FEATURE VAD
distributor has demonstrated with its vendor partner is its flexibility to EMC’s tactical changes as well as its readiness to enter jointly into any operational investment. “They are flexible to change whenever we need any change and we do not feel the resistance. Whenever we are investing they are investing together, without waiting for any returns,” he says. From a Computerlink’s perspective, it puts down its success to an indepth understanding of what EMC requires. There is considerable transparency at the management level and the high quality of sales and technical talent at Computerlinks has helped to strengthen the relationship. “We are seen as an extension of EMC’s sales force, so that partners use our resources in the market for the whole sales cycle. At the end of the day we are one team and we are flexible in our approach,” says Kieran Hernon, Sales Manager, Computerlinks. His biggest challenge is to find good sales, business development and presales talent in the storage arena. Another example of the importance of partner skill levels is from Sourcefire that provides cyber security solutions for the global top 2000 organisations. “The Sourcefire product is an extremely sophisticated product. If you do not implement it correctly it is not going to work and the customer will not be happy. We would not sign up a transactional partner for this; that would be a disaster. They would not know what to do with it, how to install it and not be able to integrate it. Sourcefire business is all about quality, not quantity, says Anthony Perridge, Channel Director EMEA, Sourcefire. Across the region Sourcefire uses FVC and Secureway Networks as its distributors and has four reseller partners. From Westcon’s point of view, the services its partners rate of highest value is the assurance of being offered the most appropriate solution that meets their end user requirement. “While buying the right solution the risk is sanitised by Westcon,” says Menon. Another fundamental difference between the two types of business models is the profit margin structure. A broadline distributor usually operates at margins from 1% to 4%
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Reseller Middle East
FEBRUARY 2012
Complete transparency with EMC, Kieran Hernon, Sales Manager, Computerlinks
model
Computerlinks is a blueprint of a value added distribution
and works on volume turnover rather than margin gains. The motto is always pile them high, move them out fast and it tends to be a fulfilment business. “For a value added business, if you are doing business at 4% margin you will not make it,” says Menon. The recurring cost base of value added business is much higher than a broadline business and includes a team of skilled technical resources, investment into proof of concept centres, investment into continuous product and technology training and longer lead time for orders. Going into the market and selecting a piece of technology overnight does not complete the transition into a value
added distribution model. “If you have a great piece of technology and put it in a catalogue and send it out to 3,000 resellers, it is not going to sell itself. You need to educate the market and you need to train and support the resellers,” explains Lockie. The two business models are so fundamentally different that most players in the field reject the possibility of a broadline distributor migrating to a value added distribution model. Some of the measures being taken in the field today are half way, down the road initiatives, to access products that are in between a value added model and a broadline model. “You can dress yourself up to be a bit more value added than the guy down the road. You can pick up products pre-commodity, give them special treatment and over time take them through mid value distribution,” explains Lockie about some of the initiatives in the market today. “But it is a long and arduous process to make the transition,” concludes Menon. //