IT distributor, Synnex Australia, is to distribute Western Digital hard drives. The deal comes as an extension of a global agreement between the companies.
The distribution agreement began in April and covers Australia, Taiwan, Hong Kong, China and Thailand. In Australia, Synnex joins existing Western Digital (WD) distributors, Westan and Achieva.
Managing director of Synnex Australia, Frank Sheu, said the deal did not involve a tendering process because it was an extension of the WD’s Global agreement with Synnex.
Synnex US has dealt with WD for 10 years.
The growing consolidation of the IT industry was a major factor in WD’s decision to extend its partnership with Synnex in the Asia-Pacific region, Sheu said.
“The market is getting tougher and tougher as it gets squeezed,” he said. “Manufacturers want to work with a regional player that can give them the most presence and the level of service they expect."
WD’s director of sales for South Asia, Tow Cheng Lim, said the addition of Synnex expanded WD’s reach in the enterprise systems integrator market, as well as the government segment.
Synnex's strength in the whitebox arena had been a drawcard, Sheu said.
“There are other distributors for WD in Australia, but in our capacity as a significant reseller of IT components and systems, WD realised we can increase its market share," he said. "So it’s a mutually beneficial relationship.
“We already have a large number of resellers working in the education and government sectors,” Sheu said, “and we have the types of products to support these resellers with government and education contacts.
“Strategically we now have good coverage for the storage solution combined with the reach of the two brands, Seagate and Western Digital, which probably have 80-85 per cent market share,” Sheu said.
For his part Sheu feels confident about joining an already crowded and competitive market place.
Despite the highly competitive nature of the hard drive market, Sheu said he was confident there was enough room for another player to join existing WD distributors, Westan and Achieva.
“The storage market is bigger than the PC market, a lot of people upgrade hard drives and the upgrade market is growing,” he said.
But Sheu did concede that competition was tough.
“Because the margins are so tight it’s all based on your value proposition. It’s up to resellers as to which value proposition to take,” he said.
The deal means that Synnex will be distributing both Seagate and WD products but Sheu was confident that the competing relationships could be managed.
“We have 3000 resellers, we are a big player in the whitebox market, so we give customers the choice," he said.
"There isn’t complete overlap in product specifications and pricing, so it’s up to the customer and end-user to make the best choice. We don’t dictate which drive they should have.”