Resellers will face a major shake-out in the next three to five years and must broaden their offerings to survive, Sage chief executive Paul Walker has warned.
Speaking at the Regents Associates conference the head of the accounting software company said: "There will be changes in the channel.
"Many resellers have focused on specific parts of the market but, with today's increasingly sophisticated customers, you need a different perspective. They need resellers with a large range of offerings."
He added that a wave of consolidation will occur over the next three to five years. "Companies no longer want to go to two or three companies. Resellers will have to provide a broad range of services to compete," he explained.
Maintaining that there was still a vital role for resellers, Walker said: "Some people have questioned whether resellers will be needed with the internet and even easier to use technology.
"Small and medium sized enterprises [SMEs] rely on them and I believe they will be more highly valued as technology gets more complex.
"The reseller fulfils the role of IT department and the need for support is growing not diminishing. For SMEs the relationship with the reseller is absolutely key. What SME customers are looking for is guidance."
This view was supported by Crawford Del Prete, senior vice president at analyst IDC.
"The channel is not going away and will not be diminished," he explained. "It will be important to help companies decide what to buy and to tell vendors what problems customers are having."
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