Box Pushers Changing Perspective towards Services

Services add the value in the business and therefore, box pushers need to change their perspective

The traditional channel business is going through lot of transformations. Gone are the days when box pushing was the only focus of channel partners. Services have now gained prominence in the IT industry. The concepts of System Integrators, Solution Providers and Value Added Resellers have emerged from the need of better service support to the customers. Partners have positively started looking at services as an additional source of revenues. At the same time they are skeptical whether services will really have major impact on their businesses.

Champakraj Gurjar, MD of Maxtone Electronics said, “Services has good prospects in the IT industry. Foreign giants are investing huge money in India. Big companies cannot provide services to the customers directly. In such a situation, partners come in the line. They can become franchises of big vendors and make profits out of services to provide to the end users.”

He said that partners needs to understand that anything free is not always affordable for the business. Services add the value in the business. Therefore, they need to change their perspective and start looking at services as a tool of additional income.

Unnat Mehta, owner of Reet Enterprise opinioned that charging for services is a good idea but would not affect profit margins of partners to a great extend. He said in a scenario where online portals snatching away customers from the channel, resellers retain their customers by giving them free service support. Partners fear that if they start charging for services like installation and formatting, they might lose their customer base.

“Services are not enough to survive and sustain in the business. Desktop and laptop market is drastically declining as everything has come on the Smartphones. Then where is a scope for services and getting revenue out of it”, he questioned.

He also pointed out that there are resellers who provide services free of charge. So if partners are looking at services as an avenue, they need to form a mechanism that would refrain them from serving for free.

Online trading portals have so far failed to gain customers confidence in terms of after sales services. Customers do not get genuine warranty and service support for their purchases. It is a big opportunity for channel partners for not only retain their existing customer base also make money out of service support.

Mr. Sunil Doultani, owner of Classic Systems said, “Services are the biggest revenues for system integrators. Mere box pushing will not earn partners their desired profits. The offline partners have edge over online in terms of after sales services. They need to capitalize on it.”

He said that the pricing of SIs is high as they offer bundle of services, they need to tell their customers that they will not get same kind of service support in online trade.

According to Manufacturers' Association of Information Technology (MAIT), the growth in the Indian IT industry is expected to be around 30 per cent and the overall sales are projected to touch US$ 17 billion in FY 15. International Data Corporation (IDC) predicts that the IT services market in India is expected to grow at the rate of 8.4 per cent in 2014 to Rs 476,356 million (US$ 7.88 billion). Therefore, Services can give sustainable margins to the partners. Partners should look at different ways such as periodical service support to their customers. Kishor Nagecha, owner of KP Commercial said that it is a time when partners should make their customers realized that services are value addition to their purchases and cannot be free always.

Kshitij Kotak, CEO of Fortune Grecells said that though there are challenges, but channel partners needs to start looking at their business with different perspective and needs to be aggressive when it comes to profitability. He said that there is need to search for various avenues in IT services and accordingly update themselves. Services have huge potentials and it is a future of IT industry.

Suhas Lanke, owner of Hi Tech Computers, however, opinioned that the idea of charging for services may not work in tier 2 and tier 3 cities as the scope of services is very less in the smaller cities.

He said, “The idea of earning revenue from services is good. However, I am suspicious that whether it is applicable for the tier 2 and tier 3 cities. Today students can manage software installations and up gradations. There are IT products like printers which hardly require any service support. So there is very less scope for service support in smaller cities.”

In a scenario where E Commerce is eating up revenues of traditional channel partners and stagnancy in the industry has stuck their business growth, services can become an additional source of income for the channel partners. Channel partners needs to change their look out towards services and start charging for their best support to the customers.