Most people would agree that the 'digital home' market will be the next frontier - the next haven for growth in an industry where business IT sales have remained stagnant. In a recent report (see separate story on page 22), market researcher IDC tipped the digital or connected home market as a major future driver for IT growth in Australia.
A bevy of vendors will lead the race to capture the hearts and minds of consumer and SOHO buyers - the likes of Apple, Samsung and HP, and the ultimate winner, according to IDC, may be Sony.
These vendors are quickly designing product portfolios and market and channel strategies squarely targeted at the brand-conscious consumer.
And for some of Australia's large and small IT distributors, the digital home is undoubtedly an emerging and strategic area of focus for the future.
Kerry Baillie, managing director at broad-based distributor Tech Pacific explains: 'The IT-literate consumer is looking to do stuff at home which hasn't been done before so there's lots of disparate products coming onto the market and I think we can act as an integrator, as a channel integrator. 'We've got the biggest range of products at this point and we've got the presence in the marketplace to attract new products which go into this space. We've got a good presence in the retail environment - we were Harvey Norman's supplier of the year,' says Baillie.
Through its existing distribution arrangements with some of this country's biggest retailers, the distributor will be putting in place several initiatives this year to attack the home market. Tech Pac's retail business division grew by 45 percent last year - faster than the company as a whole, according to Baillie.
While admitting that it is not a critical market for the distributor, it must be seen as a leading proponent of the digital home. 'Across the board we're growing. If we didn't do the retail market, we'd still be a $1 billion company. But the thing is the excitement is in the digital home market,' he says. It's an aspect of our business and it's going to take several years [to build up],' he adds.
Recent distribution deals signed by Tech Pac indicate it is well on the way to completing its 'digital home' picture. Over the past two months, it has signed Cisco-owned SMB networking outfit Linksys, and Benq - a company with products targeted right in the heart of the consumer market.
Consumer products and how they fit into a total home network solution are a dog's breakfast, but the key will be finding these products and making sure they glue together, says Baillie. 'If you listen to Sony, they say everything will be a gateway - the TV will be a gateway, the PlayStation will be a gateway, the PC will a gateway and they all talk to each other,' he says.
'In that context, Tech Pacific can hook the PC, TV, PlayStation and home cinema from one company. If someone wants to have an integrated home tied to the Internet, we can provide them with those things. But in some ways it's more complicated than the office.'
'What we need to be able to do is say: "OK, in that space we can deliver that product and [act] as a one-stop shop",' he says. 'The distributor will be able to offer discrete parts or the total solution.'
The retail and reseller channels are already aware of the trend and companies like Harvey Norman, Myer and The Leading Edge Group are starting to think about the opportunities. 'Even now Leading Edge have people that will go and install stuff at offices and at home.'
Baillie says that there is an opportunity for the reseller channel to charge by the hour for these types of services. 'We've got to move away from this idea that everything's bundled into the price,' he says.
Joshua Velling, systems and peripherals category manager at the distributor, adds there are opportunities for the company to expand its consumer portfolio as it starts to aggressively target the home. 'More on the accessory side of the products.
Clever types of remote controls for instance. There's an option for us to look at products in that space. 'We could enhance some of our appliances - bring more of the media centre-type products to the market. That's the first step. The second step is to provide the communication to the resellers that these products are available.
'There will be certain resellers who today may not be focusing on this product set who have a relationship with Tech Pacific who can take advantage of having a source of knowledge, a source of supply, and who either can leverage expertise that we've developed in-house or their own expertise to take product to market. Our gaming strategy is part of this as well. There's room for us to take on [additional] software titles,' Velling says.
He agrees that there is scope in certain areas for channel partners to get their head around consumer technology, do installs and introduce it into the home.
This year, reseller training will also be offered around how to sell the digital home concept. 'That's obviously going to be one of the big opportunities - to get the reseller community used to the technology.'
At the end of March, the distributor will use its ExpoTech show to display home technology working with a mock home setup. 'I think it's to provide a number of vehicles to show the technology - because there are devices now that store video content on hard drives, which gives great versatility for viewing. You can come in, start watching a program, go and make yourself a coffee, and then continue watching the program but it's 10 minutes behind the actual live broadcast,' he says.
Tech Pac's fiercest competitor, Ingram Micro Australia, is taking a softer approach to the home space.
Steve Rust, managing director at Ingram, says the distributor is looking to work with several traditional consumer electronics manufacturers. The company already has distribution agencies in place with the likes of Samsung and low-end networking outfits Belkin and Linksys. Samsung products are 'going gangbusters' he says, adding that the distributor is looking to broaden its range beyond Samsung printers and monitors.
Ingram's US parent company late last year set up a whole division to address the converging of consumer electronics and IT. 'I think it will go right through the corporation. This year is going to be a year of engagement in this space.
Retail is a tiny proportion of Ingram's business at the moment compared to the SMB and corporate channels. 'We don't have a major thrust into retail but it's an area that I'm watching and thinking about. 'A year ago we'd never be talking about this stuff,' he says. 'It's a happening thing. This year will be about building foundations - sales strategies of supplier arrangements. Some of my competitors will probably get there before me or after me,' he says.
The distributor will 'build the foundations' for a stronger SOHO/consumer business this year. 'It's not going to go gangbusters for us this year. It's still in the early-adopter phase.
'But there are elements that are taking off. The LCD and plasma screens are going gangbusters. We can't sell enough of them. Some of the accessories at the bottom end like Belkin - we doubled our sales last year and we'll double our sales this year,' he says.
Rust says although the home market is not quite a strategic market for the company right now, it's an 'area that we have some thinking around wanting to penetr
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