IBM is to transfer all its networking product business into two-tier distribution by 1998.
IBM network technology sales manager Dirk Billiaus said it was a ?question of putting a box on a shelf before Cisco does. We want to make $240 million on networking products via a two-tier channel. We are convinced we can achieve this growth.?
Ed Arnett, regional MD for Northern Europe at Azlan, said dealers stood to gain at least as much margin on the products as Azlan did (24.5 per cent gross), but he admitted not all would gladly leap in.
Speaking at a conference held last week in Nice to publicise Azlan?s signing as IBM?s third network computer distributor, Arnett said: ?There will be some predictable reactions of why me? What have I done to hurt you? Some egos will be hurt, but as long as the reseller can deliver clear added value through technical competence he?s in an invidious position. If not, he?s up against the wall and he deserves to be, because business is tough.?
The two companies have developed a joint sales strategy for networking products which involves tailoring marketing plans for each reseller. ?Resellers don?t want to be lumped together with a whole load of other resellers. As a partnership we can do customised marketing programmes,? said IBM marketing manager Kevin Bishop. He warned that dealers who are purely box-shifters will get ousted from business.
IBM had four per cent of the networking market but plans to grow this to 10 per cent in 1998 by working in close partnership with Azlan to target small and medium enterprises. In the early 90s, IBM had made easy money by selling directly to its captive market, but with the emergence of Bay Networks, Cisco and 3Com it realised it had ?missed the boat?, said Bishop.
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