Security software and hardware company, Sophos, has terminated its distie deal with Hills (ASX:HIL) in Australia. The company has replaced that partnership with a distribution agreement with Exclusive Networks, which both companies inked recently.
Sophos A/NZ general manager, Ashley Wearne, told ARN the company made a calculated move in replacing Hills with Exclusive Networks as it considered costs as well as the competitive landscape within the market.
“We were working with Hills, but Exclusive Networks has replaced Hills in our line-up.
“We have good relationships with all distributors in the market. And considering changes in the market, it made sense for both Sophos and Exclusive Networks to go into a partnership. We looked into who resellers wanted to transact with and made the decision as to how to cover the market,” he said.
Wearne said with Sophos acquiring of Cyberoam last year, it faced changes to its partner landscape. Cyberoam’s existing partnership with Bluechip Infotech extended to Sophos, while Sophos’ distie deal with Distribution Central remains unaltered.
“We looked at the whole landscape post the Cyberoam acquisition and BlueChip Infotech was in a position where it competed with Hills in the segment targeting smaller partners in the market. We felt it was only right to have one distributor focused on that market segment.
“At the end of the day, the most important thing is, what do our resellers need? We look at what they need from a distributor to help them service their clients better and support their business. The feedback we got from our larger partners was that they wanted choice and we thought having an extra distie was a sensible thing to have,” he added.
Wearne added that the company will not be adding on more disties to the mix as many of the resellers that were dealing with Hills also dealt with Bluechip Infotech.
“This is the right number for us. It allows us to cover the market and reach every state in Australia. We have Bluechip Infotech that reaches hundreds of smaller resellers and has good relationships with them and Exclusive Networks and Distribution Central work with the larger partners in the market.
“We’ll benefit if our partners benefit. We want our distribution play to give better services to our resellers,” he added.
In August 2015, the company faced a net profit loss of $86 million after an internal review revealed asset write-downs valued at $94 million. It also reported an underlying net profit of $11 million at that time.
In addition, its company stocks dropped from a $1.25 in February 2015 to about $0.27 per share at the time of publication.