Putting the Pieces Together

Resellers may offer cheap parts as a quick fix solution to meet customers’

demand for improved per formance, but the only alternative to staying ahead in

the technology race is to upgrade. Whether it means adding more memory or

improving a system’s graphics capability, upgrades also make an appealing

market for resellers, at least in the short term. However, resellers are finding

it difficult to survive on upgrades alone and are juggling their offerings to

create a balance.

Despite

the rapidly dropping-prices of PCs, VARs and distributors are finding ways to

keep customers up to date without asking them to shell out big bucks for

replacing an entire line of products. Cheap parts offer a quick fix for pressing

performance needs, while leasing provides an alternative approach to staying on

top of new technology.

"Installing entirely new systems often requires more time and money than

adding new components," says G Giridhar, partner at Secunderabad-based

Compage Data Products. "Even with fast and cheap new computers taking off

in a big way, business for upgrade parts is yet to wane," he said adding

that his company has witnessed sustained demand even at times when they expected

a falloff.

Adnan Kambati, CEO at Innovation Infotech cites "the need to squeeze

more value out of existing assets" as a possible reason for customers to

postpone buying of new systems. "It may be a stopgap measure. You’re just

trying to increase the life span for another six months or a year," he

elaborates.

"Many buyers also try to time their purchases. Waiting a little longer

before replacing equipment can often lead to greater savings for relatively new

technology," explains Kambati. According to him, "In terms of specific

products, memory is one component with prolonged demand. Also with RAM coming so

cheap, it’s obviously just flying off the shelves. It’s the cheapest,

fastest way to get performance out of a dead box."

Global majors like Samsung and Intel are also looking at the upgrade market

very seriously. Samsung already has a scheme where an old hard disk can be

changed in for a new one. "This is to attract customers towards upgrading

their PCs. We all know how the market situation is and customers have become so

much aware that they don’t want to overspend anything. Upgrade of system

offers them a lucrative opportunity to get the best of the two worlds,"

says Kambati.

Experts suggest that despite the availability of new, cheap systems, old PCs

will continue to remain popular, as people still want to expand them and keep

them relatively fresh. Monitors and CDR/CDRWs are yet another favorite upgrades

driving the market.

Leasing provides another option in the replace-or-retrofit dilemma some

organizations face. However, the concept is catching up only in bigger cities

and Metros. According to Kambati, "It’s becoming popular by the day in

the big cities where there are margins under this category, but in Hyderabad we

are still to make inroads into this".

Leasing makes for a more flexible arrangement for many customers. Notebooks

are especially becoming popular in places like Delhi and Mumbai. "It makes

a lot of sense for people to talk about leasing notebooks because the technology

changes so quickly, and upgrading on a piecemeal basis isn’t really an option

with a notebook. However, leasing is not functional in the Hyderabad market, but

if it picks up everywhere else then we would also look forward to it, "

says Kambati.

Experts, however, suggest that only a few resellers are looking to survive

solely on upgrade contracts as competitive pricing and new purchasing

arrangements give customers more options if they want to add RAM or a faster

CPU. "Upgrades really are the thin edge of the wedge," says Giridhar,

explaining that it can, however, open door to other contracts. "Let’s

look at it from the reseller’s perspective. Every time I have an opportunity

to make a meaningful sales call on my client, I have an opportunity to sell

something," he adds.

Giridhar also cautions that upgrades alone cannot be the means of survival

for most of the resellers. "Nobody upgrades a system because someone sticks

another product up their nose. Upgrades happen only if the customer is shown

that the way they’re doing things is inefficient or too costly . . . it’s

not a product issue, it’s usually a service issue," he cautions.

Zia Askari



(Cyber News Service)