The End for the Single-Sevice Reseller?

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Efforts by businesses to consolidate the number of suppliers they are working with will drive significant changes in the channel over the next five years, expects Annodata, as single-service resellers struggle to compete with those that are multi-faceted and can deliver a wide range of services.

The mounting complexity of IT estates and the ability of technology to deliver competitive advantage has driven many businesses to seek to streamline the number of suppliers they are working with and, instead, partner with a smaller number of trusted suppliers.

Commenting on the trend, Rod Tonna-Barthet, Annodata’s CEO, said: “Many clients we serve are now actively looking to cut down on the number of suppliers that they are working with. It is a nonsense, not to mention inefficient, to use one supplier to provide your print, another to supply your communications and someone else to provide your IT and desktop. All of these services are connected to the same network and are increasingly becoming unified in their application, not to mention the fact that it’s just impractical today to rely on half a dozen suppliers to provide these services. Ease of vendor management is increasingly becoming key to many organisations as they look to improve efficiencies and reduce costs.

“Businesses don’t want to deal with multiple points of contact if they can just deal with one trusted and strategic partner who can support and resolve a range of services for them. We are experiencing this across both private and public sector organisations. Currently many single service support businesses are making it extremely difficult for themselves to succeed. If you can only supply one item on your clients’ shopping lists, you’ve either got to be extraordinarily good at that one thing or extraordinarily cheap. Otherwise, your business will become extinct.” he continued.

“Over the past decade, with the advancement in mobility and the Internet of Things, this convergence has become more evident. This is why we have been making significant investments in broadening and developing our capabilities, expertise and breadth of services. In the past year we’ve made successful acquisitions in the IT and wide format print arena. Our heritage in the print market has given Annodata a distinct advantage as we already have nationwide coverage and service support meaning we are able to provide services directly. The challenge many single-service providers now have – particularly those in the comms space – is that you’ve got to invest in the infrastructure behind the scenes to be able to deliver and employ a multi-service strategy. That’s a big investment that I suspect a lot of resellers aren’t in a position to make so I think the drive to consolidate suppliers will see many struggle over the next year,” he concluded.