Posts by The Godfather 606 publicly visible posts • joined 7 Oct 2011
Vendor and Distributors are in the business of selling traditional product and software. Vendor and Distributor 'cloud service' offerings are a misnomer, they are simply bundled packages designed to fuel or drive stagnant product and software sales.
The threat to traditional manufacturers and Distributors has never been greater and only those that adapt and work within new technologies and models will survive. Acting like King Canute is folly.
Nothing new, dealing in grey has been around for decades....sole responsibility rest with the manufacturer for screwing around, playing silly games and making real margin for those down the food change nigh impossible.
Oddly, they turn a blind eye when it suits them.
Microsoft does not have five years....it needs to change things within two. re-shaping and splitting it up will provide more focus and so will doing most of its business direct. They have started this process and need to accelerate it.
Microsoft should have recognized its vulnerabilities given the entrance of new major players at least three years ago.
He could perhaps have been more brutally honest but he clearly hits the nail on the head in summation. It will take an awful lot of digging to get HP out of its current hole. It needs to divest some elements and forge ahead in serving its own interest above those of 'the channel', which changes suggest is an increasingly obsolescent and meaningless route to its ultimate market.
It's academic, the harsh reality is that it is not now possible to have oodles of independent OEM's vying for business share against a growing band of very large and operationally very efficient production lines. Throw in the fact that tablets, (aside those form Apple) are shrinking price to win market share and the likes of RM have no chance. Quite frankly, even Stone and Viglen now face significant pressures.
RM have done the right thing, albeit about a year or two too late.
Banks and lenders have been more accommodating on debt and less eager to put the boot in. What remains fascinating is the transition to services, something that requires time, patience, money and planning and all four are often missing in the case of most traditional VAR's and indeed wholesalers.
Pressure point is margin and this in traditional reselling activity has declined horribly in recent years and an ability to borrow against a strong balance sheet, core to fundamentally re-shaping your business or planning for growth is lacking in far too many.
There will be more casualties as we move into 2014 and some will be big, like 2e2.
'Services account for very low single digit revenues at Insight Europe and surely this will be one of the strategic priorities facing Ebermann - to build a portfolio and wrestle control of its destiny from the whim of a vendor'.....
easier said than done given one is an e-commerce wholesaler..
Folly of acquiring businesses at inflated values and where continuity and integration fail to deliver sufficient profit to meet interest payments. Yet another 'zombie' business and the acquirer will need to have done their own homework soundly as their balance may well end up looking like that of TES Group, 'zombie' like.
Unsecured creditors will be miffed, make no mistake and sadly people will be shed despite any early promises. This is an inevitable consequence.
This is the latest change at Misco, which in February rejigged account management based on verticals markets* and postcodes rather than by vendors,
Misco is a wholesaler/etailer/sub distributor and this type of business cannot morph into anything other than what it is.
It'll just keep cutting cost until there is none left to cut
A business sadly on its way out and with no escape mechanism or alternative path.. It's cash over the years should have been used more efficiently and not been used to prop up declining sales and profit. Another couple of years of similar decline and its fixed assets will be higher than its current. Was a terrific cash generator in its heyday and should have used it invest in growth.
Ability to generate proper profit out of traditional supply means scavenging for every cent and frequently not knowing precisely what meagre amount you've made until all the various calculations/permutations are finalized.
Horrible squeeze in the middle and tougher still when you have to shift what meagre profit you make in order to minimize tax liability too, otherwise there is naff all left in the pot.
Check any foreign owned company in the UK (specifically the US owned ones) and they're all the same and all at it.........hitting Google given the profit they generate is a bit harsh.... they work around the rules because the routes are clearly marked and permitted.
Two green bottles standing on the wall, two green bottles standing on the wall and if one green bottle, should accidentally fall there'll be one green bottle standing on the wall..........but not for long.
Bit of a turkey-shoot for the big four's insatiable appetite....'your turn next then mine again'
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