> A statistical study on ICT channel organisation
> A country-by-country focus
> Essential business resources

This report provides channel professionals with a complete analysis of the IT & Telecommunication Channel in EMEA.

To download the report, please click on the Acrobat link below

Analysis of European distribution
Do's and Don'ts in Europe
European and MEA statistics per country
Trade definitions
Channel organization charts
EMEA distributor studies
Channel partner volume estimation
Volume of profiles in the EMEA - Distribution models and trends

European ICT distribution statistics and analysis
General, Channel and Products

Country-by-country analysis
Western Europe, Southern Europe, Northern Europe, Eastern Europe, Africa & Middle East

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Soon available.
- How to create your channel?
- Why going Indirect?
- Channel chart organization (subject to identification).

Soon available
- SaaS and ASP channel market (subject to identification)
- Virtualisation channel market

- The Hungarian Market
- France by region analysis - in French (subject to identification)

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• To help Channel Marketing Managers explaining or understanding the Organization of the IT Distribution Channel.


NB:
• Charts are to be used for internal & external presentations.

• The flows between partner categories are not indicated, as they vary a lot according to the products, markets and companies.


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According to a survey undertaken by compuBase (see diagram below), 26% of the persons surveyed declared HP was the manufacturer that has to fear the entry of Dell the most, followed by Acer and assembly companies.

HP is Dell's openly declared target as well as the company with the widest distribution network. It is thus entirely logical that it is the primary target. Acer, which has grown enormously these last few years, also seems to be a potential prey. It is more surprising to note the companies that are not often named, such as Lenovo or Fujistsu, which both have large distribution networks but were not thought to be threatened by Dell by the persons surveyed.
One thing is certain: Dell's potential in indirect marketing is valued at its true value and only 18% of the persons surveyed think that Dell will fail in its project.

Study carried out among 133 persons via a Web survey before Dell's programme was
announced.

The attack is far reaching.
Who are Dell's future partners?
The first question consists of knowing whether Dell will be able to break up the strong or even exclusive relationships that traditional manufacturers have established with their major partners to its advantage.
For the latter, the task will surely prove difficult in view of the strength of the relationships among major manufacturers and their top partners. In this respect, Acer will probably be more threatened than HP, because HP's very wide range allows it to have a solid negotiating position.
Dell will undoubtedly take advantage of the high growth of computerisation among SMEs to play the role of intermediary partners, and slip in between an HP, which has a substantial number of strategic accounts and Acer, which is much more present on the low-end market.
Traditionally, Dell has always had an indirect sales network, which is mostly made up of VARs and ISVs whose business model is not linked to the sale of equipment but that wish to provide a complete service, which includes the sale of systems.
In its advertising campaign, Dell announces 30,000 partners worldwide. We should take a closer look at Dell's definition of a partner to have an idea of the reliability of these figures.

• In Europe, compuBase finds 3,186, or an 8% share of referenced partners that market systems. A study of the latter shows that 85% of them are above the € 35,000 limit defined per year (study of TO in system sales).

• In France, compuBase finds 700, or a 7.5% share of referenced partners that market systems. A study of the latter shows that 76% of them are above the € 35,000 limit defined per year (study of TO in system sales).

Study carried out during the period 2004-2008. compuBase Europe database that includes 115,000 IT
partners, of which 41,000 distribute systems (PC, servers, laptops, etc.).

The others will probably not leave Dell, as their approach is not linked to the margin generated by system sales but more to simplifying the whole of the selling process. This last point is, in our opinion, the most interesting point, and one that is probably still underestimated by competitors.
Dell's current distribution network was built, in spite of it, on commercial opportunism. We should question the primary motivation that leads a reseller to selling Dell products while Dell has openly argued against the usefulness of resellers in hardware distribution for a long time.

One of the reasons is found in the transfer of value added from hardware to services, which makes each reseller or VAR less dependent on the PC sales account, and, the lower margins are, the more the partner has designed its strategy on product or service sales with high value added.
Because profit has become so ridiculous that it has been “eaten up” by selling or logistical costs, the reseller that had lost all hopes of seeing margins increase is now intent on decreasing the cost of sales in the “PC/Laptop/Server” account: margins for sales representatives, logistics, collection, etc.

For many partners that have a service-oriented business model, Dell has substantial advantages.
- No need to negotiate with the customer as the price is set by Dell. The customer no longer needs to look for the least expensive product, and the reseller saves time and decreases its discount rate.
- Withdrawal of the “hardware sales” account from objectives and commissions of sales representatives. This pushes sales representatives to selling the most profitable activities while maintaining the possibility of supplying hardware if there is a demand for it.
- Disappearance of financial risks, which are managed by Dell.
- Ease of placing an order and monitoring it.
- Disappearance of logistical costs.
- Possible maintaining of the Distribution TO in the overall TO of the company, which avoids showing a decrease in TO in spite of an increase in gross margin.
- Less worries linked to maintenance, which is partially handled by Dell.
- Direct contact with the manufacturer, which is often requested by resellers.

Another question that has arisen because of Dell's arrival is the position of wholesalers, or rather the absence thereof. The wholesaling business consists of supplying logistical, and financing services, a coherent product catalogue and marketing support to the manufacturer.

All these tasks can be handled by Dell, which knows perfectly well how to manage numerous customers, ship the products and is learning how to develop a product catalogue. The capacity of managing receivables and financing remains to be developed. Wholesalers will have to be wary that a new business model, which could be called “Massive First Tier “ as opposed to the classic “first tier / two tier” model, is not developed behind their backs…

Will Michael be successful in indirect distribution, in the same way that he was in direct distribution?

Ultimately, competitors and wholesalers will be the ones to provide the answer more than the new entry, as their reaction and capacity to meet the real needs of the distribution network will depend on the market share that they will loose to their new challenger.

Jack Mandard

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- Give a better understanding of this market to any company interested in it
- Identify the challenges and the ASP economic environment
- Identify the key players as well as their position on the market

To download the study, please click on the Acrobat link below

.
I. Definitions and concepts

II. Players analysis

III. The ASP software solutions

IV. Country approach

V. ASP and indirect sales strategy

VI. Access solutions in ASP mode from the ASP-SaaS database

- Definition of concepts
- Statistical analysis based on ASP data already present in the compuBase database
- Comparative analysis with the available compuBase data

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