Tech Data moves to ETC
Tech Data to acquire some SDG distribution companies
Under the terms of the agreement, Tech Data would acquire SDG and its IQ Sys and ISI Distribution BU in the United Kingdom, broadliner ETC and IBM VAD Best'Ware in France and broadliner ETC in the Netherlands.
Officially, the acquisition of these companies strengthens Tech Data's enterprise business, Azlan, as well as its broadline offerings in Europe, expanding its vendor and customer portfolios, and leveraging its pan-European infrastructure. The acquisition is expected to add a team of more than 600 experienced individuals with domain knowledge in specific product, customer and operational disciplines. Practically although, given Tech Data records in acquisitions, this result may not be achieved. In France, ETC and Best'ware offices are situated west of Paris, while Tech Data is headquartered in the east of Paris. Tech Data encountered the same problem with the acquisition of VAD Azlan : almost no Azlan employees did the move from west suburb to Tech Data's offices. The broadliner thus gained an expanded linecard, but had to fully rebuild its Value team, back in 2004. Another difficulty for France : ETC and Best'Ware share their warehouses with SCC (fortunately, not far from Tech Data) : how will this be dealt ? It remains to be seen. In the United Kingdom, we have quite the same problems: ETC is based in Birmingham with three regional offices, while Computer 2000 is based in Basingstoke, in the southern part of the country: again, potential problems may arise, depending on how Tech Data plans to deal practically and locally with the acquisition. Finally, in the Netherlands, ETC is approximately 35 km apart from Tech Data, which should thus not be a problem. Of course, there would be no problem (except for redundant tasks like finance or human resources) if Tech Data chooses not to merge the different headquarters with its own offices. The distributor aims to reassure resellers, officially saying that it learned from its past mistakes, and will do its best to keep SDG's human resources…
Also, one must not underestimate the difficulty to merge the ERP of both companies, which may lead to some lost business. Finally, some resellers may also not agree with losing their credit line at SDG. Thus, the acquisition will be far to be easy…
No mention has been done about SDG businesses in Algeria, Mauritius, Morocco (VAD B'ware and broadliner SDG) and the United Arab Emirates. These companies are quite young and small, and may be closed altogether, although we are still waiting for an answer about this from SDG or Tech Data.
For their fiscal year ended March 31, 2012, the companies to be acquired generated third-party sales of approximately €1.4B, across a broad portfolio of data center, software and broadline products from industry-leading suppliers. The product mix was comprised as follows: approximately 40% data center products (including servers, storage and networking), approximately 20% software (predominantly data center-focused such as virtualization and security) and 40% broadline products (including PCs and peripherals). The terms of the agreement also call for a supplier agreement, whereby SCH will have annual purchase commitments through Tech Data for a period of five years which the company estimates will add incremental annual sales of €400m. Total consideration payable under the terms of the agreement is estimated to be €277m, subject to customary adjustments, which includes a purchase premium of approximately €170m.
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SDG gets into services
To support this initiative, the distributor has built a small team, managed by Daniel Cartter and based in UK, whose job is to detect the best practices of each company of the group, adapt and market them for a use in all countries where the distributor is concerned, with an aim to answer more efficiently to the needs of its local resellers. The EMEA marketing team leverages its work with a newly launched pan-European SDG Business Solution Centre (BSC). Initially based in Birmingham and Langley (United Kingdom) and backed with a multi-million euro investment, the Solution Centre has been duplicated in Lieusaint (France) and Bodegraven (the Netherlands), with a remote access from Dubai and Casablanca. The pan-European facility provides a fully virtualised, converged, multi-vendor environment. Technical pre-sales specialist resource enables reseller partners to build the right solution, both technically and commercially to answer their end user opportunities. The Business Solution Centre is designed specifically to demonstrate, educate and assess the latest infrastructure hardware and software solutions from leading technology vendors, including Citrix, HP, Huawei, IBM, Intel, Symantec, Veeam and VMware.
SDG's first international services are Sales Acceleration Services. The goal of these services is to help resellers earn more money at each level of the sales process (leads, pre-sale, financing, after-sale, support, etc.). They include, assembled from best practices from several countries:
The second international service, which has been launched a few weeks ago, is SDG Cloudware, again built on local best practices. SDG Cloudware is a suite of tools, services and solutions designed to enable SDG's channel partners to deliver Cloud services. It consists of the following services:
All these services should allow resellers to grow in skills and efficiency, and get an access to resources they do not have internally: "what do you need marketing funds for, if you have no marketing team?" explains to ITdistri Paul Eccleston, Managing Director EMEA for SDG. Of course, there were previously equivalent services for each country, but they were more or less complete. Each country, starting with France, has now an access to a complete, fully marketed services offer, made by a European distributor for European resellers. According to Paul Eccleston, SDG's services are more comprehensive than its competitors', better packaged and better sold, as local teams are being recruited and trained to push them to resellers. Globally, SDG plans to have a 40 people dedicated team for its services, to which may be added the 200-people strong support team. New elements in the existing services or even new services should be launched in the coming months and years, while Paul Eccleston did not unveil any further specific plans.
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