In the last one year, when economy was down and it was getting harder for the sub-distributors to push their boxes, the recession acted as a learning opportunity for them to expand their business dimensions.

Six months back, PL Suhasaria, Owner, Caltron, a well-known sub-distributor in the Eastern market, started a new division for providing system integration in the region. Also, Rajarshi Ghosh, Executive Director, Epitom Networks took the decision to enter into the domain of providing IT solutions in wide area network, security and surveillance. VK Malhotra, Owner of Delhi-based Agmatel is also planning to enter into the solution business, expanding his profile from a regular sub-distributor.

This seemed feasible as innovating and incorporating new challenges in the existing business line was said to bring diversifi­cation. Moreover, at times, risks taken act as fuel to increase profitability of a company. And so, contemporary times saw many channel partners in the distribution business opt for the risk. They came out of the box pushing shell and entered into the solution space. They identify solution providing as need of the hour as it has been evolving. Moreover, any new technology, trend or market demand surely brings new opportunities for the players in the domain. In the process, they aim to capture a strong position among the customers, while also managing to mint profit in all circumstances.

Need of the Hour
Recession surely acted as a learning opportunity for sub-distributors to expand their business dimensions. It was realized that, having an exposure to both distribution and the solution space would help the partners get business deals on a consistent basis even when the market condition was not favorable. This was witnessed in the period of slow market when even though the sales had dipped, government continued to be a potential IT buyer.

“The government, considered as a potential client, also opts for bidding to get the solution and this further raises competition among the solution providers” Pradeep Biyani CEO, Suntronic	“We realized that if we need to continue to harness profitability in the market, we need to take risks and explore something better and challenging” VK Malhotra Owner, Agmatel	“It is high time box pushers diversified their business towards system integration. We ventured into this domain, couple of years back. It is an absolutely new ball game” Rajarshi Ghosh Executive Director, Epitom Networks

“The main reason for venturing into this domain is that there is no money in the distribution business since the competition is so high. We realized that if we need to continue to harness profitability in the market, we need to take risks and explore something better and challenging. Adding solutions in the existing product line would help us in getting a better reach in the market,” said Malhotra.

In the sub-distribution business, channel partners have to interact with the resellers and their work involves pushing forward the boxes. Considering the phase of economy slow down when the market was badly hit and the sale had dipped, the time has come when partners in distribution business have to think beyond box pushing and diversify their business. Unlike the distribution business, where partners have to just meet their sales target, solution providers have to interact with the end customers and have to add value to the products.

“It is high time box pushers diversified their business towards system integration. We ventured into this domain couple of years back. It is an absolutely new ball game. The methods of handling the end customers are totally different. Customers look for solutions that have added value in them and provide considerable return on investment,” mentioned Ghosh.

Through solution providing, partners get the opportunity to interact directly with the end customers. They come to know the requirement of the evolving technology and it is much more challenging and profitable. This gives a stable position and high recognition among the vendors as well as the end customers.

Challenges Involved
Venturing into solution space from distribution business sounds very exciting and potential but the path is not as smooth as it sounds. Here, the partners have to work in a complete new environment and ways to handle customers are very different. The solution providers have to cater to multiple vendors with different technology and to customers with different solutions. This requires a set of skilled manpower, who have the knowledge of picking up the latest technology. Besides, retaining the trained manpower is another big challenge for the partners who have just entered into
the solution business. There is higher profitability in solution business but that solution has to be offered by set of employees who have the knowledge of delivering the solution in the right manner. Considering the rate of attrition at all levels, retaining manpower is one of the major challenges that partners have to face.

Mentioning the challenges involved in a solution business, Pradeep Biyani, CEO, Kolkata-based Suntronic says, “In regions like East, customers consider services to be a part of products and take the value addition of products for granted. They do not give high appreciation to the solutions offered. Also competition is high in this industry. The government, considered as a potential client, also opts for bidding to get the solution and this further raises competition among the solution providers. Hence, one has to be careful and innovative enough to survive in the business.”

A Cautious Move
A channel partner should have knowledge of the business and an understanding of the technology involved in the solution. For providing a value-added service to the customers, team work is very essential as also the skills of the employees to understand the technology. A partner who has been into the distribution business needs to do thorough groundwork before he ventures into the new domain. Above all, a sub-distributor, who is venturing into the new space, should understand the requirement of the market. He should be aware of his potential, capabilities and resources to deliver the solution in the contemporary way to the customers.

Amrita Tejasvi
amritat@cybermedia.co.in

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