Sharptext secures sole IBM rights
1 April 2005 | 0
?Resellers of IBM products who buy through the trade will now source all products from Sharptext, following the company’s appointment as sole Irish distributor of the vendor’s Intel-based systems.
IBM has taken the somewhat unusual step of nominating a single distributor to cover the Irish market, as Clarity’s contract to supply IBM products has not been renewed.
The new agreement covers IBM’s Intel-based desktops, laptops and servers. It is understood that Sharptext got the nod ahead of Clarity due to its long standing relationship with IBM. Sharptext already carries the vendor’s business software, enterprise servers and storage systems as well as its EPOS products.
IBM’s distribution channel had already undergone some consolidation: Sphinx had previously carried high-end IBM systems. However it withdrew from a number of countries including Ireland some time ago, following a company-wide restructuring plan. This left IBM with the choice of using a multinational wholesaler to fulfil distribution to the channel in Ireland, or strengthening ties with an indigenous supplier.
‘While a lot of the major IBM countries go for pan-European distributors, rather than look at bringing in a pan-European player, we felt it was more advantageous to use a local distributor,’ said David Tallon, IBM business partner and PC company manager. ‘We decided Sharptext was right for that business.’
Levels of accreditation
Tallon emphasised that the levels of accreditation IBM looks for in its partners are ‘quite onerous’, citing high end product lines such as DB2, MQ Series, and Pseries hardware. ‘There is a barrier to entry there, and the volume of business going through distribution has to justify the cost of training its staff,’ told ComputerScope. ‘We decided it was better to go with one distributor and give them the critical mass to make that investment worthwhile.’
The consolidation was driven in part by changes at IBM itself: Following some internal restructuring at the company, Tallon’s remit now covers the PC division in addition to the high end server space. ‘We’re beginning to see a lot of synergy and overlap between the two,’ he said. According to Tallon, business partners that had focused on the PC market have been looking at the high end storage and server space; conversely, large account resellers are now closing deals with some desktop sales.
‘The easiest thing for most companies to do is to add different products to their portfolio,’ he pointed out. ‘It’s easy to spot opportunities for other products in that account set. As the hardware market becomes more competitive, resellers need a broader portfolio and in turn there are more services opportunities to be had.’
Since taking on responsibility for IBM’s PC sales, Tallon said he had noticed a fragmented channel. ‘There were small amounts of revenue going through many partners. We needed one partner to take a very aggressive stance and an aggressive stocking stance right across our PC product range. In order to get a distributor to take that stance, you’re back to the question of critical mass.’
Sharptext continues to distribute hardware from other manufacturers and Tallon said IBM did not insist that the company cuts ties with other vendors in favour of IBM. ‘We’re not asking them to drop a brand, we’re just asking them to increase the resource and focus on to IBM.’
Historically, many of the leading vendors have retained two or more distributors in Ireland, to ensure adequate supply of products and to maintain competitive pricing. To ensure that Sharptext keeps the appropriate stock profile of products for the market, IBM has been consulting with resellers who buy from distribution and will use their forecasts to help specify what lines Sharptext will stock. The vendor also intends to oversee levels of end-user pricing and retained margin for resellers.
Tallon added that IBM, as a whole, is increasing its indirect sales across its entire product range. ‘We’re taking more direct business and bringing it through the channel,’ he added.