We are in a period of unprecedented changes to the business climate that will challenge solution providers in ways you have never seen. It's a statement that can and will be written every time there is extreme upheaval in the market.
This may feel different because we are going through it now, but is it
really any more challenging than the 25 percent drop in financial markets we saw following the 9/11 attacks? Or the 30 percent fall-off the following year with the explosion of the dot-com bubble? Or the 45 percent decline that came in the oil crisis of the 1970s?
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What I do know is there are some things that happened then that will happen again in 2009.
First off, there are going to be lots of canceled partner events next year. The costs are high and manufacturers are looking for savings. Instead, here at Everything Channel, we will be investing in our XChange conferences, which are already the largest independently run face-to-face events for solution providers worldwide. We will be adding content, driving more attendees to the show and offering manufacturers an ability to leverage what we already provide partners.
While many manufacturers understand that leveraging the channel in a tough economy is the most cost-effective way to go to market, that won't be universal. Suppliers that don't have well-defined channels or are run by executives with little experience in indirect sales will pull back. Solution providers should watch ChannelWeb.com news closely for signs that your suppliers are going in the wrong direction and adjust your selling efforts appropriately.
There will be thousands of new solution provider organizations formed in the next 12 months. Most of these will be organizations formed by employees who have been let go from IBM, HP, Cisco and dozens of other large high-tech players. I've seen this happen so many times I'd bet my subprime mortgage on it.
Consolidation in distribution is also something we can expect. There's nothing like a tight market to force companies that are well-managed but live in a world of three-point margins to talk mergers. Manufacturers will be squeezing distribution as will solution providers. I have my suspicions about who will gobble up whom, but the worldwide market will be the ultimate decision-maker here.
In addition, we are going to see some huge mistakes made in channel policies. Vendor executives under pressure to make their numbers are going to turn to channel costs and make the mistake of pulling the trigger without thinking it through. In the end, we will see those that make this mistake lose some significant market share before they come to their senses and correct it.
In the end, however, we will exit 2009 with a stronger channel as a result of all this turmoil.
What are your predictions for 2009?
Make something happen. E-mail Everything Channel CEO Robert Faletra