OnTarget, a subsidiary of Siebel Systems, has cut its distributors, Pelorus International and Alcuin International, because it believes going direct will give it a better chance of reaching its targets.
OnTarget, a $US50 million company which offers front-office marketing solutions, sales training programs and web-based field application tools, has bought back its licences from the distributors.
"We are doing away with distributors because the only way we will meet our sales target this year is to do it ourselves," said Carol Johnson, OnTarget's managing partner. She said OnTarget's sales target was to double its revenue to $US100 million this year.
"We have to make sure that our sales strategy meets our target. Because our distributors have limited resources and are selling other vendors' products in addition to ours, we are not in a position to push them to meet our very heavy target," said Johnson. "The market for front-office marketing solutions is growing tremendously and we need to make sure that we capitalise on these opportunities."
According to Johnson, its distributors were given the option of keeping or selling back licences to OnTarget. "They chose to sell back to us because it is financially lucrative for them to do so. If they did not want to sell back these licences, we would have honoured our contracts and let them continue distributing our products."
OnTarget has also roped in four consultants and six operational staff from its former Australian distributors. Johnson, for example, was formerly principal consultant at Pelorus.
OnTarget has moved its Asia-Pacific headquarters from Hong Kong to Sydney because "Australia has the pool of talent for the kinds of consulting we deliver. The costs of doing business and setting up an infrastructure are also lower here," said Johnson.
The company also has more customers in Australia and New Zealand than in Asia. "Just under $10 million in our revenue comes from Australia compared to $5 million from Asia." Its Hong Kong office now exists to provide consulting services to customers in North Asia. The company plans to open offices in Japan and Singapore.