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New vendors, bumper growth in wake of NetApp loss

By Heather Wright, Tue 28 Apr 2015
FYI, this story is more than a year old

Distribution Central is logging 17% year on year growth across ANZ, despite having lost the exclusive distribution of NetApp late last year.

Nick Verykios, Distribution Central managing director, admits the NetApp loss was a blow.

“We obviously had to change the business substantially. One third of the business was NetApp at the time that they appointed Westcon [in October].

“We haven’t lost much, which is the good news. The loss in share is immaterial and more than made up for with our new vendors, including SImpliVity and Pure Storage,” he says.

Verykios is blunt that the distributor has had to scale back the services it offers around NetApp, requiring resellers to sign on with Distribution Central as their preferred supplier in order to gain access to the additional services the company wraps around NetApp, including reference architectures.

“There were some things they were getting before that they now have to pay for unless they have signed a preferred supplier agreement with us.”

He says the majority of the company’s reseller customers have entered into a preferred supplier agreement.

“We’ve had to debundle some of the stuff they’re not getting elsewhere, because I have to compare apples with apple when others are just supplying the product.”

Verykios says the company’s work developing reference architectures, that include NetApp plus two or three other vendors, was the overriding reason why Distribution Central hasn’t lost much NetApp business.

“We have proven that we don’t have to be a distributor of every single product to be able to sell reference architectures,” he says, noting that the reference architectures often include vendors Distribution Central doesn’t distribute itself.

“What you need to be able to do is preconfigure them for a customer, put them together and then they can go and sell them, do the install, the managed services and do everything that makes them money.”

While he says NetApp was ‘completely transparent and absolutely sensitive’ to the effects on Distribution Central, he says he questions who wins in a move to dual distribution, and says suggestions resellers do are false.

“People try to go down the path of ‘the reseller [benefits] because they get it cheaper.

“But that means I’m getting less money so I can’t do as much for you as a reseller, which means you can’t do as much for your customer.

“It’s a false economy. The margin moves from me to you because you’re doing more work. But what if you’re not?

“The reseller absolutely does need choice – when they get to a point where they’re self-sufficient.

New vendors ahead

Verykios says Distribution Central is about to bring on a couple of new vendors in the unified communications space.

“We’re looking at is a lot more of the software based solutions, software defined unified communications solutions.”

He says one vendor is already in market, ‘and we’re working out how we can do it better’, while another is completely new to market.

The company is also looking at the power and cooling space, a potential new market for the distributor.

Verykios says Distribution Central is seeing ‘huge demand’ for its hyper converged storage with SimpliVity, one of its newer agencies.

Distribution Central was recently appointed a Palo Alto Networks elite authorised support centre, recognising the distributor’s technical expertise.

He says the security business has also doubled year on year, with Palo Alto Networks ‘going nuts’.

Palo Alto ringfenced its current channel for a year, when it appointed Distribution Central.

“At the end of nine months in that first year when we couldn’t touch the partners, we had 70% market share,” he says.

Two years into the distribution deal, the company is still believed to hold a major share of the market.

“[Security] has become an even more significant business for us. Which is nice, because that’s where we started, in security.”

Extreme Networks is also proving a winner for the company in the data centre market, along with Aruba in wireless, particularly on the guest access side with ClearPass.

Verykios says Distribution Central’s business is now evenly spread across the data centre, including storage; security and advanced networking segments.

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