Tech Pacific and Texas Instruments have severed ties. TechPac will no longer distribute TI products: the manufacturer will turn to its network of regional distributors, with special reliance on Q*Soft's burgeoning national presence.
While both TechPac and TI officials are quick to emphasise the parting of ways is an amicable one, the separation puts an interesting spin on the issue of "value-add" and what it means to distributors and vendors alike.
"Their model and our model just didn't work. We just couldn't seem to see eye to eye," said David Finn, director of marketing and sales for Texas Instruments. So what kind of model is he after? "The model we need is one that's focused on adding value. We're of the opinion we're going to find more success with specialised regional distributors, most of whom tend to be owner-operated. TechPac is a great facilitation house. If a product is on their books, they'll move it," Finn said. "But notebooks require a lot of value-add, they're not like boxes or printers."
Although TI was clearly unhappy with its distribution setup, a well-informed source who requested anonymity says it was TechPac that dropped TI, not the other way around. "It was a combination that never really worked. Texas Instruments has never really grasped the vendor-distribution relationship - especially as it relates to national distribution. They're an excellent company but they tend to be strictly a manufacturer, rather than a marketer/manufacturer. TechPac does well with Digital and Hewlett-Packard, but Texas Instruments was always a bit of a struggle."
Is this a trend?
Regardless of the origins of the split, the move is interpreted by some industry watchers as part of a trend of high-end manufacturers moving away from large distributors, in favour of smaller, more specialised ones. When Compaq and Novell split from TechPac in April, sources inside both companies were quoted as saying they required more specialised, "value-adding" distributors. However, a TechPac source disagrees with the notion of a developing trend. "These things are all part of the natural cycles within the channel. If you look at who we distribute at any given point, you're going to see a cross-section of manufacturers. Some move on for reasons of their own or because we suggest they do. Simultaneously, new vendors come on."
Looking to the future, Finn says he's confident TI's network of regional distributors - Elite in NSW; Johnson Technology in WA and NSW; IT&PC (formerly Datamini) in Qld and NSW; and Terra, Alloy and Ztech in Vic - will fill the gap left by TechPac's departure. "These people provide a lot of focus for our product line and Q*Soft is going to help us on a national basis," he said.
Brisbane-based Q*Soft has recently made news with its expanded operations in Sydney, Melbourne and Perth. Although nothing is confirmed, Finn says Sydney-based PDS is being mooted as an additional TI distributor.