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UPDATED: Disties count the costs of HPE distribution reshuffle

By Heather Wright
Fri 12 Feb 2016
FYI, this story is more than a year old

Distribution Central is expecting its inclusion as an distributor for Hewlett Packard Enterprise's full line of products will net the company an additional $200 million in revenue in the coming year.

Previously an Aruba distributor, Distribution Central was named as one of four Australian distributors to win full HPE distribution, alongside Sektor which will be a specialist distributor for Aruba and HP networking products.

Speaking to ChannelLife today, Distribution Central chief executive Nick Verykios says "I've said as a business we'll do $400 million this year. You can add another $200 million on top [with the HPE distribution].

"That's what we expect this could do for us - we could pick up another $200 million in revenue if we do it right."

Verykios says Distribution Central will 'go in aggressive'.

He says 'there's a whole bunch of business ready for us to develop'.

"What we do well is that we go out and we build business, we don't just do market share grabs because virtually every vendor we have put on we have had to develop from scratch, so we know how to do this."

He says what most excites him with the deal is 'what hasn't happened yet'.

"We got our engineers to look at their technologies, to look at the more disruptive stuff when it came to digital transformation, we looked at what the installed base can do with in terms of a refresh by working with some of the partners who don't do HPE at the moment, and came up with those numbers. It's quite a considered thing.

"Because we don't have an incumbency with them, we had to rely on going to market and doing our own due diligence and looking at what resellers who don't sell HPE want and what those that do are not getting, and we matched that with our own capabilities."

Dicker Data, Ingram Micro and Lynx Technologies have also gained full HPE distribution.

David Dicker, Dicker Data chairman and chief executive, says the rationalisation to the distribution line up ‘went beyond our expectations and has reaffirmed the strenght of our continued partnership’.

“We’re very pleased with this outcome and believe HPE have made the right decision,” Dicker says.

“We’ve been key partners for one another for many years and we’re projecting this to continue.”

The rationalisation appears, however, to have closed the doors on Dicker Data’s long held aspirations of handling HP in New Zealand as well as Australia, with the vendor unlikely to consider further changes to its distribution base any time in the near future.

Sektor will be a specialist HPE distributor, handling Aruba and HPE networking equipment only, in keeping with the distributor’s niche, specialist market.

Sektor and Ingram Micro will be distributing HPE on both sides of the Tasman, with the two distributors appointed alongside Exeed for the New Zealand market.

That’s a move that pleases Sektor’s Rhys Warren.

Warren, Sektor APAC managing director, says he’s pleased the company has come through the process as one of only two distributors with HPE distribution on both sides of the Tasman.

“If you think about a given end-user retail customer with a footprint in both countries, we can wrap up solutions and deliver it across Australia and New Zealand and that’s a nice to have for our reseller base,” Warren says.

He says Sektor’s role as a specialist niche distributor, focusing on the retail technology and enterprise mobility markets, means its channel looks ‘a bit different’ to the other distributors, and it runs ‘in parallel’ to the mainstream distributors.

“We operate on the fringe creating net new growth from a niche market,” Warren says.

He says moving forward, Sektor’s focus is on wrapping HPE networking and enterprise products and making them relevant to its channel.

“There’s an opportunity for any of the integrators and resellers and ISVs we service in the enterprise mobility space and retail technology space, if they aren’t already thinking about deploying networking into their existing customer base… to start doing that.”

Synnex and Avnet, both former HPE distributors with Synnex the last to join HPE's distributor line up, have lost the vendor from their portfolios, while Westcon, which handled Aruba, is also no longer represented.

Dave Rosenberg, WestconComstor Australia and New Zealand vice president, notes that Westcon was a legacy Aruba distributor, and never had an HP contract.

He says Aruba ‘became a very small part of the HPE RFI’.

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