Netgear backs network device resellers

Netgear backs network device resellers

Netgear, the Bay Networks arm now flexing its muscle in the small office market, has slotted in the newest piece of its Australian channels strategy.

It has appointed Queensland's ITnPC as its fourth regional distributor, joining Tecksel (NSW and Victoria), BMS Technology (SA) and J Mills (WA).

Vice president and general manager Patrick Lo is bullish about the young company's prospects. It already owns a 14 per cent share of the Australian market for unmanaged network devices such as low-end hubs and switches, according to Lo.

It aims to own 35 per cent within three years, a target that translates into tripling sales on an annual basis.

Netgear was launched in 1996 on the premise that the small office/home office (SOHO) and small-to-medium enterprise (SME) sectors were ripe for its brand of cheap, no-nonsense network devices.

Rather than Fortune 500 companies, it targets what Lo calls "the un-Fortunate 50 million" companies with two to 25 PCs in their offices. Its succinct strategy is "follow the PC", according to Lo.

"We ask who is selling PCs to these people in SOHO and SME and then we form alliances with them."

In the US, customers are turning to the retail channel but in Australia they still primarily use the small value-added resellers and PC dealers, Netgear says.

Netgear is stitching up pacts with partners like ITnPC with good links to the low-end of the market.

To hammer home its message of "networking can be friendly, cost-effective and easy", Netgear relies on colourful, easy-to-digest brochures and documentation that leans toward breezy illustrations rather than dense text.

"Our brand principle is our products are low in cost, easy to install and reliable to use," Netgear's Australian sales and marketing manager, Ian McLean, said.

"The same theme permeates all our packaging and literature." Although its hubs and switches scale up to 100 users, Netgear's primary focus is on customers with five to 25 PCs.

On the question of direct sales, Netgear has an interesting philosophy. "We don't believe we have the infrastructure to cover our huge customer base through the direct channel," Lo said. "At the same time, we can't ignore the fact people will buy online using the Web or the phone, but we believe the best way is to partner with resellers who cover those areas."

Forged ties

Netgear has linked its Web pages to multiple electronic commerce sites in the US which sell online to customers.

In Australia, it has forged ties with two elec- tronic catalogue operations, International Software Warehouse in Sydney and Harris Technology in Melbourne.

Lo doesn't see any conflict between its Web direct operations and its wooing of the reseller community.

Netgear's network starter kit, which comes with two 10/100Mbps network cards, a four-port hub and cables is proving a big seller in the US, Lo said.

Selling in Australia for about $250, the kit, with its dual speed cards, allows dealers to hitch themselves to the move toward higher speed networks, Lo said.

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