NEC strikes gold with the silver screen
After providing the IT infrastructure for the Cannes Film Festival, NEC Computers has set its sights on the European market. Sara Yirrell speaks to NEC chief executive Jean-Claude Tagger about what part the UK channel will play in its future plans
Red carpets, multi-millionaire movie stars and spangly frocks are not things normally associated with the IT industry, but for NEC Computers the glitz and glamour of the Cannes Film Festival is just another day at the office.
The manufacturer, a division of NEC Corporation, was the official IT partner of the Cannes extravaganza for the 12th year running. Responsible for the entire IT structure at the event, NEC was tasked with ensuring that the 3,000 journalists who attended from around the world could get the latest picture of Tom Hanks or Halle Berry to their newsdesks in time for publication.
It is easy to get lost in breathtaking figures to describe the sheer massive scale of the Cannes event: more than 300,000 spectators, 3,000 journalists, 500 photographers, 2,000 films screened over the two weeks, ¤115m generated through tourism, the second most popular global event after the Olympic games… the list is endless.
However, speaking to CRN from a sun-soaked beach restaurant in the heart of the French equivalent of Hollywood, NEC chief executive Jean-Claude Tagger, said the company, which has massive market share in its native Japan, is also aiming to increase its presence in Europe and, in particular, the UK.
“Without the channel we cannot survive. It is as simple as that,” he said. “About 75 per cent of our business is in Japan, with 25 per cent in the rest of the world. Our channel is very strong in France because we started to develop it about four years ago. Now we are looking to focus more on the UK market, which we see as the second-largest market after Japan. Our strategy is 100 per cent channel.”
Tagger added that the vendor, which manufactures PCs, notebooks, servers and storage products, sees the likes of Hewlett-Packard (HP), Acer and Dell as its main competition, and is working hard to build market share.
“We are very good at customising products. If you look at the numbers we don’t have the market share of the likes of HP, Acer and Dell, but we do more,” he claimed. “We are a more flexible company. We are still classed as an A-brand, but we provide the technical support and flexibility of a local assembler. That is what we believe the channel needs.”
NEC has partnered with one UK distributor so far, Interface, but is looking to recruit another in the near future, he added. The vendor also has several direct relationships with larger resellers such as SCC, PC World Business, Insight, Misco and Computacenter.
“Our aim is to keep our [channel] strategy straightforward and simple,” Tagger said. “Before I became chief executive, NEC had started to develop a direct business in the SME space, but I put a stop to that. Although the [direct] strategy wasn’t actually competing with our resellers, it was not clear enough for some partners, and they misunderstood its intention.
“However, we are now in investment mode for both products and our channel.”
The man tasked with building the UK market and channel is Mike Tonkin, UK sales director. He is confident that the company can provide a real alternative to the competition.
“When we started in the UK, it was with a direct model,” he said. “That was good in terms of margin [for NEC], but poor from a growth standpoint. We have now moved away from the direct model and more towards the channel.”
Tonkin added that the vendor is keen to build on its SME and public-sector business, where it has seen success in the education market.
“However, our main message is that the channel is key to our survival,” he said. “We will be 100 per cent dedicated to our partners.”
Steve Brazier, chief executive of analyst firm Canalys, said the vendor needs to show a real commitment to the channel to make its indirect strategy work.
“NEC and Packard Bell were together for a long time,” he said. “But, about a year ago they split into two separate businesses, with different chief executives and differing business plans.”
“This brought more focus to the NEC PC business. From what I understand, NEC has a tight team with tight control over profit and loss. Their chief executive formerly worked at Dell, so he knows what he is doing.”
Brazier added that at the moment the business is very centric around France. It is particularly strong in larger deals and the public sector. However, in the past, NEC’s commitment to the channel has been patchy. It has not been that committed to distribution, which is unique for such a large vendor.
“In terms of distribution coverage, NEC is pretty weak,” he said. “So if it wanted to show it was serious about its SME business, it would need to sign up bigger distribution players to get that market share. I’m sure certain resellers will find working with NEC to be beneficial, but that will be in the tens, rather than the hundreds.”
However, Brazier added that NEC has been around for a long time and the signs are it will continue to be around for a long time to come.
Contacts:
NEC (0870) 010 6328
Canalys (0118) 984 0520