Dying Australian IT reseller market

Big begets big. The larger the organisation the less likely it is willing to engage with smaller organisations. Yet, it is these very organisations that provide the personalised service that many would like to see.

In some recent news Data#3 report record half year profit as a result of strong growth, reflected through the "diminishing number of resellers" in hardware and software.

I’ve experienced first hand, the ferocity of this market and its cut throat nature. The end of the day, its not about service or value that you can provide, its about the cheapest price. And in some cases, the perceived perception of lower risk or other benefits that the purchaser might receive (eg football tickets). It all seems a tad silly, as regardless of whom its purchased from, it all ships from the same vendor and if hardware related, invariably ships through the same distribution warehouses.

Organisations go out and seek three or more quotes for the same product. Some games may be played, but in the end, the majority of resellers, will be ranked the same on the procurement process and it will revert to cheapest price. It doesn’t matter from the procurement process in the majority of cases, I’ve found, about the presales effort (which is expected to be given freely).

We now refuse to provide quotes in situations where three quotes are required. Its just not worth the investment in IT vendor certifications and sales for the perceived reward to warrant spending the time or effort to do so. The value is just not there.

If I was a Director of Data#3, I’d be worried. If your smaller competitors are leaving the market, its for a good reason. There isn’t much profit or value left in it.


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