Channel sets sights on networking

The networking sector has been pinpointed as a principal growth area for the channel this year, after the number of resellers claiming to sell related products or skills increased by 80 per cent.

Research by Compubase, commissioned exclusively for PC Dealer, identified a clear polarisation of players within the networking market. The number of corporate resellers had dropped distinctly. A breakdown of their turnover from different user types indicated that fewer resellers derived substantial income from the key user accounts.

At the same time, the research revealed a burgeoning SME re-seller sector and the numbers of resellers who considered themselves to be internet Vars, or who recognise the potential of the Net and e-commerce for their business, was substantially greater than last year.

The research also showed a general acceptance that margins on anything other than high-end networking products were falling, and would continue to do so. Falling margins were accelerated by a change in buying patterns with many resellers buying directly from vendors and not showing any loyalty towards distributors.

Resellers responded to a drop in margins by developing their business model to emphasise services, maintenance and consultancy work.

Simon Wallis, sales manager at Compubase, said: 'Resellers have been pushed towards networking by their customers, the big business opportunity it represents and falling PC margins.'

SMEs considered the development of NT as of great importance for the future, while corporate resellers claimed that internet, intranet and e-commerce would offer the greatest opportunities.