Reseller News

Cisco Gold partners go direct to source

CISCO’s Gold partners are purchasing more products from the vendor than from its two distributors, which is contrary to channel sentiment 12 months ago.

Cisco New Zealand manager David Barker says 43% of sales are through either Tech Pacific or Express Data, which is up from around 35% a year ago.

“It’s been on the increase. And we’ll run programmes and promotions to continue this [rise],” he says.

One of the privileges that Gold partners Datacraft, Hewlett-Packard, Telecom and IBM (with Logical CSI’s medallion) have is the ability to buy directly.

But channel players told Reseller News in May last year — the time at which Telecom became Cisco’s fourth Gold partner — that top-tier resellers preferred to deal with distributors. And ARN reported in February 2003 that the vendor’s Australian partners in its Direct to Gold programme were returning to distributors after striking problems with product delivery, credit terms and assistance with pre-configuration.

Barker says all four New Zealand Gold Partners buy some product directly from Cisco but Telecom has stuck largely with the channel.

And he says partners who buy directly from the vendor can obscure costs, such as those associated with delivery delays and invoicing.

“It’s a bit of a false economy because they think they are saving dollars but they’re not always.”

Express Data sales manager Paul Plester says the 43% figure is no surprise — but maintains that Telecom buys the bulk of its Cisco kit from the distributor. “Cisco’s going extremely well for us. But we would love all the Golds to buy through us.”

Telecom Advanced Solutions manager Chris Quin told Reseller News last month that his company purchased most of its Cisco product from Express Data.

Despite an increase in distributor business over last year, Plester says the majority of it used to be done via distributors.

“When the Golds were buying through the distributors, it was generating a lot of marketing money to promote Cisco to the [small and medium] business.”

Barker says Cisco is extending its tier-two partner (Premier) programme Simply Cisco to boost channel sales.

Cisco’s New Zealand revenue was $10.5 million for the 12 months to July 26, 2003. The previous year’s figure was $7.9 million.