ABC Data’s Weiss identifies five top trends
by Stuart Wilson, Sunday 19 February 2017
Ilona Weiss, president of the management board at Central & Eastern European distribution powerhouse ABC Data, identifies five top trends that she believes will shape the future of distribution and the vendor landscape.
Weiss will attend this week’s DISTREE EMEA event in Monaco – an annual event where hundreds of tech brands meet face-to-face with senior executives from the region’s top tech distributors.
Weiss believes that the recent introduction and rapid evolution of new product categories has created a change in the strategy of major vendors, driving them towards an increased number of mergers and acquisitions (M&A) to maintain their relevance in the market.
Weiss stated: “Well-known technologies become more common and cheaper. This process demands profound changes in the largest manufacturers’ current strategies. Those players need to merge or acquire other entities to maximise the economy of scale and to increase the margins.”
“The global crisis which erupted in financial markets in the autumn of 2008 - and which many people have already forgotten about - may be the key factor. Only now are we able to see all the consequences of those events. After the crash in the financial markets, many global manufacturers had to reduce their expenses dramatically,” she added.
With barriers to entry coming down in terms of launching a brand and sourcing products, Weiss believes this is leading to an increase in the number of local brands attempting to establish themselves in the consumer technology space.
Weiss explained: “Increasingly common technologies are the reason of dramatically lowered entry thresholds for manufacturers’ own technologies. Smartphones and tablets set an example here. They are available in discount stores. It is not extraordinary. First, innovations are expensive, but they become cheaper with time. However, it seems that the dynamics of this process is stronger than in the past.”
“Within a few years, 600 new local manufacturers have appeared in the world. Many of them operate in Asia, but this trend is also clearly observed in Central and Eastern Europe, at ABC Data, which is the exclusive IT distributor operating in eight markets in the region. We cooperate not only with the global leaders, but also with smaller local vendors such as 3DGence, Kruger&Matz, Lark, Spectrum Group and Smart 3D,” she added.
Software and services
A growing number of companies will be interested in increasing their revenues and profits in the area of software and services, according to Weiss.
“It is stimulated by progressive digitisation of economies and societies as well as the Internet of Things (ioT), which is becoming more common. That is why at ABC Data we took a number of strategic decisions. Soon we are launching a new digital platform. We will offer a broad portfolio of services and also allow channel partners to combine offers of different suppliers,” said Weiss.
“All this is designed to create the best offer to the actual needs of resellers, system integrators and their clients. What’s more, customers of ABC Data will be able to issue their own services on the distribution platform,” she added.
Weiss continued: “We’ve also been developing our competences in the area of value-added services. Last year ABC Data took over S4E, one of the most important distributors with VAD offering in the region. In this way we increased our competence in the market of value-added services.”
Digitisation drives hardware demand
Digitisation of economies and societies will increase, but at the same time it will drive demand for equipment and consumer electronics, according to ABC Data.
“It is worth presenting several examples,” said Weiss. “When the Pokemon Go application gained popularity in the summer of 2016, sales of portable chargers grew dramatically. The reason for this was mundane. Pokemon Go and many other mobile applications, which are downloaded on smartphones in increasing numbers, make their batteries run down faster.”
“We may observe a similar correlation between games which are more frequently offered in the cloud and growing demand for components increasing computers’ performance. In the age of the IoT, we integrate a growing number of items with the network: laptops, telephones, fridges and even cars which we leave in garages. However, we need more powerful network solutions in order to efficiently manage and use a growing number of devices at home and in the office,” she added.
Many manufacturers will prioritise involvement in intangible goods in the future, which means products we use in the form of electronic files or internet services.
Weiss concluded: “A strong correlation between the digital world and the demand for tangible products may encourage manufacturers to invest more in hardware. Of course, this dynamic may weaken, but it will remain important in terms of budgets for research and development. Thanks to this, there is a good chance that subsequent breakthrough innovations comparable to smartphones will be introduced at the interface of two worlds: the internet and things.”