Feeds

Software and services – who needs them?

Leave well alone

  • alert
  • submit to reddit

Internet Security Threat Report 2014

It is a truth so obvious that no one says it any more because it is so obvious, that it is extraordinarily difficult to make big money building or selling PCs.

The big profits, such as they are, lie at the components level - not at the assembly, distribution, or retail level.

There is of course one outstanding exception - Dell. Scale economies, logistics thump, a successful direct sales model - all means that it makes more money out of building and selling PCs than any other company in the world. Unfortunately, the company is so - Q3 missteps and all - so far ahead of the pack that it is unrealistic for other PC resellers/builders to try and out-Dell Dell.

However, there are plenty of system builders left in Europe - 40,000-plus at last count, according to Microsoft's OEM team. This remains a significant resale channel. But where does the future lie? (No, we don't have the answer, we're just rehearsing the questions.)

Vendors, analysts preach software and services - that's the easy bit. It's a message that the financial community wants to hear, too. Which is why PC maker Gateway last week boasted that half its profits came from software and services. This percentage was five per cent higher than expected. Granted, this may have more to do with the fact that profits from PC manufacturing business, responsible for the overwhelming proportion of revenues. But how valid is the company's assertion that it is 'no longer a pure-play PC maker'.

Or to ask the question another way: how much software and services would Gateway have, if it didn't make PCs? Not very much, we suspect.

It's kind of obvious, isn't it? Most system builders/PC resellers have always sold software and services on the back of selling tin. Maintenance contracts, installations, a bit of networking here, a bit of accountancy software support there - all this is grist to the profits mill. But these profits are made from people and companies who want to buy kit, maybe from a local supplier, or from someone who's been recommended to them by a friend or colleague.

It's kind of obvious, too that resellers should stick to what they are good at. All this talk about the need to change is just that - talk.

Companies which are successful at selling PCs, which are good at delivery post sale, which don't spend money before they get it, which refuse to sell hardware as loss leaders, which avoid the temptation to buy no-name, no warranty components - these companies will continue to chase their customers up the value chain with software sales and services contracts. These companies -and there are plenty of them out there- have little to fear. ®

This article appeared first in Microsoft Partner, a site for UK resellers.

Secure remote control for conventional and virtual desktops

More from The Register

next story
Bladerunner sequel might actually be good. Harrison Ford is in it
Go ahead, you're all clear, kid... Sorry, wrong film
Euro Parliament VOTES to BREAK UP GOOGLE. Er, OK then
It CANNA do it, captain.They DON'T have the POWER!
Musicians sue UK.gov over 'zero pay' copyright fix
Everyone else in Europe compensates us - why can't you?
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
Forget Hillary, HP's ex CARLY FIORINA 'wants to be next US Prez'
Former CEO has political ambitions again, according to Washington DC sources
prev story

Whitepapers

Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
5 critical considerations for enterprise cloud backup
Key considerations when evaluating cloud backup solutions to ensure adequate protection security and availability of enterprise data.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Protecting users from Firesheep and other Sidejacking attacks with SSL
Discussing the vulnerabilities inherent in Wi-Fi networks, and how using TLS/SSL for your entire site will assure security.