Technology is recession-proof. The business of technology might be affected by the economy, of course, but the technology itself marches on. This year was no different.
It was the year Software as a Service (SaaS) and the cloud became mainstream. Netbooks, virtual desktops, thin clients on one end, datacentre consolidation and virtualisation on the other and gigabyte Ethernet and fibre in the middle. More vendors – such as Microsoft with its Services Provider Licence Agreement and VMware’s VMware Service Provider Programme – are licensing their software specifically for service providers. As the pieces fall into place this year, there are signs growth will emerge next year.
2009 kicked off in a challenging economy. In January alone, US-based Nortel Networks filed for bankruptcy, Lenovo announced plans to make 2400 workers redundant (10 percent of its workforce) and Logitech said it would cut 15 percent of its salaried staff worldwide. In the quarter ended December 2008, local PC sales declined 7 percent against the previous quarter.
But, in the end, the local IT community weathered the storm. Dove Technology celebrated its 25th year in business by moving its Auckland office to a larger facility in Penrose with nearly twice the warehouse space at 1460 square metres. Ingram Micro opened a larger warehouse in Christchurch and in South Auckland it moved to a new, larger warehouse – large enough for $40 million to $50 million in stock - that is closer to the airport. Datastor reported revenues of more than $70 million last year and a 14 percent growth rate. Storage giant EMC boosted staff numbers and is now looking for larger premises.
As well, the IBM Business Partner Awards demonstrated once again that there are some very clever people out there who really understand how to deliver cost-effective and innovative solutions.
Distributors in the headlines
As usual, distributors and vendors played mix and match. Ingram Micro made headlines when it acquired mobile capture and point of sale specialist Vantex and high-end distributor Value Added Distributors. With these moves, Ingram Micro gained traction in the mobile, retail and datacentre markets, which are booming. Meanwhile, Datastor acquired the IT distribution arm of Cellnet, with considerable expertise in the server space. The addition of Cellnet’s IBM X-Series business rounded out Datastor’s offerings in IBM software and storage, to give it end-to-end IBM solutions. Datastor also picked up the Fusion-io agency for even more disk drive models – the ioDrive is said to be much faster than SSD.
Cellnet New Zealand, having sold its IT distribution business, is now under the able leadership of Dave Clark, who was marketing manager before his promotion. The company continues to provide telecommunications accessories, retail products and flash memory as distributor for such agencies as Navman, Belkin, Canon and Lexar. It too has shifted to new premises, near its previous site on Auckland’s North Shore.
Soft Solutions also picked up a couple of new agencies. In January it became the second local distributor for digital archiving company Atempo, while in February it signed on as a distributor for Perth-based company Webspy for internet monitoring, analysis and reporting software. In May, the firm moved up from being a reseller of Sunbelt’s antivirus, antispyware and associated security solutions to a full-blown distributor. And in November it launched a business continuity appliance; a custom-built backup and archiving appliance containing some of the vendor’s technology, to provide off the shelf business continuity capabilities for small and medium-sized businesses.
Renaissance is also moving on. It is looking for a new managing director to replace Paul Johnston, who announced his resignation in October. While revenues were lower than expected, the company was still in the black with a projected profit of $700,000. To help it weather the storm, Renaissance brought on a raft of new agencies. In April, it secured exclusive distributorship of the Eye Series range of wireless surveillance cameras that are made in Australia, but marketed and supported here by mi5. In May, Renaissance was appointed the exclusive distributor for Hong Kong-based Aspen Optics fibre connectivity products and Geebic-branded optical transceivers.
Renaissance subsidiary Insite Technology inked a deal with desktop virtualisation company NComputing to distribute its low-cost X and L-series virtual desktops. The desktops virtualise a single PC so that up to 11 people can share it. NComputing is also fronted by Ingram Micro. As a result of an international deal that saw Foundry Networks being acquired by networking giant Brocade, which Renaissance Brands currently distributes here, the company will be offering Brocade’s IP LAN solutions as part of the Brocade Alliance Partner Network programme.
Synnex was also on the hunt for more agencies. In July, Gigabyte Technology appointed Synnex as its second local distributor of motherboards and VGA cards, alongside Dove Electronics. In August, Acer announced that Synnex would distribute Gateway in New Zealand, an extension of an agreement across the Tasman. And late this year Synnex picked up the Targus agency for laptop bags and accessories, after adding the Eaton range of uninterruptible power supply devices.
The distributor’s strategy is paying off. Synnex says it has achieved double digit growth on both sides of the Tasman in the first three quarters of 2009, compared to the same period last year. Synnex Technology International – which covers Taiwan, Hong Kong, China, Australia and New Zealand – announced consolidated financial results for the three months to 30 September of $2.78 billion in revenue and before tax income of $79.6 million. Not bad at all.
As well, some new players came into the market. Retail-specialist distributor Sektor started in May with a range of HP and other POS solutions and is planning to expand. Australian SaaS specialist distributor Newlease, which opened an Auckland office in April, aims to recruit 200 New Zealand resellers in the next two years. And Distribution Central – also headquartered in Australia and in its second year of operation in New Zealand – grabbed headlines with its agreement to take responsibility for the distribution of Avaya’s unified communications and contact centre technologies in New Zealand. It also secured an exclusive distributorship with Clearswift and appointed local IT veteran Richard Crabb as country manager.
Vendors redouble efforts to support resellers
While the distributors facilitate the distribution of products, the vendors play a huge role in promotions. And the vehicle for most vendors is their various and sundry partner programmes. This year was no different in that almost all the majors revamped, rejigged and generally raised the profile of their partnership initiatives.
Microsoft has a long-term strategy to work closely with local partners in the next 12 to 18 months, as it moves to new competency areas introduced as part of its revised Partner Network programme. Membership levels have changed to Community, Subscription, Competency and Advanced Competency, with specialisations in such areas as Digital Home Solutions and Digital Marketing Solutions.
D-Link unveiled a new channel partner programme in July, in which the vendor will be providing a refreshed partner portal and a single world-wide approach to marketing materials. D-Link will also monitor distributor/reseller relationships and group all existing partners into one of four tiers, of which the Business Partner tier is the most accessible for resellers. The Elite, Silver and Gold tiers are restricted and partners must be invited by D-Link to take part.
HP recently launched a local three-tiered Print Specialisation programme to encourage partners to move toward contractual solution selling and services. The top level – HP Office Printing Specialist – enables partners to provide end-to-end management of customers’ print requirements from hardware and parts to break-fix support, workflow and consumables management and direct billing.
With all the new technology and support initiatives hitting the streets, it takes time and effort to stay abreast of the latest developments. That’s why exhibitions, roadshows, seminars and well-equipped showrooms continue to be so popular. Ingram Micro’s ‘Strategies for Success’ Showcase might have featured smaller vendor stands than in years past, but there were more than 50 vendors and a range of well-attended seminars in Auckland, Wellington and Christchurch. While people like looking at the flashy consumer models, it is the opportunity to talk with the technical people and solution specialists for the high-end enterprise products that represents the real value for attendees.
Datastor’s Forum also continues to attract significant numbers, with more than 700 registrations this year. Key vendors included VMware, IBM, CA and APC. All of these vendors are active in the datacentre space and this focus on the high end has no doubt fuelled Datastor’s impressive growth over the past few years.
Distributors are making more of an effort to display vendors’ wares at their facilities. Dove has a new Technology Centre in its Penrose, Auckland premises, where it sponsors ‘Lunch ‘n Learn’ sessions for the channel to focus on new technology. Similarly, Comworth will be setting up a fully-equipped showroom to show off its print and related solutions in an office environment. As well, Datastor has set up a complete ‘virtual datacentre’ training facility that demonstrates how its technology can be utilised to achieve cost-savings and efficiencies from new ways of processing and storing data.
Closer to home, there were a few changes at Reseller News as well. Amanda Sachtleben moved up to the editorship in May as Chris Bell left the helm to return to freelancing. Additionally, Leonie Smits came over from NZ Bride and Groom Magazine to front the sales effort. Shortly thereafter, the number of ad pages in Reseller News started to slowly creep up, culminating in the 28-page Distributor Profile special supplement accompanying this issue. Better economy or better account management? A healthy mixture of both!
This year the buzz was ‘cautious optimism’ at the beginning of the year. There was no panic – after all, every business needs IT and five percent unemployment is the same as 95 percent employed – but there was little excitement. However, business was brisk in most sectors and there were no major disasters or bankruptcies. It was, in the end, pretty much business as usual.
Next year the economic situation is expected to improve for ICT. The dollar remains high, making imported gear cheaper, while the technology – especially in the datacentre, client and network space – is maturing and there is a pent-up need for expansion. The lean days of 2009 should be over and next year will see a healthier economy for resellers to do business in.