Channel Fragility


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Describe current threats on IT channel in EMEA
Prepared by Lemon Operations and Compubase

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Channel Fragility

  1. 1. Current threats that impact IT distribution in EMEA Jack Mandard - Compubase Laurent Glaenzer – Lemon Operations
  2. 2. •  Share a high level view on current threats impacting channel distribution in EMEA •  Share 3 vendor attitudes •  Open up a discussion among the group
  3. 3. Margins Credit risk Hybrid Models Redistribution Changed revenue streams
  4. 4. Gfk WE sales (PC, printers, supplies, software) decline by 17% in Revenues Idc S2: 15% drop in revenues, 10% in units 2009 forecast: from 5,9% to 2,6% US: from 4,2% to 0,9% Western Europe: 1% Gartner 6% in 2012 3 000B revenues shortage +18,7% PC in F. Q3 (Jul-Sep) +23,8% S2 Notebooks: + 42,1% (60% of PC) Desktop PC: -3% Netbooks: +95% (15% of Notebooks)
  5. 5. Financial Crisis Vendors margin improvements Lack of breakthrough technology Reduction of MDF and other Market Shrinks collateral discount Over-
 ASP Drop distribution Margin Reduction
  6. 6. Multichannels Monochannels “Creative”
 Everywhere Direct or indirect only Models No conflict management No conflict Requires strong brand Coverage risk Ex: MS Ex: Apple Ex: Autodesk
  7. 7. •  10-15 credit closure per day against 4-5 last year •  Disappearance rate in Compubase database from 10 to 15% every year
  8. 8. IT Office
 Telecom IT Equipment Vendors Equipment Telecom Virtualization Office
 1st Telecom tier IT Equipment SaaS IP Office
 2nd tier Telecom IT Equipment Customers Customers YESTERDAY TODAY
  9. 9. IT & Telecoms Digital Home •  Germ Europe’s Big 5 Distribution Organization any •  UK •  Franc e •  Italy Vendors 30% use the •  Spain Manufacturer Software Publisher Indirect channel Strong Distributors (packaged software) Clients 54% use the Weak Indirect channel ISV Software sold through 23% use the Indirect channel a license mode Overseas Telecoms Distributors - Broad liner Distributors Operators 17% use the Large Indirect channel Consulting Company Overseas Specialized Regional or Large national IT Master dealers Distributors Sub - Dealers VARs Sub Distributor Distributors & Dealer Mass Retail Distribution Ind. Retail IT - Assembl Systems & Local Local Software Non IT IT & IT Dealers Telecoms VARs Telecoms Integrators Consult ers specialist Retail e-Tailer ant Integrators Services IT Super Dpt. Store Hyper Store market Individuals SoHo Lower SMB Upper SMB Local Mid Market Large Firms Public Services Very Large < 10 empl. 10-50 empl. 50-250 empl. Authorities 250 – 500 500 – 2500 Central Accounts empl. empl. Administration > 2500 empl. © compuBase 2008
  10. 10. •  Average age at creation: 39 •  People having created their Company in 1984 are now 63 •  Vast majority of family owned Companies •  Huge consolidations expected
  11. 11. •  All analysts maintain their long term forecasts (IDC 6% Ww) •  Breakthrough technologies should hit the market in 2009/10 (internet, printing,..) •  Increase of Companies shifting from direct to indirect (Dell, PTC, Bentley, ..)
  12. 12. We donʼt care… We protect ourselves… We heartily care…
  13. 13. •  Our exposure is minimum as most of our business is done through wholesalers •  It will clean the market, only the best ones will stay •  We keep focusing on end-users communication
  14. 14. •  We identify where are the weakest spots in our channel •  We build an ad-hoc strategy for each of them (help or leave) •  We cautiously monitor our partner performance to proactively address the red dots
  15. 15. •  Channel loyalty is a key factor of our strategy success •  We coach our channel for them to build a successful business •  Their success is our success •  We build a multi year channel vision that help us and our partners be where we want to be
  16. 16. •  Do you see other threats that havenʼt been mentioned here? •  Are you proactively driving channel transformation in your own business? •  Which of these attitudes characterizes your Company?