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Cisco Dominates Distribution Chatter

During a sit down with eight leading distributors in Manhattan earlier today, The VAR Guy discussed a range of topics -- the improving economic picture, international expansion, cloud computing, mobile opportunities and more. But during several of the sit downs it became clear that there was an elephant in the room. The elephant's name: Cisco Systems. Here's the scoop.

The VAR Guy

May 5, 2010

5 Min Read
Cisco Dominates Distribution Chatter

Cisco Systems Elephant In the Room

During a sit down with eight leading distributors in Manhattan earlier today, The VAR Guy discussed a range of topics — the improving economic picture, international expansion, cloud computing, mobile opportunities and more. But during several of the sit downs it became clear that there was an elephant in the room. The elephant’s name: Cisco Systems. Here’s the scoop.

First, a little background: The Global Technology Distribution Council (GTDC) is hosting meetings May 4 and May 5 in Manhattan. Somehow, The VAR Guy scored an invite to the party (or perhaps he crashed it…).

During the GTDC gathering today, our resident blogger engaged in eight speed-date meetings, each of which lasted 15 minutes. Below is a recap of each meeting. Look closely, and you’ll notice Cisco’s name popping up multiple times — perhaps a clear indication that Cisco’s Unified Computing System (UCS) could be a serious challenger in next-generation data centers.

A Closer Look

Now, onto the meeting recaps…

1. 20:20mobile CEO Meinie Oldersma: This European distributor is owned by a private equity firm, and focuses mainly on mobile solutions — particularly smart phones. Oldersma says the company is growing about 15 percent annually, and needs to maintain or accelerate that growth. A case in point: During the first quarter of 2010, 20:20mobile saw its revenues grow roughly 34 percent, Oldersma said.

2. Avnet Chairman and CEO Roy A. Vallee: Before sitting down with Vallee, The VAR Guy got an update on Avnet’s relationship with Oracle and Sun Microsystems. Then, Vallee described how the economic recovery seemed to be accelerating — as Avnet has delivered double-digit revenue growth each of the last two quarters. Vallee conceded that Avnet was late to the unified communications game. But a recent relationship with Cisco positions Avnet nicely for the unified computing trend, he added. “A successful engagement with Cisco is high on our agenda for 2010,” he said.

3. Ingram Micro CEO Greg Spierkel: This is the second time in recent weeks that The VAR Guy has sat down with Spierkel. Rewind to April 2010, and Spierkel said he believed the economic recovery was real. Fast forward to today’s meeting, and Spierkel described a “very positive” mood among VARs and MSPs attending the recent Cisco Partner Summit and HP Americas Partner Conference. “I’m pleasantly surprised to say I think the economic comeback is stronger than people expected,” he added.

Without mentioning Cisco Systems by name, Spierkel said the networking sector delivered stronger performance than Ingram’s overall growth rates during the distributor’s most recent quarter.

4. Magirus President and CEO Fabian von Kuenheim: As one of Europe’s leading distributors, Magirus focuses mainly on emerging technology opportunities rather than mature markets. A case in point: Kuenheim says Magirus dominates 30 percent of VMware’s distribution in Europe. Next up, Magirus is focusing on Cisco-centric opportunities. “Cisco is sexy,” said Kuenheim. “They are very focused on their VMware and EMC relationship. It’s a natural fit for us. And Cisco does business differently; they are flexibly and creative,” and Cisco is “more responsive” than traditional server vendors, Kuenheim added.

“We find that Cisco’s top management is very partner-centric,” said Kuenheim. “We see significant demand for UCS and VBlock.”

5. SIS Technologies CEO Kia Hong Lim: Welcome to the mobile distribution market in Asia. SIS Technologies is a publicly held company listed on the Hong Kong Exchange. SIS focuses on smart phone distribution, involving devices from HP, Acer, Asus, Palm and several other vendors. He noted that SIS didn’t see a deep economic slump because Asia’s consumers kept on buying during the economic downturn. Since consumers have strong saving habits in Asia, they were able to keep on spending during the weak economy, he added.

SIS remains 75% family owned, Lim mentioned, and the company plans to maintain its focus on Asia. The more Lim spoke, the more The VAR Guy wondered if SIS Technologies would make an ideal takeover target for U.S.-based distributors. With a smile, Lim said he couldn’t rule out such a possibility.

6. Synnex President and CEO Kevin Murai: Talk about an executive who’s in touch with managed services trends. Murai described how Synnex is working with IT Control Solutions to help Synnex work more closely with managed services providers. More details are now posted The VAR Guy’s sister site, MSPmentor.

7. Tech Data CEO Robert M. Dutkowsky: Give Dutkowsky credit. The Tech Data CEO downplayed cloud hype, and preferred to focus on a so-called ProSumer (Professional Consumer) strategy. The way Dutkowsky sees it, mobile consumer devices, smart phones, digital signage, and even large-screen TV sets are increasingly IP computing devices. Tech Data intends to be the leading distributor of those devices, and all the back-end connectivity they require. Dutkowsky mentioned that Tech Data is a strategic distributor of Scientific Atlanta — the set-top boxes designed by Cisco Systems (there’s that networking company again…). Dutkowsky says Tech Data has its toe in the water with SaaS and cloud opportunities, but he views the ProSumer trend playing to Tech Data’s strengths.

8. Westcon President and CEO Dean Douglas: Weston’s Douglas — plus Chairman Tom Dolan and CFO John P. O’Malley — described how Westcon’s Comstor team is pursuing market opportunities with Cisco. One recent deal involves a “multi-million-dollar” engagement for Cisco’s B Series Blade Servers in Brazil. The engagement specifically involves a large, government-owned utility. Westcon also plans to unveil so-called Leap centers, where partners can come in and test Cisco-centric data center and networking solutions that also involve VMware, Citrix, NetApp and EMC components.

Stay tuned. The VAR Guy may have more thoughts to share based on today’s speed dating interviews. But for now, it’s time for our resident blogger to unplug a bit.

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