A recent report by IDC on the PC sales in India showed a subtle growth in consumer PC. While the overall PC shipment for Q2 2016 stood at 2.14 million units implying a quarter-on-quarter growth of 7.2 percent over Q1 2016, there was a year-on-year decline of 2.2 percent over Q2 2015.
The channel partners are having a tough time as end points are no longer an inspirational sale and with mobility kicking in, the former has become more pervasive.
“Margin is shrinking as there is no value add and the competitors are playing on low margin. On the other hand, online prices are available and we are not left with any pitch to claim margins,” says Gurpreet Singh, MD, Arrow PC Network.
As the future doesn’t seems to be encouraging, the channel partners are opting for various strategies to survive in the market.
Sanjay Patodia, CEO, Galaxy Office Automation is of the view that PC business helps easy entry into a customer and maintains continuity as they tend to buy it repeatedly. “Our strategy is to increase our coverage through low cost sales resources to sell these products. Optimizing the execution also becomes a part of the strategy as it helps in sustaining the low margins,” he says.
However, Central Data Systems is taking another path. “As an organization we are not heavily focusing on desktops per say as there is a huge pressure in the margin when you go to sell only desktops. But now we are looking into IT infrastructure as a whole and desktops become a part of it and when it becomes a turnkey solution then of course there is a better profitability,” says Kota Subramanya, director, Central Data Systems.
A part of the strategy is also to focus on other verticals who comparatively purchase more of PCs. While channel partners like Arrow PC Network and Galaxy Office Automation are concentrating on BFSI sector primarily, Central Data Systems are addressing IT, ITeS and manufacturing as its verticals.
Providing Opex model or PC-as-a-service model for the customers can be tricky question for the channel partners. However, some companies believe that providing PCaaS can be difficult and therefore rely on Opex model which generates more profit.
The constant turmoil just doesn’t end here. Selling end points isn't rocket science and therefore OEMs like DELL, HP and Lenovo are addressing the market directly when it comes to selling end points. Customers can easily go to an HP or a Dell website and purchase an end point. Subramanya says that there is no stickiness with the customers which becomes a very tricky situation for the partners.
There are certain expectations from OEMs which channel partners want them to stand on. “OEMs should come up with new formats, all in one is picking up. They should keep separate models for consumer and commercial consumption and they need to support us to convert the deals in Opex. We don’t have good schemes and finance partners,” says Singh.
Sanjay Patodia shares similar thoughts. “We expect them to be channel centric in their approach in enterprise customer space. However most of the OEM's are inclined to be channel centric in SMB space and adapt a direct approach in enterprise space reflecting an opportunist pattern,” he says.