Cisco gets its channel sorted out

Number of channel partners slashed

Cisco is to restructure its European distribution channel.

The company claimed the move, which means that only seven large distributors will be able to purchase kit from the vendor, compared with 17 previously, will improve the supply chain to its resellers.

The larger distributors will become Cisco Distribution Partners (CDPs), while smaller players will take on the status of Cisco Accredited Distributors (CADs) and will have to purchase from the CDPs.

The move will be implemented next March.

The CDPs will be made up of seven European distributors, including Computer 2000, Comstor, Azlan and Ingram Micro in the UK. These partners can benefit from their more favourable economies of scale and logistics skills to buy and manage large shipments, the company said.

Paris Arey, vice-president of channels at Cisco, said the reduction in the number of distributors stocking equipment means Cisco will be able to manage availability more effectively.

"Before this announcement we were dealing with 17 distributors across Europe, but now it will be consolidated to seven. This will make it easier to have the right inventory mix," he said.

Keith Humphreysm analyst at EuroLANm said this move will give more control to the large distributors that can manage inventory effectively. "By giving these logistics experts a key role, it will naturally increase stock and speed to market," he said.

Dave Wibling, business development manager at Cisco reseller Satelcom, said: "Our main concern is speed to the marketplace, and anything that is done to improve the availability of products is good."

The CADs are yet to be announced, but will be made up of smaller distributors that will benefit as a result of CDP supply experts becoming their stock holders and suppliers.

Arey said: "We did not want these partners to have their working capital tied up with buying and managing inventory, and we tried to remove that burden so that they can focus on value-add.

"It is business as usual as far as we are concerned, and we will continue to have a relationship with both groups and support them and their resellers."

Cisco said resellers can buy from either group and price parity will be ensured by a rebate system.