Different city, same problem

DQW News Bureau

Bhubaneswar: After a successful chapter of IT Panchayat in Shillong the next
destination for the mega event in eastern India was Bhubaneswar. Hosted at the
scenic Mayfair Lagoon on June 8, 2007 the event witnessed the participation of
over sixty partners making it a grand success.

The program started with a couple of brief presentations from the sponsors.
Prasanta Roy, Relationship Manager - East and northeast gave the presentation on
behalf of Seagate while KK Dutta, RSM-East represented Amconics. The
presentations were followed by the much awaited panel discussion session, which
was moderated by Shivangi Yadav, Executive Editor of The DQ Week.

The panel comprised Soumitra Mohapatra, Assistant Manager — Channel Sales,
Neoteric Infomatique, Ranjan Samantaroy RM-Channel Sales, Ingram Micro India Ltd
and Sumit Dhanuka, Branch Head-Orissa, Rashi Peripherals from the distributor's
side. Abhishek Poddar from SA Infosys and Brahma Prakash Mishra from Targus
Technologies as well as the Treasurer, Information Technology Association of
Orissa (ITAO) represented the channel community. Issues like after-sales and
warranty support, pressure of doing volume business vis-à-vis decreasing
margins, delayed backend and continuous price drops of products without prior
notice were raised and discussed. Like any other upcountry region, partners had
earlier complained that service in Bhubaneswar is not up to the standard.
Surprisingly, no one came out with any specific complaints related to service
although they agreed with the fact that this was an ongoing trouble which they
face everyday and was quite difficult to get resolved unless the principal
companies takes some steps to streamline their service procedures.The next issue
which was raised in the event and which really heated up the atmosphere was that
of thinning margins doubled with pressures from the distributors to increase
partners' business volume thus make-up for the decreasing margins.

“No doubt the profit margins are declining day by day. It is alarming for
the entire channel fraternity. Whatever margins are there the distributors are
enjoying that and they will never share it with the partners,” lamented Basant
K Mohanty of Compact Systems. He compared the PC components with perishable
products and said that the way the prices are being dropped everyday; margins
will remain on the lower side.

Reacting to that Samantaroy of Ingram said, “The price calls are taken by
manufacturers and distributors have very a very small role to play. There are
various reasons like, schemes, demand and supply, competition, but the key
factor is that the issue depends on the manufacturers' decision to address any
market.”

Opposing to what Samantaroy said Poddar pointed out that though the vendors
drives the market but it is the distributors who control the main show. “Since
they have their targets to meet, distributors play the entire game and the
channel gets panelized for it. It the distis who give credit to the channel but
vendors are never involved directly with the partners. Once they start doing
that many of these issues will be addressed.”

Other common issues, which occupied the major part of the discussion, were
delayed back-end settlements and sudden price drops. “Stocking is a major
threat now since we are afraid of the continued price drops. The way prices are
dropped everyday it is dangerous to keep bulk stocks or else chances of
incurring a loss becomes higher. This is a big problem with products like hard
disks,” said Mishra of Targus Technologies.

The discussion ended with a thanksgiving note by Rajesh Dora, President, IT
Association of Orissa (ITAO) who enthusiastically supported the event and played
a key role in making it successful. “It is very rare that the Bhubaneswar
channel community has come out and discussed these persistent problems in such
an open forum. I thank The DQ Week for conducting such a show and giving us an
opportunity to discuss these problems openly and try to resolve them,” he
said.

The evening ended with a lucky draw conducted by Amconics and was followed by
cocktail and dinner.