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Distributors direction: Getting more mileage out of existing assets

Distributors direction: Getting more mileage out of existing assets

itX general manager, Greg Newham, is gearing up to take advantage of increasing demand for virtualisation and on demand software.

Managed services and software-as-a-service are opening up new ways of delivering technology. Is there a role for distributors in that game?GN: We have tried to leverage managed services in the past and typically speaking, partners need to own that. We tried to offer our services to the partners ‘as a service’ to give them some opportunities, but that’s hard to achieve, so we’re keeping right out of that. Softwareas- a-service though? Defi nitely. I don’t think anyone really knows how it is going to manifest and what role distribution will play in that – and also, where are the margins. I see distribution doing most of the hosting for example, and certainly the billing. Not all software vendors are large, or have big footprints in Australia, and won’t be equipped to do all this themselves, and we are optimistic there are opportunities for us.

There’s a reason why vendors deal with distributors – they need a point of aggregation, and to leverage our bigger footprint around the country. We have credit accounts with most of their partners and they don’t, or don’t want to, manage that. I don’t think we’ll be made redundant because of SaaS. It’s the same reasons why licensing provides opportunities. It’ll be a new dimension to the business. Not all products lend themselves to this model, and there’s a lot of legacy software out there. While it may offer some challenges and opportunities, we’ll just roll with that and do what’s required. GN: Our focus is really on what we’ve got – there’s a lot of mileage to be gained out of virtualisation. For example, with Wyse thin clients, with desktop virtualisation. We see ourselves as well positioned with our vendor portfolio. I wouldn’t change it as I think we’re in a strong position.

In terms of what’s on the horizon, I don’t know that there’s that much new coming out that will make a material difference to the market. Those sorts of things don’t come along very often. As customers look to get more value out of what they’ve got… through better use of software and the advantages that gives you, that will be a good selling pitch for partners. As a customer, that’s what I want for my business – I want effi ciency without spending a lot more money.

The Pipeline marketing initiative has been a major value-add for itX. How is that progressing?

GN: There are a lot of resources in that with our marketing team, and the focus at the end of the day is generating leads. I’m pushing my guys really hard to generate leads, and the campaigns are being recognised by our vendors internationally [itX won IBM’s global Lotus Value Added Distributor of the Year award last month]. It’s available to all the vendors, and the majority have taken it up or got something coming.

The Australian dollar exchange rate has been a critical issue for distributors in recent times – how has itX dealt with that?

GN: It forced us to review our foreign exchange policy and changed the way we deal with currency today to try and mitigate it. It had a huge impact on everyone. As a distributor, you’re expected to try and maintain pricing and eat the problems, and there’s only so much you can do when you have to buy currency at some point – if you buy at less value than you quote it, you’re in trouble. But it has caused us to be smarter, and we’re in a healthy position now. Hopefully, we’re through the worst of it. There has been signifi cant change around the vendors you work with – most notably, Sun appointed Express Data as a distributor this year, and Citrix has brought on Ingram Micro. ---pb--- Is this going to change the way you take products to market?

GN: We have been doing Sun for a very long time and have lots of expertise. ED is only doing the volume products, and that’s a very big market. From Sun’s point of view, you need a big footprint. I don’t see it making a difference or our market going backwards – the more people talking about Sun in that space, the better it is, because noise creates activity and we’ll benefi t from that. If anything, we’ll just continue to work harder. A bit of competition is not a bad thing.

From a vendor’s perspective, you’ve got to continue to look at how you go to market. And a number of vendors have made big acquisitions and gone into product areas they’re not familiar with, which causes them to look at how they take those to market and if the current channel is appropriate.

In the Citrix example, they’ve had the Citrix Access Essentials product for a long time in the states. The issue is it’s a low-end product, and they don’t want it to impinge on their current channel. That’s why they’ve brought on Ingram and if I was in their position, I’d do the same. It’s the same with us and Apple – we only sell the big stuff and aren’t concerned about the little products. Distributors have strengths in different places.

Can everybody survive?

GN: Consolidation is inevitable. While there’s more consolidation, there’s also more new players coming in. That’s just the way it evolves. Maybe these times encourage this to happen. If it gets as tight as it’s supposed to be, then that may cause more companies to look at ways to change their business model and we’ll see more consolidation.

I think there will be more of that – the smaller players are looking at how they can compete in a bigger market, and businesses will re-evaluate where they are at. At anytime, there are winners and losers.

Are there any other trends you expect to emerge in 2009?

GN: In terms of what is happening in the market, I think it’s a time for people to concentrate on the basics. It’s not rocket science – we just have to work harder, look for those sales opportunities and put ourselves in a better position by talking to more people. Leveraging solutions is another important thing as customers are going to want partners to talk to them about solving the total business issue.

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Tags virtualisationitXgeneral managerGreg Newham

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