EDITORIAL - Warning: it's a bumpy year ahead
This year is going to be tough. If last year was anything to go by, the entire channel is going to suffer in 1999.
While there were mergers aplenty, the number of companies that went into administration was even higher; look at Crown Computer Products, The Big PC Company, Evolution Holdings and Electro-Wide, for instance. The big players also felt the pinch, with AST deciding the PC game was too much hard work. In all, the year was riddled with stories of key players either falling foul of the Serious Fraud Office and Customs & Excise or just cutting jobs to beat the band.
The year had its successes, too, but there was definitely more misery than joy. And 1999 will be even worse if the recession happens. The signs are that it will and when it does, the pinch many of you are feeling will become a death grip.
Last year started with a bang, with administrations galore, so will this year be the same? What exactly is it about January that makes small companies want to curl up and die? Maybe it's the threat of shrinking margin, which, if the channel is to believed, means no one has made a profit in about 20 years.
Still, look on the bright side. At least the bright orange overall-style clothing that was predicted in Space: 1999 hasn't come to pass. Unfortunately, cruel shrieking alien species - aka The Spice Girls - has.
Next year, e-commerce will probably start to make a dent in the sales channel. Direct sales account for an ever-growing number of sales. Although there is no value add, it is becoming obvious that more experienced users are looking for bargains over expertise. This is a growing trend which, if anything, will grow rapidly next year. With companies practically paying people to get themselves internet access, it is likely that an increasing number of IT products will be found and purchased in cyberspace.
Fewer UK channel players will float in the next year, as companies tighten their belts for the recession and laugh at the idea of allowing shareholders any say in the future of their precious margin.
Computacenter's flotation in 1998 could be the last big one for a while. Meanwhile, here are some things we think might happen in the New Year, and if not, they should:
- Apple will finally get bought by either Oracle or Sun - and about time too
- IBM will finally find a buyer for its overpriced Global Solutions group
- Microsoft will beat the DoJ - again - and we'll all moan
- Bill Gates will change his hairstyle and make Richard Branson the designer of his 1999 jumper collection
- Northamber will actually be snapped up
- Novell will also find a buyer and become a serious force in the enterprise again
- Ingram Micro will sort out its staffing problems
- There will be consolidation among the networking distributors because we're tired of waiting for the inevitable mergers to happen
- Compaq will still claim it doesn't sell direct, probably at the launch of its direct operation
- Despite the fact that most channel players report a profit, there will still be no margin in 1999
- Microsoft products will arrive on time
- UK supermarkets will be doing 'three server for two' deals and doubling clubcard points for anyone stupid enough to buy a Net PC.