Slow down coming in South African ICT sector?

Computing

South African technology resellers of all sizes are facing renewed cash-flow pressure and finding their livelihoods more threatened than ever before. Pierre Spies, CEO of Tarsus Technologies says these challenges stem from a combination of the slowdown in the technology market and the rising interest rates.

"The slowdown in the market has meant that on the one hand, resellers are making smaller revenues, while the rising interest rates on the other hand, has meant that their costs are increasing." Spies says that this is evidenced by the fact that his company's 'debtors days' have slipped by as much as 15% since the beginning of the year.

"The liquidation rates in the channel have gone up exponentially in comparison to a year ago. We see medium-sized customers going out of business on a weekly basis," he adds.

While small resellers are making a living out of loyal relationships, larger resellers are making ends meet by leveraging their economies of scale. But even these resellers are feeling the pressure.

"It's clear that something has to give," says Spies, "since this is a problem that threatens the health and longevity of the entire channel.