In August, B.C.-based white-box manufacturer Seanix Technology stunned the industry by striking a deal with Tech Data Canada which both parties hoped would let them combat challenges from Dell Canada.
The arrangement between the companies’ leaders was big enough that they share a high place
on CDN’s newsmakers list.
Seanix sought a way to increase production and broaden its exposure across the country, while Tech Data Canada wanted its resellers to have an offering to slow sales from going to Dell.
After three months the partners are delighted with the pact, which lets Tech Data Canada resellers quickly deliver build-to-order desktop and notebook PCs through an online configurator.
The product line has already increased from six to 15 configurations.
“”We’re selling lots of product and signing a lot of customers,”” said Seanix president Paul Girard.
If things stay the same over the first 12 months the company could sell up to $4 million in hardware under the program, and lots more if the program really takes off.
“”They’re real sales,”” he added. “”All are drop-shipped to the channel, not filling the (Tech Data) warehouse up with inventory.””
“”It’s exceeding our expectations,”” agreed Tech Data Canada president Rick Reid.
“”Each month the units and the number of resellers and revenue has increased exponentially. It’s very pleasing.””
The deal capped a satisfying year for both companies.
Tech Data Canada had an “”outstanding”” first quarter, said Reid. However, the middle part of the year was slow, as it was for many in the industry. Then business picked up in September, with October being one of the best since January 2002.
That leaves him optimistic about the rest of this year and the beginning of 2004.
In addition to the Seanix deal, the distributors highlights included introducing new voice products from Nortel Networks, new security products from RSA, a trade-in hardware program to help boost corporate sales, a three-year add-on extended warranty plan and the introduction into Canada of Tech Data’s Tech Select program.
Not satisfied with the Seanix deal, it also inked a pact with Compal Electronics of Taiwan letting its resellers order whitebook laptops either configured to order or by chassis for custom work.
These might be considered defensive moves against the possibility Hewlett-Packard Canada starts selling PCs direct here, as it has in the U.S.
It’s a concern that wasn’t eased when HP decided late in the year it will start making desktops in Canada.
Reid has asked of its intentions and “”to date there has not been a clear answer (from HP Canada) other than they like to promote customer choice,”” said Reid. “”That’s a very vague response.””
At Seanix, “”we’re having a record year,”” reported Girard, with shipments up 25 per cent over 2002.
In the quarter ending Oct. 31 alone, the company shipped 39,000 units. An improving economy, increased demand for PCs and a decrease in clone competition get the credit.
Next year will see more of the same, he said, with a greater emphasis on notebooks. In the most recent quarter Seanix shipped only 4,000 laptops, which Girard wants to boost.
But he also noted that this is a highly competitive market. “”We’ve got to work harder, do a better job.””
To that end, the company’s current lineup of three laptops will be expanded to eight.
But it’s the Tech Data Canada deal that he hopes will really put muscle into Seanix. With it, the Western-based company can take advantage of Tech Data Canada’s 5,000 customers, Girard said, many of whom it didn’t have access to before.
For its part, Tech Data Canada will add a full-time specialist to keep its sales force updated on product status, said Reid. Initially the distributor focused the Seanix program on a group of mid-sized resellers it thought would be interested in it the most. “”In the not too distant future”” it will approach larger resellers, he said.
At the time of the deal, Reid explained Tech Data Canada resellers were frustrated at losing business to companies like Dell on large and medium-sized corporate requests for proposals. While acknowledging the Seanix partnership wouldn’t take a large bite out of that problem, the hope is it will give resellers a product line they can compete with.
Reid also believes the Seanix deal could not only be good for the companies, but even revolutionary.
“”In time there will be a number of white box builders who might look at this as an alternative to building their own.””