The news that Tech Data Canada had its best year ever in the Rick Reid era is surprising considering the NexInnovations meltdown.
The Mississauga, Ont.-based distributor took a financial and public hit as a result of the high-profile reseller going out of business.
But, in the end, there wasn’t much of a dent made to its bottom line and you have to credit the executive team at Tech Data Canada for moving swiftly in the aftermath of the NexInnovations demise.
The business that NexInnovations did with Tech Data was somewhere north of $200 million. As the industry started to hear whispers of NexInnovations demise, many of the company’s customers started looking for other solution providers to handle its business.
Tech Data Canada recruited many. Then as the news came out that NexInnovations was officially dead and Softchoice was going to pick up practically all of the remaining pieces for $10 million, Tech Data began aligning itself with Softchoice, a company that deals mostly with Ingram Micro Canada. But Softchoice CEO David MacDonald told CDN that he was not averse to working with Tech Data. Tech Data clearly offered Softchoice a tremendous value proposition convinced the company to move most of its business to Tech Data.Tech Data could have suffered a major business hit, but instead acted quickly to mitigate the fallout.
The distributor was positioned to absorb the financial loss of NexInnovations business, with whom it had an exclusive relationship, because of the great gains they made out in Western Canada and Quebec.
The distributor opened a distribution facility in Richmond, B.C. last year and more recently cut the ribbon on a 2,000 sq. ft. integration centre for Western Canada-based VARs.
Still, financial disaster may have been averted and Tech Data positioned for a good year ended up having a great business year – in fact, its best ever.
— Posted by Paolo Del Nibletto, 19/02/08, 10:17 AM, paolo@itworldcanada.com
Dell’s channel boss has uphill battle
The results of CDN‘s poll question: Would you listen to Dell’s channel pitch? have come in and 60 per cent of the respondents said they would.
This is the good news for Frank Fuser, Dell Canada’s first ever channel chief. The bad news is that he will be viewed by the channel as an insider.
Dell Canada needs channel partners in a big way. It only has 2,000, which make up a little over 10 per cent of its revenue. Dell has publicly made a commitment to the channel. They have developed a channel program for this effort and quite frankly have lost ground to HP and Acer. Both of those firms have locked up many great solution providers in Canada.
This will be an uphill battle for Fuser as the channel already distrusts the vendor. He has this job now, and what he should do is hire an experienced channel executive as a consultant.
There are plenty of qualified channel executives available. Here are four top-flight channel executives Fuser could talk to:
Chris Devlin ran CA’s channel in Canada and in EMEA.
Jim Mandala built Samsung’s printer channel in Canada. He was also Epson Canada and Handspring Canada GM.
I have recently learned that Pat Kewin, formerly of Trend Micro Canada, has been freed up.
And if Dell Canada wants to open up the vault and pry someone away from another company there would be nobody better than Steve Simmons of Unis Lumin. Simmons brought the highly successful partner profitability programs to Cisco Canada.
Dell, in my opinion, could never hire these executives. It’s not in its culture. They are more comfortable with Fuser, who knows and understands the company and can attempt to build consensus from within.
Fuser must also learn to be a more of a channel advocate. This will not be an overnight thing because of the strong direct culture at Dell.
Fuser admitted to me that changes need to be made inside Dell. The company has already revamped its sales compensation structure so that channel sales are treated equally as direct sales. That’s a good start.
But they say perception is reality. And the reality is Fuser will be perceived as a Dell insider.
To his credit, he told me he plans on building a partner network for Dell one solution provider at a time. Fuser has the autonomy to make changes and will consider back-end rebates in the near future, he said.
Fuser will come to learn that for any channel plan to really work it will need tweaks and it will need channel buy in. But instead of working with channel partners, Fuser will be trying to prove to them that he is really on their side. And that will be a hard sell.
I wish Fuser luck. It may not seem like it, but I really do. There is nothing more I would like to see than the channel succeed with Dell. It would prove to the long time direct vendor that the channel model in Canada works better.
— Posted by Paolo Del Nibletto, 12/02/08, 10:17 AM, paolo@itworldcanada.com
Mitel should rethink exclusive approach to its UC channel program
Mitel’s new Exclusive Business Partner channel program for its unified communication (UC) products asks solution providers to be totally exclusive to the company.
This tactic is unnecessary and impractical in today’s channel, and Ottawa-based Mitel should remove it from its plan before an official Canadian launch on May 1. The EBP program was recently introduced at an Orlando, Fla., partner and customer conference and is currently only available in the U.S.
Carter Chapman, director of channel sales at Mitel, told CDN that partners must agree to only sell Mitel UC products to all new customers to be eligible for the EBP program.
This flies in the face of those solution providers today that seek to be customer focused. Gone are the days when a channel partner was a self-described IBM VAR, Compaq VAR or Apple dealer. Solution providers simply cannot force feed customers any particular set of products.
Solution providers today are more apt to deploy multi-vendor solutions, which more specifically fulfill customer needs. Partners realize not every single product from a specific vendor fits or performs well within every IT environment.
Vendors also recognize this reality and offer incentives for partners designed to encourage them to sell more of their specific products. Mitel should simply do the same.Use the carrot, rather than the stick. Mitel could win greater channel support by offering better margins or bonuses for displacing a rival’s product at any customer site.
That’s how Cisco does it, as does IBM and Hewlett-Packard. Smart vendors recognize they can’t be everything to everyone, and they don’t hold the feet of VARs to the fire in this way.
Everyone is looking for partners that specialize in UC. UC is a rapidly growing and profitable business and, according to the Radicati Group, approximately $20 billion in UC product and services sales will be driven through by the channel worldwide by 2010.
Even UC market leaders Cisco and Microsoft concede they need to work together in many instances in order to solve the UC challenges of their respective customers.
Creating partnerships that demand exclusivity is not the right approach, especially when UC skills are less than plentiful. I plan to relate this message to Mitel CEO Don Smith when I meet with him on Feb. 13. Stay tuned for his response.
What do you think about Mitel’s approach and its chances for UC success