by Steven Cohen, MD of Softline Pastel
The online world changes everything and its frightening how big the change can be. Apart from revolutionising the way we conduct business and accounting processes, cloud has the potential to change entire global software distribution channels, leaving a disconnect between clients who rely on distributors and not their vendors for support.
Trouble brewing
Recently, a U.S. developer of a globally renowned brand of accounting software terminated an agreement with its Australian distributor because of a divergence in their online strategies. This wasn’t an insignificant decision and caused a share price plummet of 6% for the listed Australian company. The result for end users in Australia is that they are left without the support and technical expertise that a local distributor is equipped to handle. Considering cloud can be hosted anywhere, it was no longer necessary for the U.S. company to rely on an Australian distributor to capture that market and it simply directed the end users straight to America, keeping the profits. On the flip side of the coin, the Australian company became concerned about the legal implications of hosting user’s data overseas, which then falls subject to those laws. For example, in America, legislation states that government can access data at any time if need be.
What does this mean for us?
So, what happens if a foreign vendor cuts off its distributor in South Africa? This poses two serious questions for local end users. Firstly, clients are potentially forced to move onto a cloud solution based in a foreign country, with data subject to that state’s jurisdiction. Secondly, without a local distributor there is no provision of backup support, technical expertise or training - leaving end users in the dark. Essentially, dealing with distributors who operate through vendors in other markets poses serious risks.
Riding the storm
The safest bet is to remain close to vendors that operate in South Africa, who develop and supply their own online products to the local market. This will ensure readily available backup and technical support with data safely hosted close to home and subject to our laws and regulations. Times are changing and technology continues to shape business faster than many are aware of. As a client, the trick is not to get sidelined in the equation, so that business and accounting processes can continue to operate the way they should with cloud– better, and with all help close at hand!