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It's now or never

It's now or never

In the five years that I've been writing about the local IT industry, the relationship between Cisco and Ingram Micro has been without question my favourite ongoing story.

There shouldn't be much worth talking about - the world's largest IT distributor carrying the world's largest networking vendor should be a match made in heaven and, in most countries where the two coexist, it works very well. Not so here in Australia. The story to date reads like a soap opera script but there are at least some reasons why there might still be a happy ending.

First, a recap is in order. Five years ago, Cisco conducted a detailed review of its three existing distributors (Express Data, LAN Systems and Tech Pacific) before dropping Tech Pac. This raised a lot of eyebrows at the time because Tech Pac was very much the dominant player in the market.

In order to get over the line, ED and LAN were forced to sign their names in blood, swear everlasting Cisco love and make some very serious commitments to the reigning world champion of networking. So, understandably, there was much wailing and gnashing of teeth when they were informed that Ingram Micro had gatecrashed the party just 18 months later. Two was company; three was very much a crowd.

To make the announcement even more intriguing, Ingram Micro had acquired Tech Pacific and was being led by the same management team that lost the Cisco contract in the first place. This had been one of the worst moments in Kerry Baillie's distribution career and winning Cisco back for Ingram was one of his final major achievements before walking off into the sunset.

In order to placate ED and LAN, Cisco banished Ingram from the enterprise garden. It was a big call and made sense on the surface because it meant the only way Ingram could make the relationship work would be to create new SMB business rather than cannibalise the existing market with lower prices.

And so was born a delicious catch-22 - Cisco said it would consider giving Ingram keys to the enterprise market if it made a big splash in SMB; Ingram argued it couldn't make the model work without access to the full Cisco range. If we fast forward a couple of years, things haven't really changed very much because Ingram still does less than 10 per cent of Cisco's distribution business in Australia.

However, Cisco's desire to establish itself in the genuine SMB market might finally make the difference. Few of Cisco's existing tier-two integrators seem interested in playing with Ingram but if Cisco succeeds in grabbing the attention of small business owners, Ingram has a ready-made army of resellers capable of servicing them. It must bother Ingram that Cisco is encouraging ED and LAN to play in SMB after putting a fence around enterprise but the cards have been dealt and now it has to play them.

If Ingram can't make a Cisco partnership work locally during the next 12 months, the truth is it probably never will. I can't see this one headed for the divorce courts, simply because the international relationship is too strong, but it could yet end up as a loveless marriage. It's now or never.


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