The 2008-09 fiscal year was one of turbulence. This was more so amongst the channel community. In the face of challenges of payments being delayed by customers and sales order books gathering dust, several of the top performing companies had to scale down their growth projections. Quite a few of them even posted negative growth and found themselves out of the August ranking of the top 50 solution providers (SP) and distributors of the country.

The effect of the slowdown reflected starkly in the revenue numbers that the companies in the Silver Club generated. The top 50 distributors together generated business worth Rs 28,152 crore, of which the leading 25 were responsible for billings worth Rs 25,783 crore.

Of course, the actual business transacted will be slightly lower because the distributors bill to the next tier of the channel, anyway. But even if you compare this with the Rs 23,992 crore worth of business generated by the top 25 distributors in the last fiscal before that, it is evident that the business has grown in just single digit terms of approximately nine percent.

Even solution providers did not fare any better. In 2007-08, the top SPs collectively transacted business worth Rs 3,789 crore, while last fiscal the top guns managed to push it up to just Rs 4,293 crore, which is a growth of just 11 percent. But a heartening trend is that most SPs saw more revenues coming in from their services business as compared to their hardware sales.

Three distributors in the Silver Club and Next 25 Club each showed negative growth, while five distributors in all had a flat growth. As against this, a whopping 20 SP companies showed negative growth, while three showed no growth.

What is interesting is that a total of 10 new companies made it to the top 50 rankings of distributors. Even amongst the 50 SPs, nine new SPs clawed their way into the top ranks. This shows that a change of the old guard is afoot.

Change is always welcome and having new entrants to compete with ought to make the old timers in the Silver Club and the Next 25 Club think quicker on their feet. The smaller companies are able to scale up faster than the bigger giants, so the latter need to think of ways and means to overcome this hurdle.

While compiling the Silver Club this year, most of the companies stated that they are beginning to witness a recovery in FY'2009-10. But they have all learnt their lesson and very few of them are targeting growth over 20 percent this fiscal.

This prudence seems to have come from the hard blow that was dealt to their expectations the previous fiscal. Let's just hope that all the other lessons they had learnt during this troublesome period do not evaporate as order books are pulled out of their dusty corners again.

Vinita Bhatia
vinitavs@cybermedia.co.in

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