Lockie backs Eiselt to resolve Tech Data turmoil

Steve Lockie, managing director UK, Ireland and Middle East at Tech Data, has backed new Middle East boss Hanspeter Eiselt’s ability to resolve operational issues relating to staff retention, the development of value-added arm Azlan and recent changes to the distribution giant’s vendor portfolio.

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By  Stuart Wilson Published  August 15, 2006

Steve Lockie, managing director UK, Ireland and Middle East at Tech Data, has backed new Middle East boss Hanspeter Eiselt’s ability to resolve operational issues relating to staff retention, the development of value-added arm Azlan and recent changes to the distribution giant’s vendor portfolio. Adnan Al Falah’s recent decision to step down as managing director for the Middle East operation came after a turbulent few months for Tech Data, during which the company ended a number of distribution agreements, experienced an unusually high staff attrition rate and faced the financial impact of the recent Dubai-based channel credit crisis. “I think that with Tech Data and the way we operate, it was important to appoint someone that understands the company more than necessarily having local market knowledge,” said Lockie. “Hanspeter Eiselt has the qualities that we were looking for in someone to take on the role.” “One of the risks in the run-up to any changeover such as this was uncertainty in the local market. I have been aware of what is happening every step of the way and Adnan [Al Falah] will work closely with Hanspeter [Eiselt] to ensure that there is a smooth changeover,” he added. Tech Data’s Middle East product portfolio has reduced in recent months as distribution agreements with Palm, Trend Micro, Symantec, 3Com and TrippLite have all ended. In some cases, Tech Data claimed that this was a mutual decision reached with the vendor, while in other cases vendors have cited a discord in expectations, and dissatisfaction with Tech Data’s ability to grow channel sales in target product areas and geographies. Several contract terminations — including TrippLite — have been linked to vendors poaching staff from Tech Data. Earlier this year, Tech Data signed a distribution agreement with Lexmark, which is now also in doubt after members of Tech Data’s regional team defected to the printing giant. A product manager at Tech Data Middle East explained that the company still had some Lexmark stock to clear but that the contract had now been terminated. However, Lexmark’s strong global relationship with Tech Data coupled with the recent changes to the distributor’s Middle East management team means that there is still potential for this particular contract to be resurrected. Lockie referred all questions on the distribution agreement with Lexmark in the Middle East to the local management team. Despite requests for clarification on the current status of the contract, both Lexmark's and Tech Data's Middle East operations have so far failed to respond. “Staff turnover in the Middle East is more of a local management challenge,” explained Lockie. “It is something that we are acutely aware of and do track as a key performance indicator. It is a very competitive employment market at the moment and distributors are fertile ground for vendors to recruit from.” Lockie also played down Tech Data Middle East’s exposure to the recent credit crisis, pointing out that the distributor has an EMEA-wide credit insurance policy. “We were pretty open in saying that we took some pain during the credit crisis, but we do insure our debt exposure in its entirety,” he explained. “Tech Data remains totally committed to the Middle East market. The growth rate for Tech Data in EMEA in the second quarter was low but within that the Middle East was the bright spot in terms of growth.” Eiselt’s experience at Azlan in Europe is also viewed as a positive attribute as Tech Data attempts to accelerate the development of this side of its business in the Middle East. Rival distributors such as Logicom have stolen a march on Tech Data in terms of the development of their distribution set-up for key product lines such as Cisco in the Middle East. Logicom — after clear encouragement from Cisco — is currently in the process of setting up a dedicated operation within Saudi Arabia while Tech Data continues to serve the Kingdom from remote locations and still has no concrete plans to establish a significant in-country presence. “Hanspeter [Eiselt] has come in from Azlan so has strong experience in value-added distribution,” said Lockie. “We already have sales managers in Saudi Arabia and can provide rapid delivery and support for customers in the Kingdom. Cisco remains a valued vendor for Tech Data in the Middle East.” “I think you just have to look at the investments that Tech Data has already made in the Middle East to see our commitment to the region. We can make money from commodity distribution but at the same time we need to balance that with VAR business and that is why we have Azlan as well,” he concluded. Despite its recent problems, Tech Data remains one of the most respected distributors in the Middle East IT channel with sales in the region hitting US$360m in full year 2005. According to Lockie, Eiselt is the right man to get the distribution giant back on track in the Middle East.

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