Linksys cranks up in Aust

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Linksys has launched its first post-Cisco acquisition channel program and would look to shore up agreements with the big retailers in an attempt to mirror its number one position in the North American retail channel.

On a whirlwind Asia-Pacific tour, Linksys co-founder, Janie Tsao was in Sydney on Thursday, to introduce a new partner program targeted at the SOHO and small business reseller channel and new range of business products not previously available in Australia.

VARs that participate in the program -- dubbed Partner Connection -- would receive special pricing for education and government customers; discounts on business class products when they buy through Ingram Micro, Tech Pacific and Multimedia Technology; reseller-only promotions and sales training and education.

Discounts would be available on Linksys' line of 10/100 Ethernet and Gigabit switches, KVM, print server, network cards, security, video camera and network storage products, the company said.

Tsao said the company would continue to leverage the well-known Cisco brand and the program was structured in a way that once a VAR was approved, there was an opportunity for it to make better margins.

Brian Allsopp, regional manager, Australia and New Zealand at Linksys, claimed that based on reseller feedback, the channel was making one and a half times the margin selling Linksys that they would with competing products.

In the US, Linksys is currently the number one wireless vendor servicing the SOHO and SMB market with a 50 percent share, according to Tsao.
It was also seeing 30 percent sales revenue growth per annum and shipped 7 million wireless devices last calendar year.

The company is also the number one supplier of networking hardware to the retail market in North America, owning more than 40 percent of the market.
Allsopp confirmed he was in discussions with local mass-market retailers to take on the Linksys product with a view to capturing the number one spot here.

In calendar 2003, Netgear, D-Link and Belkin owned over 60 percent of the retail network hardware market in Australia, according to IDC communications analyst Susana Vidal.

Vidal claimed Linksys had been trying to penetrate the retail market but was finding it difficult to get into the likes of Harvey Norman. Netgear, D-Link and Belkin were firmly entrenched inside the mass-market retailer, she said.

Vidal suggested that Linksys could penetrate the retail space through service providers putting together retail-style bundling deals. Telstra and Netgear had put together a wireless retail bundle and Linksys would have to do a similar thing, she said. "I think they're having a hard time [in retail] and I think they thought coming here [to Australia] would be easier," Vidal said.

Linksys distributors were positive about the vendor's potential here. Rodney Thorne, business manager, storage, networking and security at Ingram Micro, which had been dealing with Linksys for over two years, said the company had a good opportunity to replicate the strategies it had used in Europe and the US.

"They don't have a saturation of partners like Netgear and D-Link so it's viable option. Linksys are well positioned to make some money for people," he said.

He said the new program was VAR-specific and it would be a challenge for Linksys to penetrate the VAR channel and "show them it's viable and profitable business," he said.

Since being acquired by Cisco last year, Ingram Micro had seen a "major acceleration in Linksys sales" as the vendor was doing a good job of hitting specific vertical markets. "We're getting good growth out of it [Linksys]," he said.

Joshua Velling, systems and peripherals category manager at Tech Pacific -- also a Linksys distributor -- said the company was in start-up mode with the vendor. "I'm pleased with the results. We see them as a key part of the digital home. They've got some great products in the wireless networking space," he said.


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