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Models Change, Do Companies?

December 17, 2013

Having been in the electronics and computer industry long enough to remember why we used to call it electronics… Okay, whatever.  I’ve seen distribution of components and systems from several viewpoints.  The Register wonders if the old distribution models are still valid.  It’s all about what value you add, after all:

For a simple box-shifting distie it’s difficult to see what the value added is beyond the basic logistics of the process. Someone does indeed need to get the boxes to where they’re wanted and perhaps a specialist will be preferred over and above DHL or UPS. But that is the comparator: hefting PCs around the country doesn’t require much more skill than they have so margins are going to be like theirs too.

For the distributor with a wide range of equipment and spares and repairs, well, if people will indeed pay for the just in time delivery then there’s a margin to be made there. But for both the competition is only a click or two away on Amazon, and so margins are going to be squeezed yet again.

For those providing an actual solution to a problem it will be rather different: as it will also be depending upon which solution is being offered. Basic networking is now simple enough that no one’s going to be making a living at it but those who really are adding value in the eyes of the consumer will be able to carry on.

There’s a lot to be said for handling logistics, but most of that would be on chat these days with a kind support person.  The evolution to online and cloud retail options is really stressing the old guard that did such a good job at serving the needs of small customers and individuals.  But, like the electronic component and VCR belt before it, the growth of online likely hurts the non-service industry.  There’s still plenty of need for people to do the installs and run the backups.  But this is problematic in that you lose a local option for a workforce that’s less computer savvy.

Sure, the growth of technology education is there.  Yesterday I was wowed by someone younger than I am who could type on a phone virtual keyboard as fast as she could talk.  But then again, there are plenty of people who can use it without knowing how to keep it running.

Living a little farther out of the city than I used to teaches me that there are still plenty of opportunities for tech and non-tech.  I wonder how those jobs will get squeezed out of cities over time, though, as culture drives away people who want to work amidst less tech noise.  That could be some new form of digital divide that could be interesting to watch.

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