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Tue 20 Feb 2001 04:00 AM

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Network Associates repairs distribution chaos

Network Associates restructures and the new model sees success measured on sales to customers, and not sales into already overstuffed distribution channel.

Network Associates (NAI), has undergone a major restructuring to repair the damage done by its end-2000 sales collapse. The new model adopted by the company will see success measured by sales out of the channel, rather than sales into distribution, as has previously been the case.

“You don’t really know how much of a marketshare you have until your products are out there, not just being stuck in a distribution warehouse. That caused a big problem,” said Thomas Mina, product manager for Network Associates in the Middle East.

“Now what is going to happen is a lot of the distributors are going to focus on moving the stuff they have in stock right now, and selling it out. We are assisting with that,” Mina said.

The ineffective sales strategy which NAI previously employed was the result of its historical direct-sales approach, said Mina.

“Two things were behind that notion. If you take a look at NAI in the past, we never had this two-tiered distribution model. 70% of our business was purely direct sales. Then they did the acquisition of [Dr. Solomons] and some of the other companies, and they were into two-tiered models. So what we did was, about a year and a half ago, changed the model, and everything we did was going to go through distributuion, to partners, to end users. They changed the model, but didn't understand how the model worked. They were treating the distributors as end users, but that isn't a two-tiered model,” said Mina.

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