Motorola ISG redesigns traditional channel model
- 18 September, 1996 14:20
When most vendors set up their indirect sales channel, there is a clear differentiation between their role and that of the channel. More often than not this leads to the formation of two- or three-tier distribution, with the vendor managing its overall presence in the marketplace.
But when Motorola ISG came to setting up its channel, country manager Steve Terry sought a structure that provided channel coverage while minimising its size. "We could have adopted the standard model, which is to appoint a distributor or two, and hope that they can cover all channels," said Terry. "But we looked at it and thought there's got to be a better way we can do this."
Motorola had identified six specific channels areas it wanted to work in, from OEMs to VARs and ISPs. The question for Terry was how to service the needs of all of them while keeping the operation small? "The thought was, what if we outsource this? A lot of people outsource their third party support, so maybe we could outsource this concept of channels management and sales activity - the front end of Motorola."
Terry then went into discussions with Motorola's distributor MegaDyne Communications. What emerged is a model whereby MegaDyne takes on a fully representative role, said Terry. "Rather than find a distributor, we've gone a few steps above this and thought there's got to be a smarter way. So we asked MegaDyne to come on board as a partner for Motorola, and take on the channel management functions."
Essentially, the new arrangement places Motorola ISG and MegaDyne at the same level in the value chain, although Terry says Motorola maintains overall management. "We still have a fair bit of input, but basically we've said to MegaDyne here are the identified channels, here's the structure under which we like to operate - go and do it."
MegaDyne general manager Wayne Wilson says the result has been the creation of a team environment. "We're providing a service to Motorola and representing Motorola, so that from the marketplace's perspective we are Motorola ISG."
The relationship has already borne fruit, with the signing of Techway's Network Services division to work with Motorola's voice/data integration products. According to Techway managing director Jon Brett the arrangement with Motorola is a perfect fit. "Techway is rapidly expanding its presence in the voice/data integration market segment. Motorola came along with exactly what we needed, what our customers needed, and what our news sales force also needed.
"We've been active in this area for about a year, and we have an enormous amount of technical skills to back Motorola up in maintenance, delivery, design, implementation and ongoing support of the products."
Wilson says the channel structure involves a great deal of trust between the three players. "It hasn't happened without a lot of effort".