Achieva Technology wants to transform from a traditional IT components box mover to a value-added distributor (VAD), and is building its enterprise portfolio to do so.
Achieva has been an active player in the components space since it entered the Australian market in the 1990s, but its internal structure and go-to-market was overhauled following the appointment of Vincent Wu as managing director in November 2011.
Wu said he introduced a new direction for the business because he observed shrinkage in the local market, realised the distributor had too many identical products from various big-name brands, and was internally inefficient.
As a result, Wu cut ties with a number of vendors (including Asus and MSI), closed down two of the distributor’s warehouses leaving it with only two, and slashed headcount by more than 50 per cent from 48.
The move reflects Achieva’s global plans. Alex Tay, special assistant to the Achieva Group chief executive officer (CEO), told ARN the last 12 to 24 months have been tough.
“New competitors are coming in, margins are falling, the DIY market is shrinking, and national micro-factors are impacting profitability,” Tay said. “Over the last 12 months we have tried to be more efficient in order to differentiate ourselves from competitors.
“From the management level, we are going to be very clean moving forward to give country managers a better direction to follow. We changed the group general manager and we are looking at someone new to be our financial controller. We used to look after six countries, but now three: Malaysia, Australia and Singapore.”
“We are trying to add value to all stakeholders,” Tay said. “We want to be more than just a distributor; we want to add value with services, including pre- and post-sales support.”
But despite a renewed focus on services, Tay is adamant the vendor does not intend to take out its partners.
“We are not competing directly with resellers. We can still be a one-stop shop – we can distribute, provide services, and market research – but that does not change the fact that resellers get the products at a better price than anyone else.”
Tay’s message to resellers is: “You know your local markets better than we do; we are not moving away from you, but adding services for you.”
Growing the enterprise
Achieva recently signed a distribution agreement with storage vendor, Promise Technology – a brand more commonly known as Apple’s storage supplier.
It is a network-attached storage (NAS) play, and while Promise caters for a range of market segments, from SOHO to enterprise, Achieva is interested in the latter.
“We have been carrying storage so long, and I want to recruit products that have a relationship with the hard disk drive (HDD) vendors we already have,” Wu said. “Promise has something that is niche, and they are very strong in it.”
“They have a strong enterprise play that Synology and QNAP can’t offer. On the enterprise level, they’re competing with EMC and HP.”
Achieva’s enterprise focus will be supplemented by an increased headcount. Wu said he will add at least four to six new staff to the distributor’s salesforce; two in New South Wales, two in Victoria, and one in its major states.
“Last year the IT market, especially in distribution, was very bad for everyone,” Wu said. “We were about 35 per cent down compared to the previous year globally. The landscape is very dense.”
“Now that we have become more effective and lean and brought new products on board, we are ready to add on more people to focus on enterprise.”