Cloud Distribution's managing director Scott Dobson has opened up to CRN about the end of the firm's six-year partnership with Cisco Meraki.
Cloud became Meraki's first distribution partner outside North America in 2010, but was met with competition from distribution heavyweights when Cisco acquired the firm in 2012. Azlan, Ingram and Comstor were added to the distribution roster over the following two years.
Cloud was given written notice by Cisco at the end of last year, with the partnership ending in April. In response, Cloud signed new vendor Ignitenet in January, which effectively means it is now competing against Cisco Meraki.
Despite this, Dobson told CRN that there is no bad blood with Cisco and that the split was amicable.
"It was time for us to part company. We had been, for about two years, the only non-Cisco distributor of Meraki globally, so they kept us on longer than anyone else," he said.
"We certainly found once the Cisco channel and Cisco distribution got involved two years ago that the margins started to reduce and there was far more competition.
"We couldn't really compete in certain deals with the Cisco channel because the likes of Ingram are prepared to sell the product at cost and get rebates on the back end."
Dobson explained that because Cloud already sells Aerohive, which he says is comparable to Meraki, he did not feel the need find a direct replacement.
Instead the distributor signed up Ignitenet, owned by Taiwan-based Accton. Dobson says Ignitenet provides a cheaper alternative to Meraki, which means partners can make better margins and also take on business that previously did not materialise because of Meraki's pricing.
"We wanted to look around for a more cost-effective solution, because the education, retail and hospitality sectors don't need all the bells and whistles that an enterprise wireless LAN solution offers, but they like the cloud management and the ease of deployment," he said.
"It's basically 80 per cent of what Meraki can deliver at 40 per cent of the cost. We're certainly not switching from Aerohive or our Meraki resellers, with which we still have relationships, but they're finding opportunities that maybe they walked away from in the past."
Despite the Meraki deal nearing its end, Cloud still saw its revenue increase 43 per cent year on year in 2015, which it credits to taking on vendors like Ignitenet.
Adam Davison (pictured), sales and marketing director at Cloud, said: "Cloud has experienced a tremendous year of growth by enhancing our portfolio with new disruptive technology that perfectly complements our existing suite of vendors and providing partners with a range of value add support services that helps grow their business.
"We've now made structural changes within the business to take into account the continued growth of new and existing vendors and we have seen revenues grow year over year even with the removal of Meraki from our portfolio, so we can invest even more time and resource in our partners and grow together."
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