Tech Data Canada has signed an exclusive partnership with Vancouver-based PC maker Seanix Technology Inc. in an attempt to better compete against direct seller Dell in Canada.
partnership will allow Tech Data’s reseller network to build and configure customized desktop systems online through Seanix’s Web-based configurator and ordering tool, which will also be accessible through Tech Data’s Web site. These built-to-order (BTO) systems will be available within 96 hours, the same time frame as Dell.
Rick Reid, president of Tech Data Canada, said that this partnership will not take a major chunk out of Dell’s market share in Canada.
“”Our resellers are frustrated,”” Reid said. “”They have been losing a lot of business to companies like Dell. They know on a large RFP or medium-sized RFP they can’t compete. Oftentimes the major manufacturers will bid those direct or hand-pick a reseller to go after that business and other resellers will not have an opportunity to bid.””
For Seanix, providing product to Tech Data resellers will open up a whole new market. According to Seanix president Paul Girard, he hopes this deal will increase the number of PC Seanix builds from 110,000 to 160,000 this year. With that Girard hopes to decrease the company’s manufacturing costs with suppliers such as Microsoft.
“”It is all about volume for us. If we can grow our business and increase our business, our costs go down. We get better pricing from the vendors on components. We are in the volume business. In desktop PCs you need volume. For us that is the opportunity,”” Girard said.
Frank Abate, president of Mississauga, Ont.-based reseller Infinity Technologies, said the Tech Data/Seanix partnership makes perfect sense.
“”Tech Data, Ingram, Synnex — all of them are getting killed in the under-$2,000 PC market place,”” he said. “”The average reseller, unless they have a great relationship with their customers, cannot compete with IBM, HP and Dell with the direct model.””
Abate is also bullish on the Seanix product line, which he called “”a solid tier two”” brand. He said Seanix is part of many federal government-purchasing programs as well.
He agreed with Reid that Seanix is an alternative brand to the tier ones, which can be to the advantage of the reseller. “”With an alternative machine like Seanix or another white box you can add Linux to it instead of a Windows operating system. Tier one branded systems have to have a Windows OS. About 10 per cent of the cost of that system is the bundled Microsoft operating system,”” Abate said.
Abate added that there is another opportunity in the upgrade market for resellers where customers who have a license would only require the box.
“”They do not need to purchase an extra OS that they inevitably have to trash,”” Abate said.
Seanix will be providing six models in its Intel-based TCO product line, which is targeted to small business. These systems are bilingual and range in price between $500 to $2,000.
Currently this deal only includes desktops, but Reid did say the Seanix arrangement would eventually include notebooks.
“”This will not be replacement products (for top tier brand names),”” Reid said. “”Resellers will not be excited if it was just one existing revenue stream being replaced by another. No one wants that. We want this to be incremental. It is an alternative product to hit an alternative market with. Smart resellers will look at this an see there will be other opportunities to visit other markets such as the education market place, which has never been a great spot for IBM or HP. Now (with Seanix) there will be a product set that they can take into those RFP opportunities and bid successfully with.””
Seanix product will have no discounts or back end rebates.
The Seanix BTO offering will be marketed to a subset of Tech Data’s VAR network with cross-country tours, Web-enabled promotions and through the distributor’s internal Tech Times publication. Tech Data’s outside sales force throughout Canada will also be training to promote the Seanix offering to local resellers. For Seanix, the company’s inside sales team will provide marketing support to Tech Data.
“”There will be new VARs that we will be bringing to the table because of this deal,”” Reid said. “”There are VARs that we have not dealt with in the past that might have had a different brand of product that they were selling.””