Small Business Buying More Computer Hardware Online, Report FindsBy Nathan Eddy | Posted 2010-06-14 Email Print
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As U.S. VARs struggle with increasingly fragmented market channels, a report from AMI finds small businesses are more frequently turning to online channels for their computer hardware purchases.
A report from IT market research firm Access Markets International (AMI) Partners, Inc. found small businesses (firms with less than 100 employees) in the United States are increasingly relying on online channels to purchase computing hardware and packaged software solutions, a far cry from the days when retail stores and channel partners were overwhelmingly the most relevant channels that catered to small business.
The report noted that while channel partners and retailers still have the highest share of small business spending on basic computing products such as PCs, printers and peripherals, these channels are slowly losing share to direct market resellers (DMRs) as well as online vendor direct. The report concluded the reason for this loss in share in the small business PC and printer market is due to almost fully penetrated markets, particularly in mature countries like the United States.
"Local computer/electronic stores, also known as storefront VARs, still have a strong presence in emerging markets," said Avinash Arun, manager of the channels practice at AMI. "IT maturity among SBs (small businesses) in emerging countries is low (compared to the Americas and Western Europe), and therefore these firms especially need external support for sustaining their IT environments. The local stores serve the purpose of both a retail store and a channel partner: a small business owner or IT manager can walk into their neighborhood electronic or IT store and have a 'touch and feel’ experience, while receiving essential service and support for installation, maintenance and troubleshooting."
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As a result, most new purchases are replacements and as a result small businesses are more informed and knowledgeable about their needs, making online channels a more efficient buying experience versus visiting a retail store. AMI noted another channel that’s slowly gaining traction in the small business and mid-sized business computing hardware space is the telecommunications provider. The report revealed telcos, which have been the predominant channel for Internet and telecom products and services, have been expanding their presence in the IT market over the last couple of years, especially within mobility and hosted services.
Arun noted the telco model is "shifting as we speak" and said AMI expects telco market share to vastly increase in the IT markets over the next five years. "Telcos are leveraging their vast customer base to provide add-ons, such as notebook PCs, netbooks and software solutions, bundled with broadband and voice services," he said. "This enables SMBs to purchase a greater number of IT and telecom services from a single provider."