Opinion: Profit? It's around here, somewhere...

If running a channel business was easy, everyone would do it. Or so goes the cliché.

Competition is as rife in the channel as it ever was, but this year we have seen such dynamic changes that bricks-and-mortar companies are moving as fast as their so-called dot-com counterparts.

For example, you will note that since we compiled this information, at least two notable players - Edge and Dataflow - have dropped off the map. In the service provider space we have seen BHP IT swallowed by CSC, while in the reseller category Powerlan has continued on its acquisition trail with Sunrise Computer Systems.

But let's get to the core of the issue here. The channel 100 is a valuable guide for benchmarking competitors and partners. But, and there's always a but, there is more to the story. The issue that I suspect will creep into the debate will be the comparison between revenues versus profits.

Revenue figures are a source of pride for many companies, particularly for distributors. But in the long run, what do they really mean? Let's look at some revenue numbers, by way of example. Tech Pacific has stormed away with revenues of $1.2 billion, followed by Ingram Micro at $380 million and Express Data at $310 million.

What I want to know, as I'm sure do many resellers, is who makes the most profit? After all, profitable distributors can reinvest in the business and will be around for longer. Try extracting detailed profit information from distributors and you realise extracting teeth would be easier.

The same situation can be found in the reseller and service provider categories. Large service providers in particular are extremely cagey about revealing even Asia-Pacific revenue figures, let alone profit information.

I challenge you to study the results and give us your feedback. If you don't believe the figures for any company's 1999 results, tell me why.

We have already begun preparations for the 2000 Channel 100, so your feedback will help mould our study of the most influential players in Australia's corporate IT landscape.

Mark Jones is the editor-in-chief at ARN. Contact him at mark_jones@idg.com.au

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