NEC Ramps Up Distribution

NEC Solutions America is looking to the channel as it tries to grab a larger piece of the U.S. market.

NEC Solutions America Inc. is looking to the channel as it tries to grab a larger piece of the U.S. market.

NEC, based in Rancho Cordova, Calif., last month announced a national distribution partnership with Team 1 Systems Inc. The Pittsburgh-based company will work with resellers to sell and support NEC products and services. This summer, NEC will announce a similar partnership with a larger distributor, said Larry Sheffield, executive vice president of the Solutions Platform Group for NEC.

By the end of the first half of the companys fiscal year—which started in April—NECs North American business will be 100 percent channel-driven, Sheffield said.

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"This is entirely new for us this year," Sheffield said of NECs decision to sign on distribution partners to help work with the channel.

The distribution model will help NEC in numerous ways, including reducing personnel costs as the company does away with its direct sales business, he said. In addition, the channel should help NEC with sales and support of its products and with integrating those products into customer environments.

Understanding customer requirements will improve "because we have people out there telling us what is needed," and the conflict between the channel and NECs sales force will be removed, giving partners more incentive to push NEC products, Sheffield said. Among its key products is a line of fault-tolerant servers and a growing family of systems based on Intel Corp. technology, in particular, the chip makers 64-bit Itanium 2 processor.

He said he hopes to use the channel partners to expand NECs U.S. product offerings, such as expanding into the VOIP (voice over IP) market.

NEC is one of a number of hardware vendors looking to alternative avenues for growing their businesses. Acer America Corp.—another major global company looking to grow its U.S. presence—two years ago kicked off an aggressive channel push, launching its Acer Authorized Reseller Program to encourage and reward resellers that sell Acer products—particularly notebooks, displays, desktops and servers. Officials with Acer America, in San Jose, Calif., said the number of resellers has grown from 1,200 in the beginning of 2004 to about 7,000 in March 2005.

FN Manufacturing LLC, a defense supplier in Columbia, S.C., has bought tablet PCs from Acer. Ed Benincasa, vice president of MIS at FN, said going through third parties can be beneficial.

"Since we are not a large company, working with resellers and integrators can sometimes provide us with better pricing, service and leverage than working direct with the manufacturer," said Benincasa, an eWEEK Corporate Partner. "This is not always the case, and it varies depending on the manufacturer and the type of product. We do not follow any fixed guidelines—a lot depends on the local account managers and their willingness to work with us."

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