BASED: St Leonards, NSW
BRANCH OFFICES: VIC, QLD, WA, New ZealandPEOPLE: 53REVENUE: $80 million BRANDS: Cisco, Xylan, 3com, Network Associates, Checkpoint, Packeteer, IMC, LanCast, AxisIf you're looking for where the future of distribution is heading outside of the big time-and-place, broad-based distributors, then LAN Systems is probably a good place to start.
The distributor has experienced huge growth that saw it rank in the top 10 fastest growing companies in Australia, according to Business Review Weekly, by sticking to a niche and focusing on services.
"We are 100 per cent focused on communications," said LAN Systems' chief marketing officer, Nick Verykios. LAN Systems' definition of communications these days embraces much more than the network plumbing it focused on in years gone by with brands like Cisco, 3Com and Xylan and it now includes network management and security software like Checkpoint and Network Associates as well as network devices like the Axis IP-video camera.
While a focus on communications is not unique, what does differentiate LAN Systems is the services portfolio it offers resellers.
LAN Systems shies at the term value-added services because that implies that it bundles its services with products. Rather, it describes itself as a channel services company that sells its services capability to resellers who can onsell those to the customer.
So while it provides presales consulting, staging, a service centre hotline and tender response services for free, it charges for services like network design, security policy design, maintenance work, on-site installation and the like.
"If it's a service that we think that a reseller should be charging for then we charge," Verykios said.
It also offers resellers business services like marketing and finance services as well as training.
Not surprisingly, Verykios claimed that technical support and product knowledge of sales reps are a strength of the very technical and narrowly focused company.
"We're really aiming to get the monkey off the reseller's back so they can focus on their core competency," Verykios said.
LAN Systems' traditional customer is the network integrator or reseller who tends to buy a lot of product and makes use of its low-level services capabilities like configuration and staging. However, it doesn't buy a lot of services because it generally has that expertise in house.
On the other hand, smaller resellers targeting the SME market who typically have a vertical market orientation do not have those technical skills and are therefore typically a big customer of LAN Systems' services. LAN Systems also has a unit that focuses on TICs (telcos, ISPs and carriers) in which it sells equipment into the customer so that they can provide services like Internet access, remote access and virtual private networks to their customers.
LAN Systems has only just launched its new Web site, giving resellers online ordering capabilities (ARN, September 15, page 4).
"Our web strategy will continue to go down the line of reducing the cost of transaction for resellers, and that may not necessarily be a product transaction. It may be an information or knowledge transaction," Verykios said.
As well as being involved in loyalty programs like Cisco's Gold and Premiere programs, LAN Systems also has introduced a number of its own reward programs like the LanMANIA promotion and SMB Leaders.
"Most of our loyalty programs are not just about free kickbacks. They're about educating the reseller and enabling them to receive greater accreditation and certification. The reseller who just wants the money is probably not the type of reseller we want to do businesss with because they're not going to be around for the long haul," Verykios said.
(02) 9901 3655