Clock ticking on the traditional reseller approach

The clock has been ticking on the traditional reseller model for quite some time according to those that take the stage at industry events and talk of 'the need for change' and lay down stark warnings about 'the death' of the box shifting players.

There has been a transition and more resellers gain their revenues from services, but there continues to be a number that operate models that would not look too unfamiliar in the 1980s or 1990s.

For those resellers the warnings are being sounded again and this could be the year when the pressure becomes too much for some.

“2018 has witnessed even more high profile channel and high street names disappear, which leaves a vacuum for others to fill in 2019,” said Phil Jones, managing director of Brother UK.

“In the IT space, consolidation continues and we may see international M&A activity increase in the months ahead," he added.

Last year saw plenty of merger and acquisition activity and that trend has already continued into 2019 with TIG picking up netConsult.

Jones warned that those that have not taken steps to add services to the mix will come under pressure from greater competition and commoditisation.

“This could cause problems for independent resellers that haven’t protected their customer base by moving to a more service-based business model,” he said.

Karl Roe, VP of services and cloud at Nuvias, agreed that, “the tradition of simply reselling products is no longer enough to create real customer value and a successful business.”

The role of the channel is changing, he added, “to reflect the need for true systems integration, in terms of connectivity and user IT systems”.

With the year one likely to be dominated by more talk of digital transformation, AI, machine to machine learning and IoT those partners providing integration and a rounded solution are in a strong position.