NEC to Sell Only Through Channel

By Pedro Pereira  |  Posted 2005-07-25 Email Print this article Print
 
 
 
 
 
 
 

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NEC is abandoning direct sales altogether, opting instead for a 100 percent channel strategy. To put the strategy into effect, the vendor is leveraging a newly minted relatioship with Avnet.

NEC Solutions America this week is putting an end to direct sales of its Itanium 2-based servers, software and storage solutions, opting instead for a channel-only strategy the vendor says is integral to its growth plan.

The vendor is launching the Express Partner Program, through which VARs and integrators will source NEC products from distributors Avnet Partner Solutions, of Tempe, Ariz., and Pittsburgh-based Team 1 Systems Inc. The partnership with Avnet is new and kicks off with the launch of Express Partner.

The company is adopting a channel-only strategy after concluding that leveraging partners to get its product to market will reap bigger rewards than continuing to invest in a direct-selling infrastructure, said Efrem Z. Stringfellow, vice president of North American sales for NEC's Solutions Platform Group. Conversely, partners stand to benefit as well, he said.

"We think we'll bring tremendous value to those partners that choose to partner with us," he said. "We're looking for a few good partners; we're not looking to saturate the market."

NEC, a $47 billion company with U.S. headquarters in Santa Clara, Calif., has a strong market presence in Asia and has built brand awareness in North America primarily with display technology, such as monitors and projectors.

The company wants to further boost brand presence in the United States with its fault-tolerant and Itanium servers, software and storage. Working through partners is the most effective way to accomplish this, Stringfellow said.

NEC has been doing about 20 percent of its business through direct sales. By moving that business to the channel, NEC executives want to assure resellers the vendor has no intention of competing with them.

Stringfellow, who has worked at IBM and Silicon Graphics Inc., said he has experience with hybrid models that combine direct and indirect sales.

Judging from that experience and from various channel programs currently in existence, he decided that a 100 percent pure channel play would work best.

Dave Ochser, director of product marketing for enterprise storage and software at Avnet Partner Solutions, said resellers that carry the NEC products will have several options in how much of the solution they deliver.

Those partners that have service capabilities will have the option of wrapping the services around NEC products, while resellers that would rather sell but not deliver the services will be able to do so, said Ochser. The latter may opt to buy NEC services as an SKU through Avnet and resell them to customers.

"We're not looking to compete with the partners for the services business," Stringfellow said.

NEC decided to partner with Avnet because of the distributor's solutions focus experience with enterprise technology, said NEC executives.

"Avnet has partners that go very deep in certain areas, such as storage," said Mike Mitsch, NEC alliance director. He added that NEC spent a lot of time working with Avnet to develop a program that would allow reseller partners to differentiate themselves from the pack through the NEC offerings.

Much of Avnet's business revolves around sales of IBM and Hewlett-Packard Co. midrange systems.

Ochser said that before engaging with a new vendor, Avnet takes into consideration whether adding another brand will dilute the distributor's existing business or create conflict.

"This relationship really takes Avnet's value proposition to a higher level," he said.

Partners who carry the NEC brand will be selected according to technical capabilities and regional reach. NEC wants to keep competition between partners to a minimum, Stringfellow said.

The other distributor authorized by NEC, Team 1 Systems, has carried the brand since May, when it made its partnership with NEC official. Express Partner, said Team 1 President Debbie Dora, expands the relationship between the two companies.

"The Express Partner Program positions our resellers to profitably grow their businesses while improving their overall product and service offerings," she added.

 
 
 
 
 
 
 
 
 
























 
 
 
 
 
 

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