SINGAPORE, 5 DECEMBER 2008– IT channels in India find growing competition as their top business challenge in a new study by Springboard Research.
IT channels in India comprise of hardware and software dealers, resellers and value added resellers (VARs).
According to excerpts from the study by the IT market research firm, growth generation and poor profitability made up the second and third biggest challenges reported by the Indian IT channel community.
The research firm said that its findings are based on an ongoing Springboard survey of 400 channel partners in 14 large and mid-sized cities across India, including New Delhi, Mumbai, Bangalore, Chandigarh, Jaipur and Secunderabad, among others.
The survey is designed to gauge the key dynamics in the Indian channel market with focus on channel demographics, financial metrics and vendor-attribute importance and satisfaction, said Springboard.
“IT vendors also need to address poor skills availability and the lack of infrastructure in Tier-II cities, as these are the biggest challenges faced by IT channels in these cities,” said Tirthankar Sen, associate research director - partnering research at Springboard Research.
Geographic expansion the biggest growth driver
According to Springboard, its survey revealed that geographic expansion is the biggest growth driver for IT channel partners in India, followed by increased market share from existing vendors.
In comparison, new vendor relationships and service-based offerings are at the bottom rung of growth drivers reported by the survey participants, said the research company. The participants also described margins, timely delivery of products and a diversified range of products from vendors as the most important parameters to their organisation.
“Our research showed that the environment is definitely slanted towards the larger technology providers that have the portfolio and the ability to deliver in India,” Sen said. “For vendors, the real opportunity for cost-cutting and growing revenues lies in expanding with their existing channel base that is eager to grow its business, instead of following the conventional strategy of aggressive recruiting of new partners.”
According to the survey, the three most important factors driving the vendor selection by channel partners are brand reputation, product quality and margins. Credit period, vendor reputation in the channel, and the quality of distributor are deemed as three least important factors, the survey results revealed.
