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.

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

"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)

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