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Sun 10 Feb 2008 11:26 AM

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Going spare

I can't say for definite, but I'd suspect there can be few things quite as irritating for the manager of an IT department than learning that the spare part you desperately require to restore your infrastructure to full working order is another ten days in waiting.

I can't say for definite, but I'd suspect there can be few things quite as irritating for the manager of an IT department than learning that the spare part you desperately require to restore your infrastructure to full working order is another ten days in waiting. I'm sure there are countless resellers out there that could reel off stories of frustrated CIOs waving their arms in the air and chastising manufacturer X for their local spare parts management policy.

Make no mistake about it, vendors that aren't paying adequate attention to their strategy for handling spare parts and replacing defective products will be forced to change their tune as the market continues to evolve.

At the moment, there are still glaring differences between vendors when it comes to the general manner in which this topic is approached. Some visibly regard it as a priority, others less so. Those in the latter camp are more likely to consider it as a back office function that can be handled just as efficiently by their operations in Europe, negating any need for local controls.

Either way, the general consensus is that Middle East customers simply don't enjoy the same standard of service as more developed markets when it comes to spare parts and returns.

Confirmation this week that Sun Microsystems has outsourced its after-sales logistics - including management of spare-and-repair activities - to DHL is particularly noteworthy in light of this perception. The move effectively means that DHL hubs around the Gulf will now hold spare parts supplied from Sun's European warehouse, allowing them to deliver to a customer within just four hours of receiving an order - news that will be warmly welcomed by end-users and channel partners that have long been craving this kind of urgency.

Sun took the decision to go down this route last year even though specifics of the agreement have only just emerged - but it is not alone. I also believe that a number of other leading vendors such as EMC, IBM and HDS have similar arrangements in place, and the word is that more manufacturers are coming round to the idea of tying up with 3PLs for this purpose.

Let's face it, the relationship between the IT industry and 3PLs is already in place when it comes to activities like local delivery, stock management, breaking bulk and kitting services so it is not as though unfamiliarity presents a barrier.

In DHL's case, it is promising to stock the spare parts for products that vendors sell in the Middle East, as well as host the engineering resources that are needed when a product can be repaired rather than replaced.

Does it mean that this will compete with the repair and maintenance services that the reseller channel offers? Not necessarily, although at the same time it is not entirely clear how vendors plan to manage this conflict if it does arise. For instance, if an enterprise customer directs its repair request to the vendor, does the vendor refer that business to a distribution or reseller partner, or to the 3PL?

According to one source - admittedly from within the logistics industry - 3PLs are increasingly likely to get the nod when such an occasion prevails: "There are some distributors which say they can get highly-qualified people from the sub-continent to repair laptops, motherboards or whatever, and it will cost half the price that we would quote. That's fine because they clearly have a competitive advantage and we can't compete there. But there are some of the big manufacturers that won't go with the well-known IT distributors because they simply don't feel that they have enough critical mass in terms of brand name, quality and everything that goes with this business."

Regardless of how this scenario plays out, it looks likely that Sun won't be the only vendor to revise its strategy for managing its spare parts logistics business in the Middle East this year.

With some 3PLs aggressively targeting the IT sector and competitive pressure on vendors to take a local view of spare parts management, an area that has often been neglected by suppliers in the Middle East is beginning to receive the attention it deserves.

Networking natter

It seems there has been plenty to talk about in the Middle East networking channel of late, especially over at Juniper Networks, where sources claim the company is closely scrutinising its distribution structure in the region.

To its credit, the vendor has built a strong operation in the Middle East during the past five years, and outside the top three or four global IT heavyweights it's been one of the firms to have genuinely succeeded in constructing a solid channel presence.

But could a shake-up be in store?

The ethernet specialist's Middle East ship is currently sailing without the steady hand of a permanent skipper following the recent shock departure of long-standing regional chief Mohamad Abdul Malak. He left his position to the surprise of many in the channel last month, and is shortly set to assume a new role within the regional operation of another player in the networking and telecommunications sector.

It appears the changes won't stop there, with speculation in the channel that Juniper could be ready to ruffle up its distribution line-up - possibly by dropping or replacing one of its second-tier partners.

Juniper has certainly made it clear that it won't be afraid to step in if the situation necessitates. On his last visit to the region, EMEA VP Gert-Jan Schenk warned distributors Almasa, Comguard, Mindware and Online that they shouldn't take their positions for granted. "We are currently assessing whether the distributors that we work with today will also be the ones that we have in one or two years' time," he said. "We are looking at if they will be able to finance and grow with us as a company."

Ominous words indeed, and ones that could prove particularly telling over the coming months.

Meanwhile, former Juniper chief Abdul Malak isn't the only face from the networking channel to be heading for new pastures. DK Roy, Almasa's director of value products, is set to call time on his tenure with the distributor at the end of this week. It's thought that he's heading off to start up his own venture rather than transferring to a competitor or vendor.

Change is also in the air at Cisco following news that Middle East and Africa VP Mark De Simone is preparing to step down from his role later this year. "Paul Mountford, president of ‘Emerging Markets' and his leadership team will be appointing a successor shortly," revealed Cisco in a statement issued to Channel Middle East. "At this stage the new VP is yet to be announced."

While De Simone gets ready to leave, one man striving to make an impression on the networking sector is Sunil Dandawate, former managing director of Kobian Distribution and a familiar face on the Dubai channel circuit.

Following a protracted break from the industry since leaving Kobian at the end of 2006, he's secured a trading licence to launch his own company Power Networks, which will soon begin supplying UPS equipment, networking gear and solar powered products under the same brand.

Dandawate, who is financing the venture out of his own pocket, is currently in the process of identifying prospective channel partners to carry the products, which he claims are targeted at the under-served "niche" between low-end hardware and premium branded products.

It's not too late...

Do you believe you've served your customers with distinction during the last year? Have you grown your business and demonstrated innovation in your market sector? Can you reel off a long list of company achievements and success stories?

If the answer to any of the above questions is ‘yes' then you should be entering the inaugural Channel Middle East Awards! However, you'd better get a move on as the nomination process is only open until the end of this week - Thursday 14th February.

Submitting your nomination for the awards - which aim to recognise excellence at vendor, distribution, reseller and retailer level in the Middle East - is extremely straightforward. Just download a nomination form and follow our guide to the information you need to include in your entry by visiting our dedicated awards website at the following address: www.itp.net/events/channelmeawards

Alternatively, if you have any questions about the nomination process then please just pick up the phone and give me a call on +971 4 391 0889 or e-mail andrew.seymour@itp.com

But hurry...there are just five more days left!

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