Date post: | 04-Jan-2016 |
Category: |
Documents |
Upload: | gordon-moore |
View: | 219 times |
Download: | 0 times |
The EMEA ICT Channel Landscape
By Jack Mandard – CEO compuBase
Channel Marketing Managers Challenges….
What are the general trends of our business Is the EMEA distribution manageable as a unique
territory or not? What are the key countries? How to address a small country? Are channel organized the same way everywhere? How many partners? How many tiers?
compuBase 2007 2
compuBase 2007 3
An Enlarged Target Market
1970 1980 1990 2000 2010
Users
CentralisedSystems
Clientserver
Web
Mobile
1
x10
x100
x1000
x10000
2020
• One Server per entreprise, many computers
• One computer, many terminals
• Many Servers, Home computing
• Server Clustering, Mobiles
Machine to Machine
• Server, communicating objects…
An Increasingly Wider Spectrum
compuBase 2007 4
One, two, three tier Channel Model
compuBase 2007 5
Directly addressed by vendor’s channel sales
team
Animated by vendor’s marketing team but
managed by distributors
Influenced by advertising and demand, addressed by
regional distributors or larger resellers
compuBase 2007 6
A complex distribution
Massmarket
MassMarket
ITSpecialist
Home Digital
Specialist
Integrators• IT• Telecoms• Solutions
e-tailer@
DirectSales
ICTSpecialist
ForEnterprise
Distributor Retail
SpecialistOr
Directly managed
Distributorbroadliner
RegionalDistributors
Master VARs-
VAD
SolutionEntreprisecommoditiesSoho - Retail
compuBase 2007 7
Importance of Services to Resellers
Total Revenue
Margincontribution
With a 12% margin on resale
Source of Net Margin
compuBase 2007 8
Market impact
• B to B Resale activities as an additional service not a core business.
• More and more IT partners consider themselves to be IT experts who should rather integrate technology value (future ROI) within the business environment than focus on resale.
• Their TCS (Total Cost to Sell) as a key issue to monitor.
• Vendors' capacity to offer additional services as a Key Factor of Success in a commercial relationship.
• Number of ICT & CE partners will continue to grow• To address the full market IT Distribution will address
more and more channel of sales.
compuBase 2007 9
The largest worldwide Indirect Channel Landscape.
> 350,000 ICT partners – 80 countries> 25,000 vendors (Manufacturers & Software Publishers)
> 5,000 distributors
• ICT market: IT, Telecoms and CE products
For the largest market in value / partners
compuBase 2007 10
• Numbers about Europe vs. …
2007 WW Europe US ROW€ Millions Value % Value % Value %
All IT 1
vs. 2004
961,899+14.6 %
339,836+13.5 %
35.33% 355,961+14.8 %
37.0% 266,102+13.7%
27.67%
Telecoms 1
vs. 2004
1,141,160+11.2%
361,319+7.2%
31.66% 233,369+8,4%
20.45% 546,470+15.3%
47.89%
ICT1 2,103,059 701,155 33.34% 589,330 28.02% 812,573 38.63 %
# ICT Partners 2
870,000 305,000 180,000 385,000
1 Source EITO - 2 Source compuBase / CRN US
compuBase 2007 11
History of ICT Indirect Distribution …
1. A vendor has a good new product, very expensive and targeting large accounts.
2. The product is a success, the vendor develops its sales team.3. A new market is born, the vendor receives overseas requests for distribution.
Overseas market specificities and size push them to use exclusive and non exclusive distributors.
4. The vendor develops its own channel with dedicated agents.5. Overseas distributors lack the financial structure to market the product, they
work with resellers.6. Locally the vendor swaps from a strict direct model to a one-tier model, usually
dedicated to the brand.7. Competition gets stronger, new product lines are launched, the offer gets
broader. Competitors try to speed up using indirect channel.8. Export activities are stronger and stronger based on a successful one/two-tier
model. Locally, competition on price is now heavy, the vendor reduces its direct sales activities and moves locally to the same distribution model as export.
9. The vendor and his competitors try to enlarge their market using new distributors to gain new markets.
compuBase 2007 12
Differences between US and Europe Indirect Markets
Facts: Most OEM Manufacturers located in US or Asia. Most vendors have initially developed an indirect channel in
Europe or EMEA before developing locally. EMEA is an extremely fragmented market, 80 countries, 50
languages.
Consequences: ICT indirect distribution in EMEA is older than Asia or US. Nowhere is the number of partners/number of inhabitants ratio
higher than in EMEA. Marketing & Distribution costs are higher in EMEA than in US. Business Growth rates and market value are not homogeneous.
EMEA Channel Market
Distributors
compuBase 2007 14
Distributors
Broadliner… VAD… MasterVar… MasterReseller….
More than 5,000 Distributors EMEA !
General wholesalers
31%Specialist IT wholesalers
69%
Type of distributors
0 100 200 300 400 500 600 700 800 900
Wholesaler specialising in video gamesSpecialised in office products
Workstation specialistsWholesaler specialised in mobile products
System specialistsAccessories specialists
Software specialistsSpecialists in electronic components
Consumables specialists ...Specialists in telecom and network products
Peripherals specialists ...
compuBase 2007 15
Hardware vendors & Channel…
53% of vendors are using indirect ChannelSell direct
47%Sell
indirect53%
Hardware Vendors
compuBase 2007 16
Hardware vendors & Distributors
43% of all vendors are using distributors
80 % of vendors using a channel have also a distributor
Do not sell through
Distributor57%
Sell with Distributors
43%
Hardware Vendors
Sell only directly to resselers
20%
Sell with Distributors
80%
Hardware Vendors using a channel
compuBase 2007 17
Software Publishers & Channel…
Only 21% of software vendors are using an indirect channel and only 4% a distributor….!
Sell direct79%
Sell indirect
21%
Software Publishers
Do not sell through
Distributor96%
Sell with Distributors
4%
Software Publishers
EMEA Channel Market
IT & Telecoms Partner
compuBase 2007 19
Africa: 19,000 ICT partners
Middle East
11,500 ICT partners
Europe 305,000
ICT partners
• An ICT partner is a company generating a majority of its business in IT & Telecoms or more than 300 K€ / year
compuBase 2007 20
Northern Europe: 55,000 ICT partners
Western Europe: 119,000
ICT partners
Eastern Europe:
45,000 ICT partners
Southern Europe:
78,000 ICT partners
compuBase 2007 21
Major Differences Between Distribution in the Big 5 and in the Rest of EMEA
Big 5 : Multiple strong broadliners A few very big VAD (often bought by broadliners..) Many specialist distributors A three-tier distribution system A lot of specialized IT partners
Rest of Europe One strong broadliner A few specialist distributors A two-tier distribution system Many Vars (The « we can do it also » resellers… )
compuBase 2007 22
Major Differences Between Distribution in the Big 5 and in the Rest of EMEA
Other EMEA large countries One strong local broadliner Few specialist distributors A great number or master Var or Master Reseller A two-tier distribution system A lot of Vars
Other EMEA small countries Overseas distributors Few strong Master Resellers or Master Vars who play the
distributor role. IT dealers not specialized
compuBase 2007 23
How Many ICT Partners?
Europe
Pure IT150,000
• The Top 5 countries represent70% of IT market value
• Other EU 20%• Other Western non EU 6%• Eastern represents 4%
• 80% of locations are HQ
IT + Telecoms + CE= 305,000
IT + Telecoms= 250,000
compuBase 2007 24
Where is the Growth?
Top 3Other
Western
Northern
Europe
Southern
Europe
Emerging markets
IT Resale
IT Service
Software
Telecoms
Home Digital
compuBase 2007 25
Business changes
The companies declaring resale as a main activity, represents only 34% of the locations and are growing again thanks to CE products
The companies declaring Services as main activity, represents more than 40% of the locations and are increasing, but specialisation is decreasing.
Main business Model (variation of weight in the industry, number of location) 2005 2006 2007 Var 05/07 Vol 2005 Vol 2006 Vol 2007Manufacturer 7% 6% 6% -6% 6495 6772 6783Software publisher 5% 5% 5% -7% 4909 5072 5104Publisher of software for a specific activity 6% 5% 5% -6% 5517 5759 5788Publisher of software for a specific process of companies 4% 4% 4% -1% 3642 3876 4034Software solutions integrator (developed by third parties) 3% 2% 2% -30% 2688 2279 2113IT services, Software development (hosting, maintenance, training, bespoke software development....)29% 29% 31% 7% 27990 30741 33367Telecom services (Telecom operator, ISP...) 3% 3% 3% -9% 3296 3301 3362Telecom & network infrastructure integrator 2% 2% 2% -2% 2210 2422 2415IT infrastructure integrator 2% 2% 2% -15% 2071 2137 1962Consulting 4% 4% 4% -14% 4361 4373 4189Reselling to individuals 11% 12% 12% 5% 10900 12745 12780Reselling to enterprises (hardware, software & services & assemblers) 16% 17% 17% 11% 15326 17999 18936Wholesaler (resale of IT and Telecom products to resellers) 5% 4% 4% -12% 4463 4456 4385Large Assembling company 0% 0% 0% -36% 206 167 146Other IT and Telecom connected activities 3% 3% 3% -12% 3360 3336 3291Total 100% 100% 100% 0% 97434 105435 108655
Changes are important
Over the last 5 years 29379 ICT companies have disapeared - nearly 30 % of existing companies of 2002
compuBase 2007 26
71%
0%2%
19%
8%
29%
Still in activity
Hardware Manufacturer
Software publisher ...
Services ...
IT & Telecom resale
Changes are important
Hopefully, we have detected 32 245 new companies
compuBase 2007 27
• Software business suffers from concentration and the challenge to go to Indirect. • Non Specialist IT Services still up.• Resale to end user is growing fast thanks to CE products.
New companies since 2002 Vol WieghtVar vs Business
WeightManufacturer 1243 4% -39%Software publisher 1300 4% -15%Publisher of software for a specific activity 944 3% -46%Publisher of software for a specific process of companies 823 3% -32%Software solutions integrator (developed by third parties) 492 2% -23%IT services, Software development (hosting, maintenance, training, bespoke software development....)11319 35% 13%Telecom services (Telecom operator, ISP...) 665 2% -34%Telecom & network infrastructure integrator 737 2% 1%IT infrastructure integrator 585 2% -1%Consulting 1370 4% 9%Reselling to individuals 4731 14% 23%Reselling to enterprises (hardware, software & services & assemblers) 6146 19% 8%Wholesaler (resale of IT and Telecom products to resellers) 1144 3% -13%Large Assembling company 39 0% -11%Other IT and Telecom connected activities 961 3% -3%Main activity non qualified 206 1% nsTotal 32705 100%
compuBase 2005 28
Germany
Concentration in process. Business back on track No centralised business but
stronger importance to the western part.
A door to Eastern countries. A door to Austria and
Switzerland. Strong mid size ecosystem. Around 46 000 IT & Telecoms
partner. 21 000 available at compuBase.
compuBase 2005 29
France
Concentration in process Business centralised around
Paris for HQ Growing importance of the
other regions especially western region.
A door to South Europe, Magheb and West Africa.
Around 35 000 IT & Telecoms partner.
23 000 available at compuBase.
compuBase 2005 30
Italy
Largest granularity in business Strong IT business in the north,
very weak under Roma. Very small companies and SMB
oriented Not concentrated Isolated in Europe At least 38 000 partners. 10 000 available at
compuBase.
compuBase 2005 31
Spain
Strong granularity in business. Two main poles of activity:
Madrid and Barcelona. Small companies. Dynamic market open to
abroad. A door to South America and
Morocco. Many HQ for Portugal joined to
Spanish HQ. At least 27 000 partners. 8 000 available at compuBase.
compuBase 2005 32
BeNeLux
High density of companies. 2 languages Small companies. Dynamic market open to
abroad. Brussells getting stronger
thanks to EEC. Around 22 000 partners. 8 000 available at compuBase.
compuBase 2005 33
Austria and Switzerland
Switzerland.• 3 languages.• Strong IT & Telco business.• Small companies.• Some European Financial HQ.• More than 6 000 ICT companies. • 2 100 available at compuBase.
Austria• A door to Eastern countries.• Weaker than CH.• Around 4 000 ICT companies.• 2 000 available at compuBase.
compuBase 2005 34
Nordic Countries
Medium and Small companies.
Dynamic telecom market.
Around 25 000 partners.
12 000 available at compuBase.
A door to Russia and Eastern countries.
compuBase 2007 35
Africa & Middle East
30,000 ICT partners Market driven by local
Master Vars or Master Resellers
Northern and Western Africa markets addressed often by French distributors.
Southern and Central Africa markets addresed by UK or RSA distributors
Eastern Africa addressed by Middle East distributors.
Fast in Growth rate but small value Market.
7,00011,500
5,000
3,000
2,000
2,000
compuBase 2007 36
Northern Africa….
Total # of partners: 7,000
A market driven by local distributors and French distributors.
Strong importance of governmental networking.
Business focused on the Mediterranean border.
compuBase 2007 37
Middle East
Total # of partners: 11,500
A market driven by local
distributors and UK distributors.
Strong importance of governmental and family networking.
Business focused on the Mediterranean border and Persian Gulf.
Address also Eastern Africa
compuBase 2007 38
Is the One/Two-tier Model Adapted to Emerging Countries?
Yes Vendors need local actors to understand the market and business
usages. A local distributor may address other areas in a country
No Distributors business organization is different in emerging markets
compared to well established markets.• Less point of sales in volume.• More multiple activity businesses.• Most local distributors are also resellers.• Most local resellers declared able to be a distributor.
compuBase 2007 39
Conclusion
EMEA market is not a fully fragmented market, but a multiple area market covering 10 different regions.
Business management must be adapted to each region specificities.
Country size and economy have a very strong influence on IT & Telecoms distribution organization.
1 tier / 2 tier model is NOT a standard in emerging countries…
Language and colonial history usually define the natural business flow.
Addressing cultural and business issues requires local support.