The management team behind DP Data Systems has moved to clarify the circumstances surrounding the independent distributor's closure earlier this year.
In April, a message appeared on the DP Data website saying the firm had withdrawn from independent distribution as part of a strategic review. At its peak, DP Data was one of the independent market's leading players, with revenues of £53m as recently as 2014.
Speaking to CRN, managing director Steve Mckeever and financial director Keith Richardson said that the closure was something that had been decided months in advance and had not been forced upon them.
They explained that all creditors have been paid and employees had been offered alternative employment or a redundancy package.
"The exit from this business has been very controlled and ethical," McKeever said. "We wanted to make sure we respectfully treated our partners, whether they're customers, employees or vendors."
The pair now have set their sights on service-driven distribution via established Huawei distributor Utopia, of which they are both directors, and an education-focused firm launched this year.
The new distributor, Crystalised Limited, will not carry out any independent business and is currently in advanced negotiations to partner with a leading global education manufacturer.
The UK independent distribution sector has come under scrutiny in recent years after a series of legal battles.
In 2012 Oracle won a landmark court case against M-Tech Data which essentially made it illegal for independent distributors to source hardware from outside the European Economic Area (EEA).
Mckeever added that the threat of legal action is one of a number of factors putting strain on the independent distribution sector.
"It was becoming very commoditised and there was very little value you could add to your customer other than trying to buy products cheaply and sell them at a low price," Mckeever said. "To me it was not a long-term sustainable business".
Richardson added that the hardware industry has been shaken up by players like Huawei who are competing with the likes of HP and Cisco.
He cited cloud as a reason why demand for hardware has and will continue to fall over the next few years, which is why it is becoming increasingly important to build long-standing relationships with partners - which Mckeever says is difficult to do if you are independent.
"It makes you less sticky with your customer," he said. "If you're selling products without knowing what they are being used for you're missing out on opportunities to add value to your customer to increase your sales and margin, and also to make sure the customer is providing the best solution for the end user.
"We're not about stacking it high and selling it cheap."
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