ADVANCE – Advance Your Business


Small ICT players feel the squeeze

Posted in Uncategorized por Dagoberto Hajjar em 22 de agosto de 2014

É com grande orgulho que tive meu artigo selecionado para ser publicado no site de Canais de Vendas e Distribuição da Europa, Ásia e Oriente Médio (EMEA).  Para acessar o artigo no site de Canais EMEA:
http://www.channelemea.com/spip.php?article31262


Small ICT players feel the squeeze
For the first time in nearly 20 years, the Brazilian economy now has a massive impact on the technology marketplace. In a recent survey of 2,500 Brazilian technology entrepreneurs, 30% indicated they billed less in the first half of 2014 compared to the first half of 2013. The first quarter results were bad, but the second quarter was abysmal, Brazilian respondents said. Entrepreneurs, for the first time in history, are alarmed and project a growth of just 6.65% for a market that has been growing in the last 20 years at a rate of 12% to13% year-over-year.

Executives of smaller companies are more optimistic. They even predict the ICT market will grow 12% and GDP will grow 3%, while economic analysts say the Brazilian GDP will grow less than 0.9%. These same entrepreneurs have reported, in the last six quarterly surveys we did, that their actual financial results were below planned levels. So this ‘optimism’ from executives of smaller companies does not reflect their reality. Even so, they continue with optimistic expectations, and in the next survey, they will more than likely report that they did not meet their targets.

Executives of larger companies, on the other hand, have access to better information about the market and can set their forecasts, plans and budgets more accurately – including their bets on market growth and the performance of their companies. These larger companies, back in late 2013, understood that this was a long -term crisis and have repositioned their companies, developed new products and services, and looked for new customers – backed up by significant marketing and sales investments. Smaller companies cannot afford to make such investments. As a result they have a had very hard time changing gears, or repositioning themselves in the market.

Larger firms have better planning and execution and so they are accounting for better results. This means that revenues are shifting from smaller to larger companies, which will in turn speed up market consolidation.

The Brazilian ICT market has been a market leader in terms of the total number of merger and acquisition transactions for the past 10 years. Our recent survey shows that 61% of respondents are interested in selling all or part of their companies. Smaller business owners set succession or business transition as a major concern for the next two years, as they see retirement coming closer.

Investment trends
Shouldn’t customers be seeking technology as a way to minimise the impacts of the crisis? Shouldn’t they use technology to reduce costs and increase sales?

According to our research, technology suppliers have never generated so many proposals, but ‘closing just does not happen’, even with maximum effort and resources on the sales side. The exception is the channel partners of large ERP vendors that are selling more than they can deliver.

This crisis has made technology companies focus their sales teams on larger clients, instead of the famous SMB sector. This strategy will only further hinder sales because the lake where we find the larger companies is much smaller and everyone will be trying to fish there.

Elections have become an increasing concern. Respondents said uncertainty about the outcome has made customers ‘step on the brakes’. About 30% cited the fact that, in the coming months, we will have a ‘war’ in terms of elections. This spooks investors and customers become more cautious in terms of making investments in technology.

Entrepreneurs think that the current crisis will last until 2016 and it is unrelenting in terms of its impact on smaller ICT companies.

Despite this challenging scenario, Brazil is still a good bet for international companies that can work with solid plans and display excellent execution. No wonder we just had two US distributors buying large Brazilian distributors.

Deixe um comentário

Preencha os seus dados abaixo ou clique em um ícone para log in:

Logotipo do WordPress.com

Você está comentando utilizando sua conta WordPress.com. Sair /  Alterar )

Foto do Google

Você está comentando utilizando sua conta Google. Sair /  Alterar )

Imagem do Twitter

Você está comentando utilizando sua conta Twitter. Sair /  Alterar )

Foto do Facebook

Você está comentando utilizando sua conta Facebook. Sair /  Alterar )

Conectando a %s


%d blogueiros gostam disto: