Many dealers have been in denial about the Internet and the possibilities it offers. But lately there has been a turnaround and most dealer managers are scrabbling to catch up. While issues like online software distribution are being wrangled by vendors and big channel players, dealers are offering some kind of Internet service provision in their portfolios.
Hardware and software vendors now offer some type of Internet facilities. Hardware vendors have evolved Internet enabled products and software vendors have tools and hooks which allow Internet extensions and 32-bit support.
Donald de Palma, Forrester Research senior analyst, says: 'Where 32-bit and the Internet are concerned, it is a case of be there or be square. Nobody wants to be left out.' There are many oppportunities in equipping and supporting corporate customers with the hardware and software needed to do business in the new Internet market. That includes communicating, selling, order handling, invoicing and financial processing, distribution, fulfilment and customer service.
It's an easy sell. Many companies are considering using the Internet to sell their products and services and need the services of resellers to create Web pages. Establishing an online presence for a customer creates an instant, long-standing revenue source.
The Web must constantly be updated and many add-on products and related services can be sold alone with the creation of an online site, such as digital video equipment and 3D animation software. Meanwhile vendors like Microsoft are rolling out Internet reseller programmes to its solution providers. Some resellers are expected to take advantage of the schemes on a casual basis, while others are expected to develop the Internet as one of the main legs of their business.
For many the Internet represents a challenge to enter areas of technology they previously had no dealings with, such as graphics design. Some are already making Web site development a speciality, while others are learning enough to be able to respond to demand.
The easiest way to assist customers to access the Internet is to become a reseller for one of the 120 or so UK-based Internet service providers (ISPs). Thames Valley-based I-Way is an example. It offers email, news and bulletin boards plus access to the World Wide Web with support as needed. Resellers can provide their services, or sell monthly or annual access contracts and take a commission or fee. The benefits to both are obvious: the ISP gets more customers signed up and the reseller is able to offer Internet services without the investment.
Another access provider, Cix, selectively offers third parties free consultancy advice to pass on to their clients. Business development manager Brian Williams says: 'If we encourage resellers to sell Internet services to their customers then we benefit, so we are happy to provide handholding and consultancy. We want them to be successful.'
Resellers should not become ISPs themselves, unless they have plenty of ready funds. I-Way MD Glenn Rothwell says: 'Setting up as an ISP is costly. We have invested in eight Silicon Graphics servers and 120 B-ISDN channels, so it is not something a dealer would do without considerable thought.' Resellers can work with one or more ISPs to provide the services their users want. I-Way services, for example, provide lookup directories on train and bus timetables, local entertainment information, welfare services, and give details of special events, in addition to full Internet dial-up access for email, file transfer and World Wide Web browsing.
Howard Rippener, marcoms manager of Silicon Graphics, says: 'I-Way is exploiting the multimedia capabilities of the hardware to offer a truly local information service combined with the best of What's On and Yellow Pages.' Similar ISP organisations throughout the UK are working with resellers and their customers helping them design customised Web pages to advertise their services. The opening for resellers lies in offering the services to develop Internet-based applications that drive high-end Web servers sales.
The Metaverse Corporation of Cambridge is moving towards the Web services market. Managing director Simon Appleton says that exploring the Web's commercial opportunities is the way forward. 'We must bridge the gap between the Web and organisations which are interested in making the most of it for their business. We have to advise in the use of the Web as a business tool and must provide the skills and resources that enable a business to set up a site.'
Appleton points out that the potential market is enormous - virtually every business in the UK could benefit from some exposure or involvement in the Internet. He says: 'The Internet will become the new medium for packaging and presenting information. Companies will use it to market themselves.'
Bradley Crooks of Metaverse says: 'The real revolution will come later this year with the advert of electronic cash and secure credit transactions. It will then be feasible to place orders and make payments online.' Resellers can play a big role in shaping the social change that Internet commerce will bring, not just in the practical implementation but in the education and evangelising for the new systems.
Those who have moved into Internet services say that consultancy is the biggest revenue earner. Camiel Camps, IDC research analyst, says: 'It is clear there is a need for consultancy to help companies analyse business objectives and develop remote networking solutions that provide the maximum return on investment.'
Companies which are looking for help with utilising the Internet in their business have several key questions they typically ask of the providers. Is their network and bandwidth capacity up to the task? Are they confident about their future survival and managing their existing client base satisfactorily - able to provide top-level security and support?
Despite the fact that the Internet has passed from the periphery to mainstream, many resellers are thinking about how to best handle it. Bob Henderson, MD of CST Lynxserv, says: 'We are considering the options and are thinking about which services will add most revenue.' One thing seems sure - by this time next year few resellers will not have the Internet in some form or another in their portfolios.
A study by the Market Research Group for Online Monitor looking at 'who uses what' has segmented the adult market into five main groups as shown in the pie chart below:
- Realists are mainly ABs who are interested in new services but express concern about reliability. 22 per cent use the Internet, 25 per cent use a computer at home or work and 29 per cent use it for fun.
- Naive enthusiasts are C2s who see no disadvantages to using computers. Nine per cent use the Internet, 22 per cent have a recreational computer at home and are willing to try new services.
- Relaxed users are strongly ABs and see increasing computer use as inevitable. 68 per cent use computers at work, 35 per cent at home and 13 per cent use the Internet.
- Worriers are mainly older C1s and C2s and are more likely to be concerned about the impact of technology. 46 per cent use computers at work and seven per cent use the Internet.
- Outsiders are biased towards C1 and C2 and see computers and online services as irrelevant. 43 per cent use a computer at work but none are on the Internet.
Online Monitor tracks the usage of online information and messaging services.
Unforeseen internet blips
For some resellers the Internet brings unexpected problems, according to a recent report from Forrester Research.
Those with an interest in promoting and selling EDI are seeing their markets plateau while transaction Web servers launch a new market for business-to-business commerce services. Resellers and integrators interested in electronic commerce, trading and transactions will have to refocus to become Internet-based transaction brokers. They should leverage their solid track record as trusted third parties and system integrators to boost their client base, according to Forrester.
In search of the internet provider
Micromuse is a Sun reseller and is targeting Internet providers as a potential market. It is selling Sun hardware and an American-sourced helpdesk software product called Remedy which provides helpdesk support to companies that want to set up as access providers and ISPs. In the US Remedy is emerging as a de facto standard for Internet providers as a way of homogenising the problems and solutions they face. It also allows ISPs throughout the US to develop alliances and support each other's local customers.
Micromuse's customers include Demon, Delphi, Compuserve, Cix and EU Net. Micromuse provides those companies and their customers with a package of Sun's hardware, Java browser and Sun's network management products, combined with Micromuse's own Net products, training and consultancy. Chairman Christopher Dawes says: 'The providers are working with virtually every organisation in the UK, so we are looking at tremendous leverage.' As a Sun reseller Micromuse provides its own solutions around Sun's hardware and software products such as online management of Internet Web servers. They manage systems remotely so that customers need only provide their own content and leave all other aspects of Web site maintenance to Micromuse.
No need for humans
Many resellers are missing out by not exploiting the Internet, says Sue Lingard of Speedware. 'Those dealers which offer support to their customers are finding they can do so more effectively by using the Internet,' she says.
A reseller will have a knowledge database which contains frequently asked questions and resolutions which the customer can access at any time. 'It makes customers happy because they can see an immediate response to their query. It also reduces the number of calls and makes the reseller's staff happy because they don't need to have someone available at the end of a telephone to provide customer help desk support.' Customers are able to track the response to their call and can see when an engineer is going to call without involving human response.
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