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Editorial: Back to the future

Editorial: Back to the future

When Cisco recently announced it was giving Express Data and LAN Systems access to its Linksys products, it was presented as a way of stopping business slipping through the cracks. Channel manager, Suzanne Hansen, quite rightly pointed out that it was senseless to have distributors pushing your top-end products but switching to a competitor's wares at the other end because they lacked access to the Linksys brand.

But it did leave an obvious question to be answered. How long would it be before Cisco looked at its chain from the bottom up? The news that Ingram has been added to the Cisco ranks now makes it clear that this was already being addressed.

Cisco was the biggest vendor missing from the local Ingram portfolio - a point of concern made even worse by the fact that it was one of the networking giant's three preferred global distribution partners alongside Tech Data and Comstor (which owns LAN Systems).

But while the news will be a source of joy to Kerry Baillie and his Ingram team, Ross Cochrane [Express Data] and Wendy O'Keeffe [LAN Systems] must feel like they have just won a raffle only to get home and find their houses have been burgled.

After all, Linksys accounts for a tiny proportion of the local consumer and SOHO markets and they have both gained a serious competitor for their most important vendor partner. At LAN Systems, for example, about 25 per cent of staff work on the Cisco account.

While both LAN and ED will have to grin and bear it, they will no doubt have been seeking assurances about their futures in this new arrangement.

For now, Ingram boss Kerry Baillie has made it quite clear that his company has been charged with building the Cisco SMB business. The success Tech Pac recorded on the road in regional Australia during the past 18 months - a move that saw Baillie and his sales director, John Walters, shooting the breeze with resellers in places such as Orange and Dubbo over a couple of schooners in the pub - must have been a big factor in what is essentially a [Tech Pac] reappointment.

But while small business and small town Australia will be Ingram's focus for the foreseeable future, it stands to reason that it will ask for access to some tier one accounts if it delivers impressive numbers in the next year.

In an industry where margins are so tight, we have seen that the loss of a major account can be the difference between success and failure. Digiland, and to a lesser extent eXeed, both fell off the map after losing HP distribution rights. The loss of Cisco could have equally catastrophic consequences for ED or LAN.

But then selling Cisco boxes at the SMB end of the market and dealing with its corporate accounts is like comparing apples to oranges. The troops at ED and LAN are both battle hardened and there should be no doubt they will be ready for any fight that may materialise further down the track.

In the short term, vendors like Netgear and D-Link will feel the appointment puts their market share under more immediate threat. If I was running a distribution business at the moment, you can be sure those companies would be getting a call to see if we could do any business together. Brian Corrigan is Editor of ARN. Reach him at brian_corrigan@idg.com.au


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