Arcserve Dumps Synnex, Tech Data, To Work Exclusively With Ingram Micro

Arcserve has dropped Synnex and Tech Data from its distribution lineup, opting to sell its data-protection software solely through $46.5 billion giant Ingram Micro.

An Ingram Micro spokesperson told CRN via email that as of Wednesday, solution providers in the United States and Canada could no longer initiate the purchase of Arcserve products through Synnex or Tech Data. In-progress Arcserve transactions sourced through Synnex or Tech Data must be completed by May 29, the spokesperson said.

Arcserve CEO Mike Crest said the company had been diluting its value by working with multiple distribution partners and wanted to sharpen operational aspects of the business to drive greater velocity and relevance.

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"We knew there could be a better model for everyone in the ecosystem," Crest told CRN.

After being sold by CA Technologies to private equity company Marlin Equity Partners in early August, Arcserve put together a formal process for selecting an exclusive distribution partner. Crest said both new and existing distribution partners expressed interest, with companies evaluated on their reach, the technical modernization of their distribution process, and their ability to enhance margins for partners.

"Ingram brought that level of scale," Crest said.

Crest declined to break out exactly how much business Arcserve has done through each distributor, but said Ingram Micro was one of the company's top two distributors in North America. In terms of total revenue, Synnex and Tech Data are the largest broadline distributors behind Ingram Micro.

As it is, the majority of solution providers who had been sourcing Arcserve through Synnex or Tech Data already have relationships with Ingram Micro around other vendors, according to Scott Zahl, Ingram Micro's vice president of Advanced Solutions. Arcserve has worked one on one with the few solution providers that had no previous relationship with Ingram Micro to assist with the transition, Crest said.

Productive Corp. of Minneapolis had been sourcing its Arcserve products through Tech Data, and has nearly finished transitioning its portfolio over to Ingram, said company president and CEO Todd O'Bert. The solution provider has moved members of its Tech Data team for Arcserve over to a different vendor, O'Bert said, and already does extensive business with Ingram Micro around other vendors.

"The people from Arcserve will make sure it goes smoothly, and Ingram's solid, so we should be fine," O'Bert said.

Working with just a single distribution partner will allow Arcserve to concentrate its resources and develop more sales and technical expertise at the distribution level, Crest said. Partners can expect to see more robust programs, better insight into end-user customers and better channel programs for the services provided by Arcserve, according to Crest.

Arcserve wasn't looking to save money or reduce its channel investment by working with one just distributor, Crest said; the vendor has rather been focusing on becoming smarter with its existing channel investments.
Arcserve sells its Unified Data Protection and recovery software offerings exclusively through the channel, Crest said.

The change should allow Arcserve to leverage economies of scale by having all of its business run through a single desk, O'Bert said.

"I would guess that this will be fairly smooth and provide some benefits to the reseller," O'Bert said.

Ingram Micro has added new transactional, technical and business development staff to its Arcserve team to manage the additional partners and drive more Arcserve product sales, according to the Ingram Micro spokesperson. Ingram Micro also collaborated with Arcserve to ensure that solution providers new to the distributor have an account with Ingram Micro and are assigned to a dedicated sales team.

With these additional resources, Ingram Micro plans to leverage and expand its Business Intelligence Center to offer solution providers more marketing, lead-generation opportunities around Arcserve, Zahl said. Ingram Micro will also offer special pricing for Arcserve specific and multivendor solutions, as well as standardized product quoting, ordering and fulfilling through a dedicated Arcserve Licensing Desk.

"The relationship now is unique," Zahl said. "That exclusivity provides a level of communication and data sharing that's unique in the marketplace."

O'Bert and Ken Fletcher, CEO of New York-based Quarterhorse Technology, said they have over the years seen vendors consolidate their distribution lists to create efficiencies in the sales chain, but neither could recall an instance in which a vendor went from using several distributors to just one.

"It's not usual that I've seen this," said Fletcher, who sources Arcserve through Ingram Micro. He said he hopes to get a better understanding of Arcserve's thought process behind the decision.

Smaller shifts are more common, according to partners, such as when EMC went in January from using four distributors in North America to just three. Ingram Micro was the loser in that sweepstakes as EMC opted to continue its relationships with Arrow, Avnet and Tech Data.

Synnex CEO Kevin Murai told CRN that he doesn't at this point see a trend of vendors consolidating their distribution partner lists, but isn't at all worried should that become a more regular occurrence.

"When there is a consolidation of partners, Synnex is typically the beneficiary … because of the penetration and the strength we have in a number of different markets, like SMB, like public sector," Murai said.

Synnex has an edge over every other distributor, Murai said, since it's the only one that does everything from broadline products to enterprise. Synnex and Tech Data were unable to respond in time to specific questions about Arcserve's decision to stop using them for distribution.

Fletcher, who is a member of Ingram Micro's VentureTech Network, said he's glad Arcserve adopted its single-source distribution strategy with Ingram Micro rather than a specialty distributor with limited reach or ability to add value.

"Having too many distributors is sometimes an issue," Fletcher said. "Ingram is still the 800-pound gorilla in that world."

PUBLISHED APRIL 2, 2015