Reseller fatalities remained close to highs not seen since the dot-com bust as small generalist dealers and independent retailers succumbed to economic pressure. Figures from credit reference agency Graydon UK showed that 89 channel firms went under in Q1, edging up from the 88 firms that hit the skids in Q4 and 17 per cent …
They have to 'compete' with the parent company which handcuffs the reselling pricing structure whilst advertising its own special offers & low prices to all and sundry in a 'bend over & enjoy the red hot poker' relationship.
Isn't this simply a case of eliminating the middle men and flattening out the supply chain? It has seemed inevitable for a while.
They did it to themselves
Long, long overdue in my opinion. So many resellers have for years been operating a "hit and run" business, model and don't add any value with customisation/coding/integration.
Want an extra module coded? Some import/export widget for the software you are buying? How about a zero-downtime migration from old to new platforms? More-often-than-not resellers aren't able to help, or end up trying to blag a free engineer from the vendor to do the work and then charge the end customer for it!
My advice, go direct to the vendor at end of quarter, if that doesn't work just get 3 quotes and tell the least irritating reseller the price you feel like paying. They are doing deals at any price these days. Offering to pay <30 days also works wonders once you start talking to their credit and collections people.
Goodbye shiny suited box shifters, we shall not miss thee.
The problem is...
Management. They don't have a f*cking clue.
Piss poor management accounts for 90% of all companies going under.
Inability to make decisions
by the companies the resellers were trying to sell to.
I worked for one who went under in 2009/10. When the Banking crisi hit most companies were were doing business with suddenly stopped either - renewing the support contracts or even worse deciding to put All new business on hold.
Suddenly the income stream dired up almost overnight. The SME business area simply does not have the cash in the bank to survive this sort of event. AFAIK, only 1 reseller in the area we were survived until 2012. Even now, that company is down to less than 10 staff.
Middle managememnt in their target market is unable to make the purchasing decisions they one did. I know of one FT500 Company where all purchases over £10K have to be approaved at Board Level.
Anon because my current emloyer is about to go tits up. not because of financial mismanagement but all of our key clients have made the decision to move all IT support to India despite us offering deals which make Indian support look expensive.
finance directors see this as a was of showing the BOD that they are doing their bit in saving the company money despite the fact that one of them has at least £1B in the bank (as per their last published finalcials)
"weak by historical standards but more firms are looking to invest to grow"
As far as the UK is concerned the above quote is best interpreted as:
The Treasury, Whitehall and the DWP in particular prefer organisations (large, medium or small sized) or single traders to soldier on for as long as possible inevitably closing the business due to - well, no customers really.
By soldiering on as long as possible organisations will depleted any savings or monies banked by the organisation and possibly the at risk wealth of its directors.
This is important as any statutory benefits paid may impact upon Treasury plans to allow itself a wage rise next year?
hmm, i can't quite agree with the sentiment that resellers don't want to add value - alot of this smash and grab type behaviour has also been driven by the end users themselves.
Alot of the public sector buying frameworks in particular stifle the ability to add idea's and value, or even a different way of doing things, and just concern themselves buying at the lowest cost from whoever the hell can give it to them.
Part of the problem is that IT infrastructure has increasingly commoditised over the last couple of years so where people can add value has become very blurry.