Two weeks ago Tech Pacific gathered around 100 of its resellers in Melbourne to hear words of wisdom from its four PC suppliers. For Tech Pacific, it was an opportunity to impress upon its customers its dedication to the PC marketplace. ARN's Brad Howarth attended the PC Power conference, to hear what they had to say.
Tech Pacific. When Tech Pacific first began distributing PCs back in 1995, they accounted for only 2 per cent of its business. By 1996 that figure had risen to 9 per cent, and is forecast to rise again to 13 per cent for 1997.
According to managing director David Cullen, Tech Pacific is serious about growing the PC market. The company's strategy is to continue promoting premium-branded PCs, rather than clones. "Premium-branded PCs continue to take market share in Australia," Cullen said. "By our estimation, around 45 per cent of all PCs are first tier OEMs, and that percentage will grow."
As for how Tech Pacific is fairing generally, Cullen expects its Australian and New Zealand operations will account for $780 million of the company's Asia-Pacific total revenue of $1.7 billion. Cullen believes Tech Pacific is now past the pain of its 1996 acquisition of Merisel. He acknowledges there were three or four months where customer service suffered, but added; "I think we're in great shape to provide continuing improvements to our customer service."
With other initiatives including the installation of a call centre, a PABX and a $12 million investment in upgraded systems, Cullen believes service levels should continue to rise.
"We must continue to improve our business, and we would like to be seen at the end of the day as the preferred IT distributor," he said.
As for the Tech Pacific Web site, marketing manager Anne Mossman said resellers can expect further enhancements to the site as it moves to a new Windows NT server with a new search engine. The site is currently receiving 100,000 hits a week.
Digital. From Digital, the key message to resellers was not the technical differentiators of its product line, but the way the company does business.
"It's our belief that no vendor in the Australian market has really ever succeeded in PC distribution," said Tony Hughes, Digital's reseller manager. "A lot of people have had a go, but we are very focused on it. It represents in excess of 40 per cent of our annual turnover. So distribution is not something we see as a sideline, it's a main part of our business."
Hughes said that unlike other vendors Digital won't be distracted by forays into retailing. "Unlike our competitors, we're firmly focused on the needs of the corporate and the business market."
He was also keen to assure resellers that at no stage will Digital look to go direct. "The last thing the channel needs is a vendor that wants to compete with them. And we're very committed to selling through channels."
Toshiba. Toshiba's marketing manager, Rebeka O'Flarehty, was also keen to reassure resellers that the notebook vendor was not considering flirtation with a direct model. "In a climate where vendors are feeling very feverish about a direct model, and getting quite enamoured with that model, Toshiba is 100 per cent committed to its channel strategy."
O'Flarehty reaffirmed Toshiba's commitment to quality and its desire to be first to market, but acknowledged that the vendor has experienced supply problems. "We're in the fortunate - but unfortunate - position of having a product which is high in demand. From time to time demand does exceed supply."
IBM. According to IBM's general business and consumer manager Rutland Smith, the incentive for resellers to sell IBM systems is that the value proposition they represent to end users enables resellers to make greater margins.
"It's not about price," said Smith. "What it is about is value for money, and the key to selling IBM is knowing what the differences are, and then being able to explain them to your customers. Smith said IBM has shifted its focus from retail - where he claims it grew from nothing to be market leader in under six months - to distribution.
"We've grown over 100 per cent in the last six months, and we're on track to be one of the number one products sold through distribution in this country."He also added that there are no barriers to resellers selling IBM PCs. "There is no reason why you cannot sell IBM product, there is no reason why you cannot be an IBM service provider."
Hewlett-Packard. While marketing development manager Rob Hartnet admits that Hewlett-Packard is somewhat new to the PC game, he believes it is also one of the fastest growing PC companies.
"One of the reasons we are concentrating very heavily on the PC market is because the PC sits in the middle of a lot of what HP is number one in, such as scanning and printing," he said.
Hartnet said Hewlett-Packard has set itself the goal of being the number two PC vendor by the year 2000, having already reached position five today.
Helping it to get there will be Hewlett-Packard's concentration on cost of ownership issues, where it can leverage technologies such as its OpenView management platform.
Tech Pacific's currently readying its next three ExpoTechs. The events will occur in Brisbane, Adelaide and Perth on August 26,September 23 and October 28 respectively. For further information call your Tech Pacific rep, or check out TechLink at www.techpac.com.au.