Tech Data-3Com deal dies

Regional distribution giant Tech Data has ended its distribution contract with 3Com, claiming that the move was made as part of Tech Data’s regular review of vendor contracts.

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By  Stuart Wilson Published  July 31, 2006

Regional distribution giant Tech Data has ended its distribution contract with networking vendor 3Com, claiming that the move was made as part of Tech Data’s regular review of vendor contracts. Tech Data has distributed 3Com kit in the Middle East since 1999. The existing contract will expire on August 16th 2006. “Compliance and transparency have always been part of Tech Data’s ethos,” said Adnan Al Falah, managing director at Tech Data Middle East. “Our partnerships with vendors evolve over time, and as and when we sense a disconnect in the expectations it’s a signal for us to realign. We’ve enjoyed a long relationship with 3Com and believe they will continue to remain a strong force in the networking arena.” Amanulla Khan, regional channel manager at 3Com, commented: “For any distributor working with 3Com it is important that they find the right balance between the SMB and enterprise business. The problem we had with Tech Data is that they were very strong on the SMB side but did not have sufficient resources in the enterprise space.” “We did have discussions with them and put proposals on the table looking at the potential for investment in the enterprise business through Azlan, Tech Data’s value-added distribution arm, but nothing came of it. Tech Data was not really a big player for 3Com,” he added. For Al Falah, the decision to drop 3Com was an obvious one: "It all comes down to the predictability and the type of business that was conducted. With 3Com and the way deals are done and territories are assigned, it was difficult for us to grow our business. It was not a level playing field and we did not want to be seen as a fourth or fifth level distributor. The Tech Data brand is more important." According to Khan, Tech Data accounted for just 5% of 3Com’s sales through authorised distributors in the region and the vendor had been looking to consolidate its distribution channel. With regional distribution partners such as Aptec and OnLine on board as well as in-country partners such as Redington in Saudi Arabia, 3Com believes it is well positioned to deal with any channel issues resulting from the termination of its agreement with Tech Data. Tech Data is also in the process of ending its distribution agreement with UPS and peripherals vendor Tripp Lite. Vipin Sharma, VP EEMEA at Tripp Lite, commented: “We are in the process of ending the agreement now. It was a mutual decision and we already have partners in place to take over Tech Data’s role. Everything is cool and we continue to have a good relationship with Tech Data in other territories. We’re all still good friends.”

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