Resellers to the rescue of network managers

Networking vendors will increasingly look to the channel as their route to market as products become more complex, according to the latest report by analyst IDC.

As network managers are showing more interest in hardware and software-based management capabilities, such as security and business analysis, networks are becoming challenging to manage.

Sales through the channel are expected to increase by 41 per cent over the next five years as vendors look to resellers to keep customers up to date with the rapidly changing technology.

"Network sophistication is becoming more complex and the rate of change for products and the need for integration services is growing," said Stephen Elliot, senior analyst at IDC.

"This is because the channel is close to the customer and understands technology. In the next few years more vendors will spend more money on channel resources and development."

Elliot added that businesses are looking for network management products that offer more security capabilities, business analysis and integration options to identify and resolve network problems more effectively.

In its Worldwide Network Availability report, IDC said the market will be worth $1.9bn by the end of 2004, reaching $2.2bn by 2008. This surge is driven by the need for real-time management services, migrations of networks to Multiprotocol Label Switching architectures and an increased focus on IT and business process integration.

The annual growth rate from 2003 to 2008 will be four per cent. The report stated that vendors such as Computer Associates, IBM, Hewlett-Packard and Microsoft are set to benefit most.

Kevin Vine, director of networking services at distributor Ingram Micro, said this is good for resellers because it gives them the opportunity to sell their own services rather than just products.

"Services sales offer higher margin and are an annuity because the reseller can go back every year," he said.

"Many resellers sell network management products alongside equipment but it is the ones that do something special with it that are profiting."

Vine added that security is a good area of the network management market to be involved in. "Resellers that are switched on to networking and security have a good opportunity to sell their expertise," he said.

karl_flinders@vnu.co.uk