The local operations of Digiland have run into further trouble with hard drive heavyweight, Maxtor, confirming it has ended its three-year relationship with the IT distributor.
Continuing the recent consolidation trend that has been sweeping through the industry, Maxtor is thought to have been weighing up its distribution options during the second and third calendar quarter of the year.
While the process brought more bad news for Digiland, it was smiles all round for retained partners Ingram Micro and eSys.
Maxtor national sales manager, Craig Davis, insisted the decision to terminate the relationship had been reached by mutual consent and was not based on recent performance alone.
“We wanted to go back to a two distributor model and are constantly monitoring the performance of our partners for many things including coverage, new business won and future business directions,” he said.
“At this point in time Digiland were not the ones for us. It was a mutual decision.”
Losing another of its high profile vendors is another serious setback for the Australian operations of the Singapore-based distributor. As previously reported in ARN, it was axed by HP in September and has since reduced its local workforce by more than half.
Last month, plans to merge with eXeed were scrapped seven weeks after they were made public because the two companies were unable to reach a financial agreement.
Director of operation for Digiland in Australia, Colin de Costa, declined to comment on latest developments when contacted by ARN. Maxtor’s Davis said the storage industry in general was showing great growth but had seen a lot of consolidation at vendor level that was driving a similar process through the channel.
“If you go back 10 years there were probably a dozen storage vendors but that has now been reduced to three main players," he said. "There is less room for competition and margins are a lot tighter,” he said.
“That forces consolidation in the rest of the channel. Today, you only do business with two [distributors] – some are stronger and some are falling down.”
Maxtor has had a distribution agreement with Ingram Micro for about three years. It only added eSys to the local list in April but the two companies have had a global relationship for several years.