Adding more value is a key focus for D-Link and its channel this year. In the third and final part of an interview with ARN's NADIA CAMERON, local managing director, Domenic Torre, talks about its distribution strategy, future product direction and how he sees the networking competitive landscape changing.
Q: D-Link has a diverse distribution network. In the past, you have said it doesn't necessarily give you the business reach. What changes can we expect to see?
A lot more D-Link feet on the street. Right now, we have four guys in NSW and two more coming on-board. They're knocking on doors, looking for opportunities and assisting resellers with demand generation. We're also providing them with funds to do that and looking at specific market segments. We can rely on distribution to do that but that's not their forte - their forte is time, place and delivery.
At this point in time we are a bit over distributed. I don't want to say we're cutting anybody right now - our intention is to up-skill. There are a couple of distributors we are currently up-skilling to be more focused on the commercial side and, long-term, they will reap the rewards because they will have that reseller base. But a lot of it is also going to come down to what we, as D-Link, can do. I don't think it's any one particular organisation that will achieve this for D-Link - we have a big responsibility to make it happen.
Q: Many small businesses today are choosing to buy technology products from retailers. Do you see smaller resellers being forced out of the SOHO market?
It's a tough one to answer. It all comes down to the value anyone provides. What's the value of a retailer? They have brand A,B,C and D of a particular product category in the one shop and you can talk to somebody about which is the most suitable for your usage. The reality for some smaller independents is they can't afford to have so many vendors on the shelf. But I think there is a place for them still. When you look at the mass merchants, they have huge overheads and they have to sell products at a premium price - more often than not you'll find mass merchants are selling at almost the full RRP that vendors have suggested.
There will continue to be a place for small resellers but they need to offer value above buying and selling. For example, specialising in a particular vertical or addressing a local region. That's where regional groups like Leading Edge do very well. They use the power of the group to address a niche need.
Q: You have cited a couple of technology areas D-Link is looking to broaden out to, including storage. Will we also see you become more active in the voice and data convergence space?
We'll definitely invest in voice and data. Today, D-Link has multi-port ATA solutions and IP-PBX solutions but I don't believe they are ready for this market yet. There's a bit of work we need to do with the products to make them friendly enough for the systems integrator to install. One of the big benefits of our organisation is we have a stake in a lot of other manufacturers and can access a lot of technology. In Australia we're probably only selling about 70 per cent of what we could potentially sell because we feel we'd be stretching ourselves with some products. Core switching technology with true IPv6 to the core is literally around the corner. But in Australia I can't seeing us selling many of these initially. And voice-over-IP solutions are there, but we don't think we can support them properly yet, so I'd rather wait until we have the channel skilled up and capable of selling the product.
Q: Any predictions on how the networking market will develop over the next five years?
At a consumer level, one of the biggest challenges is supporting customers when they buy a product so it just plugs in and works. If I'm to make a prediction at a consumer level, the focus will shift to value-added services that simplify installation and ensure products work first time. We have technology today that allows a consumer to walk in and be assisted in provisioning product directly via a D-Link portal. There are other products we have seen - for example, our consumer VoIP product, which is a version of our existing cordless deck phone - which can be automatically provisioned to do similar things to Skype. There are security products for the home where we can plug in an IP camera and a digital photo frame, and it will automatically find it through the power point. You don't have to have any knowledge of IP. You can then plug it into your broadband router, register it on the portal, and use it anywhere around the world. There's a lot of convergence around the home, in particular, and what we are trying to do, along with other vendors such as Linksys, is take a bit more ownership of the customer by providing them with services that are going to assist them with their lifestyle. In the business world, the focus needs to be more on solution selling. I don't think there's a place for many vendors with only one product line.
Q: So will all of your competitors today be there long-term?
Look at our competitors today and what they were doing even two years ago. Netgear has introduced a lot more products and is coming up with more of a solution. And if you look at Cisco, they have always been there with a complete solution - switches, IP telephony - which almost locks in an organisation. So I think from a vendor point of view, that's where the changes are happening. A lot of the vendors are aiming for the complete solutions. Even look at HP - first they had printers, then PCs and networking. Now they're trying to get into wireless.
Another thing being driven at a vendor level is services. We can no longer walk away after the sale: we need to provide more pre-sales and post-sales services. We have put this in place already - we have a relationship with NCR who does our response-time, maintenance work with corporate customers. Localisation is important too: If we don't have local representation, we won't succeed. So much of it is to do with engagement.