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Sorting wheat from chaff

Sorting wheat from chaff

I hate to admit it but the news that Avnet had acquired ChannelWorx came as something of a surprise last week. Having said that, it looks on paper like a very good fit - both organisations are focused on value-added distribution but ply their trades with different vendors. That should mean ChannelWorx can be bolted onto the existing Avnet business with minimum fuss.

Resellers and integrators that previously worked with one distributor but not the other are likely to see little change because all ChannelWorx employees have been retained and it will essentially become Avnet's networking security practice.

ChannelWorx vendors will see more positives than negatives because they will be working with the same people but through a larger organisation that should be able to give their products greater exposure.

Not surprisingly, ChannelWorx founder, Scott Lidgett, claims to have been approached by "all the usual suspects" in recent years with a view to buying the company. He wouldn't name names but you have to think itX and Cellnet are on the list, given that both have been very vocal about their spending aspirations in the past year or two. Distribution Central boss, Scott Frew, might also have picked up the phone at some stage since he decided to get back in the industry and how about Ingram Micro as it looked to build its solutions division?

Express Data and LAN Systems could also have been a good fit in some respects but they look less likely candidates given their Cisco allegiances. Whoever the prospective buyers were is history now but I think the consolidation that has been spoken about for so long is finally starting to take shape. A small number of established value-added distributors have very clearly made their bets around central technology areas like communications, mobility, networking, security and storage. They will continue to do battle for the hearts and minds of resellers and integrators focused on delivering solutions rather than selling products.

New distributors that are enjoying rapid growth also have very clearly defined value propositions and the generalist players have stalled. Ingram Micro is the obvious exception but it has launched a value business and a specialist POS unit within its broadbased model. Synnex has announced its intention to get the chequebook out as it looks to diversify, Cellnet's IT business has fl oundered amid a sea of management changes and lost vendor contracts, while other traditional hardware distributors have also mooted specialisation strategies as a way of improving their earnings capability. This is a trend we can expect to see continue.

There's no doubt it's a tough distribution market at the moment but that can only be a good thing for resellers and integrators.

Difficult conditions will force distributors to raise their game again and we will see them become increasingly more inventive in an attempt to differentiate. That should mean greater levels of support are available for resellers to tap into but distributors that can't hit the mark have a gloomy future.


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