The Graying of the Channel

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New people aren't coming into the reseller market, fretted one veteran of the accounting software wars, who continued that he worried about what that means for the health of the industry. And it's hard to miss the observation that at many conferences, it appears that the same people who were leaders 15 years ago are still the visible stalwarts of the business today.

There is a difficulty here. But it may not be one that's really solvable, because this graying of the business reflects the consolidation of the market.

Twenty or twenty-five years ago, it was comparatively easy to start a software reselling business. Sometimes, people got into it by accident-they liked developing programs. They had an accounting background. What many didn't have was the knowledge to juggle all of the skills needed to run a business. They've gotten that through on-the-job training.

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However, it's not that easy anymore. Vendors require minimum staffing levels for most products. The need for technical skills is higher and it's certainly harder to compete as a novice if you're up against people who have been able to either hone their own business skills or hire the professionals to take care of operations.

Face it. It's tough for somebody to start a new reselling practice from scratch the way many of the veterans did it.

That means that fresh talent doesn't flow into ownership positions easily. The talented people can start out and work their way up, but that squeezes out much of the vitality that comes from the entrepreneurial stage of a market. And as a company gets bigger, it's more likely to reach out to a business veteran who has experience running companies than to cultivate homegrown leadership, if what it needs is to fill a spot quickly.

What that means is when industry leaders get together, they will tend to have more gray hair than in the pioneering days of reselling.

All of this is a little bit like saying that not too many people are starting new automobile manufacturing companies. And in computer manufacturing, not many people can emulate what Bill Hewlett and Dave Packard did starting out in a garage, because Hewlett and Packard were so successful.

We've seen what happens to the fresh talent-it looks for other opportunities, for needs that are not being met. The dot-com era of the 1990s is an obvious example and the well-publicized growing pains of the Internet, while dramatic, aren't terribly different than the birthing process of other channels. Railroads went through the same thing in the mid-1800s with similar results-a lot of start-ups sprang into business and most failed or were acquired.

The simple answer is that this cycle will not change. Getting new blood and new thoughts is a good thing, but it takes a more conscious effort than when the business was new and different.

After all, would the people running reselling operations today hire somebody that had the same skills they themselves had 15 years ago? I doubt it.

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