Enterasys embraces in-house distribution
1 April 2005 | 0
Networking manufacturer Enterasys has revised its Irish distribution arrangements and is now supplying resellers with products directly from its Shannon manufacturing facility.
The company attributed the move to the nature of its product profile and relatively low sales volumes. According to Didier Lebret-Renault, country manager for Enterasys in Ireland: ‘Distribution is good once you have a certain turnover in the market and when you have commodity products. We don’t have commodity products’.
Previously, Sharptext had carried the company’s networking hardware and Espion had supplied Enterasys’ intrusion detection system under a sub-distribution agreement. Their contracts were not renewed after the end of the first quarter of this year. Enterasys has implemented similar cutbacks to its channel elsewhere in Europe.
Unfavourable market conditions also played a role in Enterasys’ decision. ‘Espion would have been a victim of that, and the security sales cycle is a lot longer than it used to be,’ said Lebret-Renault, who praised Espion’s technical expertise and said the company had done a ‘fantastic job’.
The vendor’s Shannon base is staffed by a team of 100 people and from there, it carries out logistics functions for much of the European and Asian region. Under the new arrangement, the facility is now fulfilling these tasks for the Irish market. Enterasys can supply products to resellers who wish to hold stock, or it can ship directly to end-user customers if required.
‘We reassessed our model and concluded that we already had a distribution centre, which was ours,’ Lebret-Renault explained. ‘It didn’t make business sense to use distribution in Ireland.’ He emphasised that this arrangement would be reviewed on a quarterly basis and that certain subsets of the company’s product range may be supplied through distribution again at some point in the future.
Enterasys’ revenues for the whole of Ireland were $10m for the calendar year 2001. This figure included some services and maintenance in addition to product sales. ‘If our company had done three, four or five million worth of SME type products, then yes, we would need distribution, because you need so many resellers to ship that volume of product. But we don’t have that product set, we play in the enterprise space.’