Security vendor, Check Point, has terminated its relationship with Express Data in favour of a sole distribution agreement with LAN Systems. The decision is part of a broad review of its channel.
Country manager for A/NZ, Scott McKinnel, said its choice was based on two key criteria: continuing to service existing enterprise resellers, as well as extending the vendor's reach into the mid-tier market.
"The overriding driver was mid-tier communications capabilities - such as recruitment and skills transfer and education of partners," he said.
Check Point also maintained a global distribution relationship with LAN's parent company, Westcon, which would help foster a stronger Asia-Pacific regional focus, McKinnel said.
He dismissed potential concerns about a distribution monopoly in Australia, pointing to its sole partnership with ED in NZ as an example of the model's success.
"We have not found any concerns with a monopoly," McKinnel said. "We have closely monitored their [ED NZ's] margin levels to understand the dynamics of the market. We've got a good idea of what we consider to be the free market price for our products.
"We factored this concern in but see no cause for alarm."
ED managing director, Ross Cochrane, said the distributor had been doing business with Check Point for the past 10 years. However, it had represented less than two per cent of total sales.
He attributed Check Point's decision to go to a sole distributor model as a bid to increase sliding marketshare. While the vendor had initially fared well in a market focused on point security products, today's shift towards end-to-end security solutions had made it harder for it to compete, Cochrane said.
"From our perspective, we have a solid business in security which is growing faster than Check Point," he said. "As a small player in that space growing at 9 per cent per annum, I think they have found it hard to complete."
With Cisco covering in-built security in its network infrastructure products, and Symantec sitting across the security device space, Cochrane said ED would not be looking for additional vendors to fill the gap. The distributor's main concern would be to ensure its existing reseller base were not inconvenienced by the decision, he said.
Check Point announced it would undertake a complete channel assessment in November. At the time, McKinnel said the decision was based on sanitising its reseller ranks and ensuring partners had adequate technical and sales skill sets. It also followed the introduction of new education and training material as well as modifications to its partner tiers.
As part of the overhaul, the company also conducted a full review of its distributors. It had received tenders from existing distributors as well as outside parties.
"It became clear to us that appointing just one distributor and creating critical mass that way made economic sense, balanced against the risk of disengaging someone," he said.
LAN Systems general manager, Wendy O'Keeffe, said the distributor would be looking to more than double its Check Point business. The two companies had been working together for about seven years.
LAN planned to launch a new security practice with the vendor as its foundation member, she said. This would see it investing in a new team of both internal and external staff, including a new channel trainer specifically for Check Point products. The distributor would also establish business development managers to grow opportunities in both the larger and small states across the country, O'Keeffe said.
The vendor was now in the process of drafting a disengagement strategy with ED. McKinnel said he was confident the two companies could part amicably. ED would also remain its sole distributor in New Zealand.
Check Point was also still in discussions with existing security niche distributor, Firewall Systems, about a small selection of its non-core appliances.
McKinnel said it had also completed the review of its reseller ranks. While some partners had been shifted up or down the ladder, all had been retained. The vendor has 35 partners nationally.