IN THE HOT SEAT: Challenging memory perception

IN THE HOT SEAT: Challenging memory perception

Originally hailing from Montreal, Canada, with a background in software consulting, Kingston's country manager, Keith Hamilton, has been facing-off against the challenges of the hardware market. He has overseen the release of new products and strategies to deal with the hard facts of falling prices and margins, and has found new opportunities in flash and the top end of town. Now he's working to beat the beast that is brand perception.

Could you describe your role with Kingston?
Keith Hamilton (KH):
As country manager I'm involved at all levels of the business - looking after the channel and on the corporate side with our pull-through program.

What is that program about and how does it help the channel?
We go out to the top 100 corporate end-users and we educate them to the view that they should standardise on Kingston products. That pulls through the channel as they are the ones who fulfill that. We have employed that strategy from day one and it is now quite mature and effective as we have a four step structure and tools customers can use. We are now focusing on the push end.

What is the strategy there?
The push strategy is about rewarding the channel for structuring deals, quotes and tenders with Kingston memory. As an example we recently had a program rewarding channel partners for structuring deals using Kingston-branded 512MB and 1GB notebook modules. We got a 40 per cent spike in notebook module sales during that period. The message we are trying to communicate is that Kingston is about quality and if you choose quality products then you eliminate down-time and lost profits. There are a lot of barriers which have been created by corporates through fear, uncertainty and doubt.

Where has this conception of a lack of quality around Kingston come from?
There is a perception that you must use a particular option from a vendor otherwise there can be warranty issues. The fact is everyone can use whatever RAM they want. Users need to know that you can compare apples with apples when you compare Kingston to another vendor's RAM. To help with that we're ramping up our KingstonCare program, which offers free services on our workstation and server memory products. We also have a similar agreement specifically for IBM customers. They are part of our pull at the top end of the market.

How your channel is structured?
We have a distribution channel with four partners supporting resellers and an OEM channel. On the distribution side, Ingram Micro offers excellent reach, especially into retail for our flash products and Simms International, which is focused on memory, is ramping up in the digital photography channel. Synnex is very strong on the components side and has relationships with complementary vendors such as Gigabyte and Intel. Dicker Data is very good with notebooks as well as mid-sized and regional-based resellers. I'd go as far as to say that we have a channel model which a lot of vendors would kill for. We have the resources, the reach, and we get the results.

Flash seems to be pretty hot at the moment - what's happening there?
The thing with flash is that it's removable storage versus DRAM which is tied to a computer. The fact that it's removable means there are more applications and, as it's disposable, the refresh cycle is good. We expect the market to explode here as all our distributors are keen to get on board. Locally, we have had 245 per cent growth in flash sales since the start of this year and we haven't seriously penetrated the retail market yet.

Is the DRAM market dead then?
DRAM has been soft and is trending down price with a lot of wait and see attitudes, though we are up year-on-year. But it's single figure growth. We are trying to get the buy-in at a corporate level and get them onto higher capacity modules so there's more margin for resellers. We have experienced 30 per cent growth year-on-year with our servers and we expect to continue that with this program.

Are there other opportunities in the year ahead?
I think there's a big opportunity in the value RAM space for us. You'd think that the market would go for the cheapest RAM but they are going for our value proposition of quality. The bigger systems builders are the low hanging fruit if we can get our message out to them.

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