Adobe Systems has announced it will sell product upgrades through its Adobe Upgrade Centre in New Zealand rather than through the channel.
The move brings the company in line with its Australian sales model, which has been in place for more than 18 months. Adobe has outsourced its New Zealand centre to IT Direct, which currently provides marketing support and customer service on behalf of Adobe in the Pacific region. The centre will begin operation on June 1.
The company denied the sales strategy would undercut resellers.
"We are not trying to take business away from resellers - that is not the purpose," said Adobe Systems' Pacific sales manager John Biviano. "We want to streamline the operations and make them consistent with the Australian market and allow resellers to focus on service and support."
Biviano claimed with the exchange rate and low profit margins, resellers were making as little as 2 per cent on the shrink-wrapped upgrades.
"It is not a profitable way to do business," he said. Many resellers in Australia had addressed profitability by moving their customers onto a licensing program, or purchasing the upgrades from an Adobe centre and charging the customer a handling fee.
"It allows us to capture end-user data so we can market direct and push business back through the channel. This should ensure that the partners doing business with Adobe maintain their profitability," he said.
The move will also stop resellers from buying an upgrade and installing it using a serial number posted on the Web.
Biviano said the delay in New Zealand's implementation of the strategy in comparison with Australia was to ensure the company was established locally under the dual distribution model.
"We wanted to ensure the decision was the right one for the New Zealand market," he said.
The move would provide a platform for the channel to compete on an even playing field and enable it to take a more consultative role, he added.
"There are those resellers who claim that 40 per cent of their business was in pre-shrunk upgrades, but they have learned to live without that," he said of the company's Australian experience.
"Those resellers who don't have a high percentage of business based around service and support have had a hard time and I don't think they will survive in the future."