“There’s a recognition that we’re quite a small market here that’s quite different from the UK,” he observes. “We have a very good partnership arrangement with EMC. We work together very closely on a lot of things that wouldn’t have been considered to be distribution tasks. For example, we do a lot of end user type marketing with EMC and a lot of EMC messaging is produced by us. We hold quite a lot of its marketing budget and marketing fund. I think there’s a symbiotic, synergistic relationship there that works well for everybody at present.”
The distributor has to ensure it does a good job, manages the relationship well and maintains a very good relationship with its resellers. “If one of the globals got a contract for Ireland [with EMC], I don’t think we’d lose much business,” Owens says, “but it would depress margins and leave less resource to do the value added activity EMC wants. Pro rata, global distributors have much less people working on a vendor than we would have.”
Tiers
Building on its relationship with SonicWALL, Commtech has just been appointed to distribute all Dell’s products in Ireland. It is a big opportunity because Dell is moving more towards the channel and it has a strong footprint in Ireland. “Currently, Dell business through the channel is single tier but it wants to move to two-tier with distribution focused on partners outside the top tier,” Owens explains. There will also be opportunities for Commtech to do business with top tier resellers looking for more flexibility in credit or better response times.
“It’s a good opportunity for us in 2014,” he says, “that will help balance some of the concentration we have in existing business.” While he is unaware of any plans by Dell to appoint another Irish distributor at the moment, he believes that the business is big enough that even if another distributor did come on board, it would still be worthwhile.
“The nice thing about Dell is there are a good number of partners and a good spread and it gives us product we can sell to a large number of customers,” Owens adds.
As for the distributor’s other areas of business, he admits that the end of its VMware distribution contract took away the core part of its virtualisation piece. Nevertheless, it is “still a very important part of our business”. He cites Veeam, which is growing rapidly, and points out that virtualisation and storage are different phases of the same infrastructure that have changed what IT looks like over the last 10 years or so.
While it contributes less revenue than previously, “it’s a very, very important part of our business because of the way it’s linked into other parts of our portfolio. Over the next two to three years there will be a massive push towards software defined networking and software defined storage. Just as virtualisation did with servers, we’re going to see the same in networking and storage”.
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