The channel is the business

It's a part of the tech industry that few outsiders, or
even CIOs or other consumers, get to see up close. Even if a million people buy
from them, at Nehru Place, Lamington Road, and so many other roads and streets
across India. But the channels rule the technology industry. Over three-quarters
of the domestic hardware, services, and software revenues, over $9 billion,
flows through the pyramid of distributors, wholesalers, resellers, and dealers
that make up the technology channels.

The 'DQ Top 20' companies account for half the
industry's revenues, and our main list in Volume 2 of the four-part Top 20
series extends to 200 companies. The recent DQ Week Channel Handbook 2006 lists
all of twelve thousand companies. That's the channels.

Most of the success stories in India's technology market
begin and end with distribution-the channels. HP and Intel are examples of
companies that leveraged the channels to the hilt, building up market dominance
through innovative programs, incentives, financial and tech support, and
education. And when competitors came in, the entry route was, of course, the
channels. Canon took up share by rapidly building up its channel play, initially
aiming for the gaps in HP's portfolio, and expanding to other areas. AMD
finally began to gain share from Intel's 90 percent lock on the market when it
got its channel act together.

HP remains a favorite of the reseller community, and others
are ramping up rapidly on the shoulders of the channels. In a year, newbie
Lenovo quickly reached number two in overall channel satisfaction in the annual
DQ Channels-IDC survey, just behind HP. If the channels are that happy with a
company, the conversion to sales becomes a lot easier.

Thanks to the sheer size and complexity of the country,
almost every major player uses the channels in India, one way or the other. Or
develops its own, such as HCL did, while it evolved into a mega-distributor of
hardware and mobile handsets. Even classical 'direct' players such as Dell
have to use support channels in India.

Investing in the channels today means growing, or
protecting, market share tomorrow. It's a bit like investing in employees:
there are the hygiene factors, things that let them sell your product better:
support, marcom, margins, incentives... But the 'channel makers' go beyond
that, into areas that help develop and strengthen the channels.

Before you can find the answers, you have to know the
questions. What are the channel's pain points? margins? growth? expansion? HR
and retention? training, even for the proprietor himself?

Can you help address them as vendor and principal?

For, how vendors handle and develop the channels today,
will make or break them tomorrow.