Hewlett Packard Enterprise has named its distributors for the Australian market, with Dicker Data, Distribution Central, Ingram Micro, Lynx Technologies and Sektor coming out on top following a review process.
As reported first by ARN, the decision also sees Westcon, Avnet and Synnex miss out following the shake-up, which is effective May 1, 2016.
With the dust now settled, ARN talks to the winners and losers...
Avnet vice-president and general manager A/NZ, Darren Adams, said that while the distributor is disappointed to miss out, he was still not sure why due to a lack of communication from the vendor.
"There was an email sent to HPE resellers and Avnet were not copied on that, our notification did not include the detail as to who had won and who had lost, only that we had been unsuccessful,” he explained.
Adams told ARN that he has requested a debrief but none has been forthcoming as yet.
“We are disappointed to lose, having said that it represented about seven percent of our revenues in Australia," he adds.
Adams says that the additions of products like Nutanix, Hitachi Data Systems (HDS), EMC and Tintri - all of which are competing products to HPE - to the Avnet portfolio means that the distributor is still "well placed" to meet the needs of its partners in this space.
“It was a good line for us, HPE is a great company with some great technology and it is a shame to lose it," he adds.
Speculating on why Distribution Central won, Managing Director Nick Verykios told ARN that without incumbency, the distributor relied on advice and insight from its own channel, to understand what works within the market.
“We’re going to do $400 million this financial year and HPE will add another $200 million to that, it’s a huge deal for us,” Verykios told ARN.
“We spent a good six weeks building a task force that went out to market to carry out due diligence.
“We looked at the market pain points and what we could actually bring to the table and solve.”
Crucially, Verykios says Distribution Central sourced key resellers who are not working with the vendor at present, “but should be doing HPE.”
“No vendor is an island, neither is a distributor but when you put the vendor and distributor together, one plus one has to equal five,” he adds.
“Otherwise it’s not worth changing and we backed it up with evidence that HPE plus DC equals five not two.
“We focused purely on resellers that don’t do HPE, but should do HPE because their customers need the technology, they just don’t know about it.”
According to Verykios, the deal compliments Distribution Central’s current vendor portfolio, through the vendors “wide range of disruptive technologies.”
Dicker Data retained its HPE portfolio. The distributor's chairman and chief executive, David Dicker, said the company was buoyed by the vendors decision.
“We’re very pleased with this outcome and believe HPE have made the right decision. We’ve been key partners for many years and we’re projecting this to continue," he said in a statement.
“The rationalisation to the distribution line-up went beyond our expectations and has reaffirmed the strength of our continued partnership.”
Ingram Micro Australia vice-president and managing director, Matt Sanderson, said the company is delighted to have been selected to remain a distributor of HPE.
“We are also delighted to gain access to the Aruba portfolio, allowing us to continue to provide our customers with a deep enterprise range accompanied with the services required to support them in their business.
"The strength of our HP partnership goes back many years and we not only look forward to continuing this great relationship, but also to continue to strengthen our joint offering to the market and drive continued growth in this dynamic segment,” he said.
Over at Lynx Technologies, Managing Director, John Gabor, told ARN via an emailed statement that the distributor is "extremely pleased" to have retained distributorship of the HPE portfolio.
"In this rapidly evolving IT and business environment, we believe the HPE portfolio and solutions are uniquely positioned to empower our resellers to best serve, or even transform, their customers," he adds.
Synnex and Westcon both declined to comment.
From a partner perspective, David Abouhaidar, Director Strategic Alliances & Commercial Sales, AC3, told ARN that while the review will not impact business as such, he "welcomes the change" and applauds HPE for making some "tough decisions".
"It's never easy to part ways from a long term partnership but I believe it reinforces HPE’s commitment to the channel," Abouhaidar adds. "Congratulations to the winners and commiserations to the ones who lost out."
ARN also approached the HPE team locally, and received the following statement - via email - from Alan Hyde, Vice President and General Manager of Enterprise Group, South Pacific, Hewlett Packard Enterprise.
"Hewlett Packard Enterprise (HPE) was created to be a more nimble customer and partner-centric company," he stated.
"Following the acquisition of Aruba, we conducted a review of the distribution framework in Australia and New Zealand, and have identified distributors that will provide products for the combined Enterprise Group solutions.
"The dedicated leadership team across South Pacific will continue to advance HPE’s long-standing commitment to the channel and help partners accelerate growth through delivering comprehensive technology solutions to meet today’s customer demand."
Channel Dynamics co-founder and director, Cam Wayland has done work with both HPE and its partners and said he didn’t read too much into the fact that it was the local distributors that came out on top.
“Vendors make these decisions based on who is the best fit locally for their requirements at that point of time and the foreseeable future,” he said.
“The challenge that HPE and other large vendors face is that they have global relationships in place and there is significant pressure to accept that global fit, regardless of what the local market is doing.
“That’s really tough for both the distributors and also for the vendors being forced into that situation.
Wayland added there was significant pressure but ultimately, the local office went to review to determine what capabilities the new organisation wanted from its channel.
“They had to make that call in terms of the mix of partners that would give HPE the best competitive advantage and the most cost effective way of getting to market."