Cisco drops distributors

Cisco has dropped OnLine Distribution and Mindware as distribution partners in the Middle East. Andrew Elder, Cisco’s director of channels and marketing, Russia, Middle East and Africa, will announce the appointment of a new GCC distributor on March 21st.

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By  Stuart Wilson Published  March 18, 2004

Both OnLine Distribution and Mindware have had their distribution agreements with Cisco cancelled. Andrew Elder, director of channels and marketing, Russia, Middle East and Africa at the networking giant will announce the appointment of a new GCC distributor on March 21st. Cisco issued the following statement to Channel Middle East confirming the channel changes: “In early 2004, Cisco discontinued its relationships with OnLine Distribution and Mindware in the Middle East.” The precise reasons behind Cisco’s distribution shake-up remain cloaked in secrecy. “As a matter of policy, we do not comment on the specific business details of our channel partner relationships,” is the official corporate line coming out of Cisco. OnLine Distribution issued the following curt statement: “OnLine Distribution is no longer representing Cisco.” OnLine Distribution is part of Westcon Africa Middle East (WAME) – a consortium of companies owned by South African networking and IT services group Datatec. Westcon Group, a global networking distributor renowned for its close relationship with Cisco, is also part of the Datatec group. With OnLine Distribution no longer holding Middle East distribution rights, the region represents a gap in Datatec’s international Cisco distribution coverage through its various subsidiaries. Westcon Group, which still holds Cisco distribution rights in the regions it covers, recently filed its S1 registration document ahead of a planned IPO in the US — a document in which it explicitly spelt out the true value of relationships with major networking vendors for distributors in this field: “Because we depend on a limited number of principal vendors, especially Cisco, for the products we sell, the loss of, or a material adverse change to, our relationship with any of them would seriously harm our business, financial condition, results of operations and cash flows.” Again it is important to stress that Westcon Group still has distribution agreements with Cisco in place. Given OnLine Distribution’s links to Datatec, Cisco must have had compelling reasons for dropping them as a distribution partner in the Middle East. Competitors estimate that the two distributors ‘discontinued’ were pushing close to US$60m of Cisco kit per annum in the region. This is a strong statement of intent by Cisco to the Middle East channel, showing it is prepared to chop and change partners if it believes it is advantageous to do so.

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