Trade Shows: It's Show Time
Every year the computer industry makes an exhibition of itself. But, asks Sean Hallahan, where do small resellers fit into the cast of big bucks players?
The world?s first trade show, The Great Exhibition, opened in the specially constructed Crystal Palace in 1851.
Then, as now, the function of the trade show was to allow manufacturers to demonstrate the quality and superiority of their products and services, and to attract customers. Trade shows also provide an informal atmosphere in which to meet potential partners, to view the opposition?s operations and to discuss and reflect on trends and the future direction of the IT industry.
These days the venue for trade shows are more likely to be Birmingham?s National Exhibition Centre (NEC) or London?s Olympia. For the channel, the most important show is probably Comdef, organised by Richmond Events, which takes place annually on a luxury liner.
Comdef is a rigorously organised affair with breakfast, lunch and dinner meetings booked in advance, and 20 minute or half-hour slots allocated throughout the day. Comdef is the only exhibition attended by the distributor, Metrologie. ?It is a very focused show and I like the idea of having booked appointments,? says Phil Goodman, Metrologie marketing manager.
?Because it is a trade-only show you know that the people you are talking to are customers or potential customers and that they will be senior people. It is good value for money.?
Exhibitions have both their advantages and disadvantages. The advantages are that an IT trade show such as Comdex in the US, Cebit in Germany and Networks 97 IT Expo in the UK provide the opportunity for hands-on demonstration of products and prospects to a large number of customers, who would otherwise have been impossible to reach.
The disadvantage is that attendance at exhibitions is expensive and time-consuming in both financial and staff terms. Sales and support personnel are tied up sometimes for a week at a time, which can be a drain on the resources of smaller resellers. The commissioning and construction of a stand is another expensive item, sometimes amounting to thousands of pounds. Added to this is the cost of accommodation, hospitality and transport.
Renting the floor space at an exhibition alone is a costly exercise. Miller Freeman, which organises Networks and IT Expo, charged exhibitors #318 per sq metre of floor space at the NEC. The Microsoft stand of 120 sq metres cost the firm #38,000, while even the smallest stand of nine sq metres cost over #2,850.
On top of that lies the next most expensive item ? the cost of designing and constructing the stand itself. According to Miller Freeman, firms may spend as much again on the stand, travel and accommodation as they do on the floor space.
Altogether, Networks 97 attracted 20,851 visitors and IT Expo 3,637. But it is not just the number of people passing through the exhibitions that matter, it is their buying power.
Goodman says: ?We have not been to a show in our own right for four years, although we will occasionally have a representative on one of our suppliers? stands to talk to resellers. I am not convinced of the value of exhibitions. Most of the delegates who go to the shows are not senior people and do not have purchasing power.?
In recent years the concept of the all-embracing IT show has given way to a more focused technical or vertical market structure. This year, The 17-year old Networks show featured products from over 550 exhibitors, while its sister show, IT Expo 97, was attended by a further 150 vendors.
Networks 97 is not the only game in town ? it faces competition from other trade events. In October, Olympia will play host to Networld & Interop organised by Softbank Forums. Networld & Interop will cover many of the same issues and have many of the same exhibitors as Networks 97. In the same month, Touchstone Exhibitions will hold its Electronic Commerce exhibition at Olympia.
In the 1970s and 1980s, the UK had just two major shows ? Compec and the Which Computer Show. Compec in particular featured every major technology, from mainframes to microcomputers, and from databases to routers. These shows were often used as the launch pad for new products, and attracted thousands of visitors and hundreds of exhibitors.
Since then exhibitions have become more focused, dealing in one particular market segment. Heather Adams, exhibitions director at Touchstone, believes the increase in the number of shows and their segmentation into particular sectors is a result of higher public awareness of IT. ?The main issue now is that people are a lot more informed, and that has led to a proliferation of shows,? she says.
The exhibitions themselves have changed in character. The old style show consisted of exhibitors putting their sales and support staff on the stand and waiting for the visitors to turn up. These days they are much grander events.
At Networks 97, for example, visitors could test drive internet commerce, intranets and voice and data integration solutions; consultants were invited to the consultants centre to be kept abreast of the latest technology; and the show even had its own television programme.
Miller Freeman acknowledges the importance of the channel by hosting a free business clinic for resellers. ?There are lots of things besides the stands that are designed to attract visitors, which you must admit is a great improvement on the shows a few years ago,? says Adams.
Make no mistake, exhibitions are big business and no effort is spared to attract visitors. The fact that the shows have become more focused is a double-edged sword for exhibitors and visitors alike. Networld & Interop, the Electronic Commerce Show and Networks 97 all broadly cover the same subjects, for example.
For the likes of IBM and Microsoft this presents few problems ? their budgets are large enough to guarantee attendance at any of the shows they chose. But for the smaller companies without huge marketing budgets it is necessary to make a choice.
Earlier this year, the choice of which exhibition to attend was made simpler when Softbank Comdex and Software Forums joined forces with Emap and E J Krauss, to radically alter the face of exhibitions. According to James Magee, MD of Software Forums, the aim of the consortium is not just to change the face of the firms? own exhibitions, but to shake up the whole industry.
?Basically, what it all comes down to is that the UK market has become a bit of a mess. We are shaking up the industry ? there are too many vertical shows. In future, the alliance will pull together Comdex, Networld & Interop and a telecoms show together.?
Magee admits that Comdex in the UK has not been a huge success largely because the format was imported from the US and did not fit in with the culture of the UK.
?We have tended to clone exhibitions around the world and it has not worked. Cebit is breaking up because it is too big. Comdex was not a failure in the UK, but neither was it a huge success. Fortunately the organisers are big enough to recognise their mistake,? he says.
Magee argues that exhibition organisers have become complacent, merely content to sell stand space without a thought to what the visitors want. The company has spent two years and $2 million surveying potential visitors, businessmen and others in an effort to find out what they want from the show. One of the features at this year?s Networld & Interop is a channel lounge where resellers can meet, discuss and be wined and dined.
But in answer to the question of whether resellers should join the show as exhibitors, Magee says: ?We would love to sell them sq metres, but I don?t really think it would be worth it from their point of view.?
The high cost of exhibiting prohibits many resellers from attending the shows unless they get some assistance from their suppliers. But the suppliers themselves have become more discriminating in the number and type of shows they attend.
Some suppliers have taken to organising their own shows. Apple, for example, will be hosting Apple Expo in the UK in November, an exhibition aimed purely at Apple customers. The company also attends exhibitions and conferences outside the IT arena where it feels it has something to offer. For example, it is attending an international printing and publishing conference in Amsterdam where it has a stand comprising 10 booths, eight of which are given over to its partners.
Apple Expo is the second largest item in Apple?s marketing budget, according to marketing director Alan Hely. ?My view of shows is that you need to invest 100 per cent and probably 120 per cent. It is certainly worth dealers attending Apple Expo because the public comes to the show. They may come without having decided to upgrade ? they have the chance to talk to Apple and get our opinion, and software developers get their opinion, and they may walk out with a complete new package,? he says.
But Apple believes there are just too many shows competing for the attention of the market, and that it is necessary to be highly selective in choosing at which to exhibit.
While agreeing that Expo is a useful tool for Apple, its partners and users, Magee believes that it and similar shows have their limitations. ?The biggest problem is that by running Apple Expo, Apple is reinforcing its isolation,? he says.
While it is true that the Apple faithful will attend the show in droves, it is unlikely that it will pull in the non-committed PC user. By having a stand at a more general show, Apple could display its wares alongside competitors such as Compaq and IBM.
A small stand at Networks could give an exhibitor potential access to 20,000 plus people. On the other hand, one stand can easily be overlooked among the 550 other exhibitors. Exhibiting at smaller shows such as Electronic Commerce, with about 100 exhibitors, will not pull in as many visitors and their interest will be more focused, but the chance of a spontaneous purchase will be minimalised.
It is not only the manufacturers that have organised their own shows, some distributors have got in on the act as well. Ingram Micro hosts a twice-yearly road show aimed at bringing software developers and vendors together with dealers. The half-day shows take place during September and kick off in Scotland, followed by Manchester, Birmingham, Bristol and ending in London, with more than 100 exhibitors taking part.
The only truly focused channel event is Comdef. While both company-specific shows like Apple Expo and vertical market or vertical technology shows may pull in visitors, there is a growing convergence within the IT sector that Comdef caters for.
Trade shows and exhibitions have been the staple diet of the IT industry for over 20 years, a way of demonstrating products, attracting new customers, and indicating future directions of particular technologies. The Which Computer Show of the 1980s was one of the first moves into a vertical sector. Even before the advent of the PC, the microcomputer vendors decided they were out of place at a general trade show like Compec.
Since then the market has become more segmented, but virulent competition looks to be driving the trade shows back to a more general format. To attract more visitors show organisers have had to offer more than simply a stand ? such is the competitiveness of this niche business.
But, Comdef aside, resellers stand more to gain by attending the exhibition as visitors and conference attendees than as exhibitors ? unless it is on the stand of their supplier.