IT hardware trading: a viable model?

Is IT trading in the regional channel still a viable business model?

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IT hardware trading: a viable model? ((ITP Images))
By  Manda Banda Published  March 13, 2014

Is IT trading in the regional channel still a viable business model?

Despite repeated calls by IT vendors and distributors urging their partners to change their traditional focus on hardware reselling in favour of a value driven software and services business, many partners in the region have been reluctant to heed this call.

With margins on hardware in decline, one begs to ask if IT traders that are still surviving on reselling IT boxes have a sustainable model that has a future and role to player in the emerging knowledge economy in the Middle East region.

While there are several factors at play not least, the long standing historical background of the Middle East’s role in the global trade and commerce, it is the lack of enthusiasm to innovate in the face of an IT market that has brought painful disruptions for IT traders that has raised concerns from channel stakeholders.

But what is behind the channel’s resistance to embrace solutions? Isn’t the writing on the wall clear that the double-digit margin days seen at the peak of the industry are a long-gone era?

It’s no secret that the mentality among partners in the channel has been on box pushing, but for how long will this model sustain their businesses and survival in the market?

The changes that the IT channel has witnessed in the last few years have led me to believe that partners’ lack of interest in embracing change has to a larger extent contributed to the regional channel stagnating.

Granted, there is a growing number of resellers that are doing a commendable job in providing solutions-centric services. However, traditional resellers coming from an IT trading background are still finding it difficult to make the transition into the value solutions game. Without placing blame on distributors or vendors, it’s essential for IT traders to understand the market dynamism and changes taking place for their businesses to still have a role to play in the emerging knowledge economy in the Middle East. Doing so, will ensure their long term survival, but most importantly, contribute to the channel maturity that this region needs.

1821 days ago
MR. RAJ

The Article is very Much true as we ourselves an IT Solution Provider for Past 18 years - see the Massive change coming in Few years as No More box movement -- it will be some innovative solutions required to sustain the Pressures of the Market.,

1821 days ago
HARI K.P.K

The trend is very clearly as has already happened in India. Nobody is going to change. some of them will survive by increasing the volumes which is the what the large format distributors would encourage. The rest will start eating in to the capital to survive which in turn will result in more defaulters. There will be more meeting and seminars to be organised by Channel organisation and media as to how to avoid all this with no results

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