As part of a reorganization of its business around vertical markets, Fujitsu is turning to the channel by expanding its relationship with Synnex. This comes at a time when IBM (NYSE: IBM) has decided to de-authorize Synnex as a software distributor in the U.S. (In Canada and the Asia/Pacific, Synnex is still authorized to sell IBM software.)
Last October, Synnex was shocked to discover that IBM had decided to end its distribution relationship for IBM xSeries servers as of January 2009. At that time, though, Synnex thought the software business was safe – but clearly, that’s not the case. As of Oct. 1, Synnex will no longer sell IBM software in the U.S., as part of a “mutual agreement” with IBM.
It could be worse – this move affects less than 100 solution providers in the U.S., who will now have to turn to Ingram Micro, Tech Data , Avnet (NYSE: AVT)or Arrow for IBM software (all of which have immediately started vying for that business).
The argument for IBM, of course, is whether it really needs five distributors, since it wants to “capture business with less capacity,” but there’s something odd about this whole situation that makes one wonder if there isn’t more to the story.
As IBM tightens up distribution and the number of reseller partners it’s dealing with, other vendors are turning to the channel to expand their business. Fujitsu, for example, was previously considered a direct player, but now it’s favouring the channel. The reason? It wants to reach out to small businesses and the mid-market with vertical solutions, and it’s turning to Synnex to do this.
Synnex became the first U.S. distributor for Fujitsu back in 2006, thanks to its successful relationship with the distie in Canada, where it made forays into the SMB market it wasn’t able to accomplish on its own. Synnex is now offering the complete range of Fujitsu hardware solutions, including LifeBook laptops and Eternus storage systems; Fujitsu’s tablet PCs are seen as a fit for medical, government, transportation and education markets.
Back in April, Fujitsu promoted Bill Buie, Symantec‘s former vice-president of global channel sales, to senior vice-president of alliances, channel and SI sales for Fujitsu America. At the beginning of this year, about 60 per cent of the company’s revenues were coming from direct sales. By the end of this year, the plan is for 60 per cent of revenues to come from the channel. And so far? Fujitsu has managed to increase its client base in the mid-market by 20 per cent. Not a bad start.
Synnex has also posted some uplifting financial prospects, so despite ending its relationship with IBM, the future still looks bright for Synnex.
