IT muscles in on dealer territory

Everyones fighting over B2B. For a while now, the small to medium-sized business (SME) customer has been the last secure bastion of the independent dealer. But as more laptop and PDA manufacturers ship devices able to pack a SIM, B2B dealers are likely to face new threats.

One threat comes from the IT resellers that already stock data cards and can see the opportunities for moving into telecoms.

The other is the threat from the networks themselves. Networks are trying to cut the channel out of the picture by getting manufacturers to supply hardware complete with their SIM cards. All that’s then needed is a quick call to their own direct sales force to provision a device direct.

Most worrying of all though, is the current trend for networks and IT resellers to join forces, spelling double trouble for dealers.
O2 and Westcoast, which is an IT supplier to the computer reseller market, have been working together since July.

Meanwhile T-Mobiles tie up with Northamber, a UK trade-only distributor of IT equipment, announced before Christmas, came to fruition a couple of weeks ago when training finished. The distributors sales force hit the roads with mobile data, though not voice as yet, in their portfolios. In mid-January, T-Mobile also announced a retail incentive in the form of £20 for each data connection.

Orange remains tight-lipped about its plans, saying only: We work with a number of PC resellers through the indirect channel. We are talking to further IT resellers, but at this stage it is too early for us to comment.

Vodafone head of indirect Rob Sandford is a little more forthcoming. Like all networks, we see thousands of laptops and PDAs going out of the IT resellers door with an empty SIM card slot, he says. At the most basic level, we want our SIM in that slot.

One influential mobile distributor at least reckons the writings on the wall for mobile dealers that dont wake up to IT resellers new-found interest in matters mobile.

Unless were careful, IT resellers will have a significant impact on traditional routes to market, he warns. Devices that harness mobile connectivity to deliver increased productivity are going to hit the headlines. Dealers need to understand how these work, what they can do for a business and how they can be integrated within it. The IT channel already does.

3G data cards represent just the tip of a very big iceberg, he argues, and dealers cant afford to wait to offer end-to-end IT solutions that incorporate mobility.

Some dealers are still too interested in scoring a big buck for the connection, before churning at the end of the contract period, he says. Most dealers just havent kept abreast of new developments. All too often a request for a BlackBerry or a data card sends them into a flat spin. Mobile data is chucked in as an afterthought once the voice deal has been sorted when it should lead a sale and bind the whole relationship together.

Clients will think twice about shifting allegiance for voice if a dealer has done some bespoke integration on the data side, he argues.

Dealers who say that IT resellers cant get their heads round mobile must be crazy, arrogant, or both. Of course theyll cope with commissions, netted down prices and a consultative sell. They will become a threat. I worry that some traditional businesses will struggle to survive in the face of competition from the IT channel. That said, if I were a network, Id be supporting both the traditional channels and the IT resellers in the data land-grab. Theyd have to be stupid not to.

Hugh Symons Telecom managing director Hugh Roper is already courting IT resellers alongside traditional channels with a programme designed to de-mystify the complexities of selling mobile devices ready-connected. Commissions are scaled according to the input made by the reseller or dealer, with Hugh Symons staff on hand to guide them through the complexities of tariff selection, credit checking, device configuration, SIM provisioning, porting and billing.

But despite the efforts of the networks to engage with IT resellers, Roper believes B2B dealers could still have the advantage.
Its very difficult to sell a device connected independently of a deal thats already been constructed around voice, he says. Especially because any dealer worth their salt will already be selling the data card anyway.

Nonetheless, Roper believes the networks will continue to court IT resellers so they can can get the data business without having to pay the large connection bonuses traditionally demanded by dealers.

The new focus on quality connections will also play into the hands of good IT resellers. Theres no doubt that the networks are looking for high-value data in the same way as they look for high-value voice business, observes Roper. So good IT resellers áa