Siemens makes indirect move

Siemens makes indirect move

Vendor sees distribution deal with IPL as the key to gaining market share

Siemens Enterprise Networks is shifting from a direct to indirect sales model and has appointed IPL Communications as master distributor.

Siemens general manager, Mario Vecchio, said the business had faced many recent challenges. As part of a massive restructure, the enterprise business is now running as a separate legal entity to Siemens Australia and reports directly to Siemens Enterprise Communications in Germany.

"We have disconnected ourselves from the [overall] organisation. Part of the reason for spinning out was because we were losing money," he said.

Siemens' global business has also experienced a tumultuous year, rocked by fines for price fixing bribery scandals involving its executives in Germany.

Vecchio said his focus was on building local market share from 5 to 15 per cent in the next two years. Appointing a distributor would help it to gain coverage, resources and skills, he said. IPL was picked because of its ability to fulfill three skills criteria around voice, data and IP.

"Some of the biggest challenges we faced was our lack of market share. Whilst our channel partners were very technically capable, we need to help them sell," he said. "For us it was about speed to market with our products, lowering our costs, becoming innovative and rectifying our current market share."

Siemens' 16 existing partners will transact with IPL. Commander is being given direct access to the enterprise product range.

"We have IPL and Commander connected to our global systems and support centres, which we had not done before. That allows our team to focus on customer-facing activities," Vecchio said.

IPL CEO, Stead Denton, said Siemens had been seeking a partner that could add value.

"We have a delivery service of pure IP and PABX in the market place," he said. "Wherever Commander has a geographic or demographic presence, we will work with them to gain equity in the brand.

"Our goal with Commander is to form relationships with individual franchises. We would like to have some dedicated sales people working with them regionally."

Denton is in the process of hiring eight technical and sales staff including separate sales forces to work within and out of Commander.

Commander group general manager enterprise, Steve Evans, said it had a long relationship with Siemens. He argued the vendor's previous model had restricted product flow and lacked a strong technology road map and direction. Its multi-tier support had also gotten in the way of rapid responsiveness.

"What it's now giving our customer base - corporate, enterprise and government - is a clear roadmap, which is what was missing before when we had that extra layer between ourselves and the Siemens mothership," he said. "Customers that had Siemens products did not know what was going to happen - if they could move from TDM to IP for example.

"We have made some investments recently in re-skilling and up-skilling our technical staff. The implication for our customers is that they get more in-country support, rapid turnaround on faults and services, access to the product suite, extended life of product and additional functionality."

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