Cisco to beef up MEA distribution line-up

Cisco will this week name two new authorised distribution partners in Africa as it looks to extend its coverage of the continent and establish the right level of resources to meet growing demand for its networking products.

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By  Andrew Seymour Published  October 16, 2006

Cisco will this week name two new authorised distribution partners in Africa as it looks to extend its coverage of the continent and establish the right level of resources to meet growing demand for its networking products. The US-based vendor currently works with several large wholesalers throughout Africa, but believes the expansion of its distribution tier will ensure that adequate levels of inventory are available in fast-growing local markets. Although the identity of the new allies has not been made public, Channel Middle East understands that the pair, based in Ghana and Nigeria, will be able to offer an intimate understanding of local reseller markets that Cisco is keen to exploit. As well as raising its profile in Africa, Cisco hopes the signings will help to reduce the volume of grey activity that arises when resellers buy product from illegitimate sources because they don’t know where else to purchase it. Guido Romagnoli, channel director MEA at Cisco, explained: “Local inventory is one of the most challenging issues in Africa because there is not always the availability of inventory. You can imagine how difficult it is to start channels out there. When [resellers] can’t focus on a legitimate Cisco distributor that’s when grey starts to happen. The market in MEA is generally growing by 60%, but it is very difficult to find distribution partners that can scale at the same speed as the market,” he added. At the same time, the appointments are designed to ensure that local resellers can plug into the technical and product knowledge that they need to deliver Cisco solutions. “They are hungry for training, education and information,” said Romagnoli. “The distributor is key in delivering the knowledge into this market for Cisco. The logistics side is one element, but the training issue is just as important in solving some of the challenges we face.” In most parts of the world, Cisco operates a blended distribution model that divides wholesalers into two camps: Cisco Distribution Partners (CDPs), specialising in logistics efficiency, and Cisco Authorised Distributors (CADs), which are heavily focused on channel development and reseller relationships. However, the compatibility of such a strategy within emerging markets has always been an issue for Cisco and it ditched the model in this region earlier this year. Speaking to Channel Middle East in the summer, Milo Schacher, senior director commercial business, global emerging markets at Cisco, confirmed: “In the past we did have the CDP-CAD model, which was basically a two-tier approach to distribution. We migrated out of that model at the beginning of the financial year for the Middle East and all distributors can now purchase directly from Cisco under the conditions that we have agreed with them. However, if they see some value in buying from another distributor they can also do that but without price support from our side. We think that this model fits best with our strategy and it has also reduced the complexity associated with managing the previous two-tier model.” Cisco breaks its African business into three distinct sectors, covering the west, central and emerging region north of South Africa, and deploys the services of several distributors. This includes Azlan, the enterprise arm of Tech Data – which uses its European operations to serve parts of French-speaking Africa – and Jet Distribution, a UK-based, HP-focused outfit that boasts offices in Botswana, Namibia and Nigeria. It also works with France-headquartered SouthComp Polaris, which serves much of North Africa, and Sparnoon-Dynatech, another UK-based firm with stocking points in Kenya, Nigeria, Tanzania and Uganda. The new signings, which come as Cisco admits it is conducting a review of its distribution set-up in MEA, will officially be unveiled to more than 150 resellers at its annual conference for African partners later this week. The summit, in Mombasa, Kenya, will also be an opportunity for partners to get a local spin on the themes announced at Cisco’s worldwide shindig held in San Diego earlier this year.

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