Emerging geographies blur channel roles

In Brazil, 3Com has named Philips – which has worked as an integrator for the networking vendor in the region for the past couple of years – as a value-added distributor for its entire product line.

This used to be a role performed by Westcon, up until last year. But now an integrator is taking over that role, and Philips has signed an agreement with 3Com that is similar to other distributors in the region.

Of course, the channel is often a blurry kind of place, where VARs and integrators sometimes act as distributors. But this is a pretty big deal, where Philips will become a major distribution partner and work in collaboration with 3Com partners (Philips says it’s already starting to transfer projects to some of those partners).

Would this ever happen here in Canada? It’s unlikely. Brazil is a vast country, and Philips is already established in the region – and in some cases it may have a stronger foundation than newer distributors trying to get a foot in the door.

Whatever the case in Brazil, it’s different in every other country around the world. Canada already has an established distribution channel – and for many years was over-distributed – while some up-and-coming geographies are not yet established. And that opens the door to different types of partnerships – some of which may not be to the liking of traditional distributors.

3Com Brazil has developed new value-added distribution consulting services in an effort to increase business activities in the channel (for projects greater than $200,000). The Brazilian subsidiary is expected to grow 58 per cent in the last quarter of this fiscal year, and it’s already invested $1 million in technology support. As for Philips, it has 80 representatives, and of those, 10 will be part of this program.

Brazil is viewed as one of the most up-and-coming economies in the world, from mining to manufacturing to service industries. Hydroelectric power supplies 92 per cent of the country’s electricity, so it has reduced its dependency on oil.

Almost a third of its GDP can be attributed to the manufacturing of computers, cars and aircraft, as well as other goods.

Telecommunications is experiencing huge growth. Clearly, there’s potential in this market, and a lot of companies have opened up subsidiaries here.

Other distributors also want a piece of the action, in Brazil and other booming markets – especially since business is a bit flat in North America right now. But, when it comes down to it, distribution is all about relationships. And those that have established relationships – even if they’re not traditional distributors – may be the ones that start getting the deals.

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Jim Love, Chief Content Officer, IT World Canada

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Vawn Himmelsbach
Vawn Himmelsbach
Is a Toronto-based journalist and regular contributor to IT World Canada's publications.

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