It's not just ebusinesses such as Amazon and Boo.com that have hit a brick wall; several large resellers have also been putting out profit warnings. This has been attributed to a slower-than-expected services market and to the transition from product-based to services-based models.
These trends are not just a swing from over-confidence to reticence. They are the result of a change in attitude that is taking place in business across the globe.
The great dotcom con
With the dotcoms it's simple: the City fell for the con. They don't understand the dotcoms, yet they still go ahead and advise investors to pump millions into anything e-related. Now that the money is not coming back, people want to see it. That has spoiled the party for the rest of the companies waiting to come to the market, having built up a sound business without going down the initial public offering or venture capital route.
With services, the problem is that there is not enough business to go round. The channel has 'crunched' up into one amorphous mass with vendors, distributors and resellers all chasing the same business. This is confusing for users who, at the same time, are being bombarded with information about application service providers, managed services, customer relationship management, enterprise application integration (enterprise resource planning (ERP) appears to be dead) and, of course, all things 'e'.
Is it any wonder that the market is circumspect after the millennium bug scare, another great IT industry swindle in the eyes of many users?
We have set high expectations for the e-economy and most of the results are unconvincing. Until confidence is restored, it will be difficult for any business that does not provide real solutions to specific business problems to expand its services business.
Small is successful
In contrast, smaller resellers are thriving. I believe this is precisely because they offer solutions to problems, with the problem coming first and the solution second. IT managers are starting to realise that they do not need a sledgehammer to crack a nut. Many of them have learned the hard way through their ERP experiences. They are not going to be easily duped into e-enabling their entire businesses.
Smaller resellers are not afraid to think small. Sometimes the idea is just too big to be manageable, but many IT managers want to go with the big idea so that they can leave their mark on the business, instead of doing simple, practical things that will solve problems and save money.
People are fed up with spin and hollow promises. We can make use of the new technologies, but they have to deliver something useful. Smaller resellers that are close to the coalface have realised this, and the dotcoms and corporate resellers moving into services can learn from them.
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