity.
DQW News Bureau
Kolkata