Distributor diversifies business with multibillion-dollar project to counter plummeting product marginsDistributor Alstom IT unveiled its enterprise management centre last week in an effort to diversify its business in the face of narrowing margins on box moving.
The multi-billion dollar project is designed to assist channel partners in selling e-business solutions by adding help-desk capabilities, network management and complete enterprise solution management to their current offerings.
"We've added another value-add to our distribution model and given our resellers access to it so they can on-sell it as part of their solution, without having to incur the up-front capital costs," said Laurie Sellers, chief executive of Alstom IT.
Alstom will split the profits of on-going business with resellers at a proposed margin of 15 to 20 per cent. This figure is yet to be finalised.
"When a customer takes on an e-business solution they suddenly have a growing dependency on performance and availability, therefore network management becomes critically important," says Sellers.
"By offering the channel the ability to bundle a service with the products they sell as part of their total solution, we're hoping to give them the edge to win business so they'll end up with more satisfied customers and make better margins."
"We're offering resellers a service-related product to sell in a booming marketplace with high margins. It's also an offering they otherwise may not be able to afford to build themselves."
"When customers come out to tender for a solution, they ask questions about who's going to maintain and manage the solution. If you can't answer those questions you might get ruled out fairly early on in the process. We're enabling our resellers to answer the tenders completely and comprehensively, so they can stay in the game and use it to win business."
Sellers believes Alstom has pinpointed and harnessed the need to adapt value-add services to remain competitive.
"Distributors are living off the smell of an oily rag, because margins are slim just selling products. We have to respond to the needs of the market, but both us and our resellers can take advantage of the opportunities these changes bring."
Housed at Alstom's corporate headquarters in the Sydney suburb of Pymble, the centre is manned by a team of 40.
Its infrastructure uses Sun, NEC and SGI hardware, Nortel and Cisco networking equipment, HP OpenView, Veritas and Trend Micro anti-virus software, and Net Reality for bandwidth utilisation and packet shaping.