In an attempt to further promote its networking offerings into the marketplace, IBM has appointed Sealcorp Computer Products and ITG Computers as distributors of its networking hardware range.
While IBM will continue to deal directly into larger accounts, IBM's national channels manager for networking systems Jo Pollard says the distributors will be essential in broadening IBM's market reach. "In looking at the marketplace and IBM's coverage of it, we saw we really needed to expand IBM's relationship with the broader base of business partners or resellers that we don't touch. Traditionally IBM has worked with high-end accounts, so the idea is that we have some very good low-end pro- ducts and we needed to get them to market effectively. And the best way to do that is through distributors."
Both companies already have long-standing arrangements with IBM in other areas, a factor Pollard says was important in their selection. "ITG has an existing relationship with the IBM PC Company. Sealcorp fits into the value-add model, and they have an existing relationship with the IBM Software Company. Both companies were very interested in expanding their relationship with IBM, as well as their access to product and their promotion of IBM products end-to-end to the resellers marketplace.
"They understand how IBM works, and work very well with IBM already. And because they carry some IBM products, it was a logical expansion of their product set."
While IBM's networking hardware currently holds a low market penetration in comparison with many of its competitors, Pollard says the product set is solid enough to go to market from a position of strength. "What we've been focused on doing is getting the product set established, and our relationships with a number of companies established. So we will go to market with a very strong story."
Initially the two distributors will focus on IBM's volume products, but Pollard says they have the opportunity to take on higher-end products when their skillsets increase.
Pollard says the distributors will focus on moving products through three channels. "The first one is through the distribution model, in other words establishing that model and building it, to get access to new markets and new partners. The second is through very focused network integrators, who work with more traditional IBM type accounts. And the third will be new partners who we will bring on board, and bringing them on board with the IBM story and the IBM product set."
Richard McLean, general manager of long- time IBM distributor Sealcorp, says the new partnership rounds out his company's offerings. "It makes us able to compete out in the marketplace with some of the more established players like Com Tech.
"We're coming from a very strong background in communications and connectivity from our existing relationships with companies like Digi and some of the newer ones like SMC. IBM really does have some nice solutions at the higher end, particularly their dial-in access and communications equipment, so it [distribution] just made a lot of sense."
McLean says Sealcorp will be able to take IBM products to a new audience. "We bring the advantage of having a broad range of relationships with a number of resellers that wouldn't automatically turn to IBM for that kind of solution. To the resellers, we immediately bring a wider range of solutions, and we're finding that especially in the lower tiers of the reseller market they're looking more for opportunities to differentiate themselves and not just offer the standard router and NIC cards. And we are a company that puts a lot of resources into understanding and supporting the product that we sell. That's one of our key differentiators."
For ITG, national sales manager Braham Shnider says the IBM arrangement is the realisation of an ambition to move into the networking arena. "We've had the opportunity to take on other networking products, but we felt the opportunity was greatest with IBM, because they are very strong in the marketplace, but they are not well known in the marketplace as a networking vendor. They've got a fantastic product line, the biggest problem is that no-one knows about it."
Shnider says it is important that ITG doesn't fall into the trap of over distributing. "Our intent really is to try and maintain as tight a focus on specific best of breed products as possible. And what it does is improve our ability to provide service. What we do not want to do is to be a broad-based distributor."
ITG already has a strong focus on IBM products, holding distribution rights to IBM software, PC hardware and the printer range. "It rounds off what our product offerings are. Our primary focus is the complete set of IBM products that sit on a desktop or connect to the desktop, but we didn't have a lot of products that connect to the desktop."