Tech Pac launches enterprise group

Mainline distributor Tech Pacific has launched an Enterprise Technology Group (ETG) in an effort to shake-off the perception that's it's only a volume distribution player.

Stuart Ellis, who has been re-hired as Tech Pacific business manager for the ETG, said the distributor now wants to be seen as providing enterprise support for more complicated technologies as an adjunct to its core volume distribution business.

Tech Pac's ETG will focus specifically on higher-margin growth areas such as server systems, storage, load balancing, networking, licensing and security technologies. ETG would provide resellers with support for sales, technical pre-sales, professional services, marketing, logistics and vendor engagement. Fresh reseller programs would be launched over the next few months, Ellis said.

Ellis had previously worked for Tech Pacific between 1989 and 1999 driving its value-added business, but left the company to take up a 'directorship role' at reseller Computer Logistics.

He said the company has a skill-set in enterprise products that it hadn't previously been harnessing and delivering to its reseller base.

He said that Tech Pacific had been selling complex products and support services 'spasmodically' and hadn't been capitalising on opportunities to take a more consultative approach to the reseller channel.

Today, 85 percent of the distributor's sales revenue in Australia and New Zealand is driven by volume sales with the remaining 15 percent by higher-margin value products, he said.

Over the next 12 months, he is hoping that up to 30 percent of sales revenue would come from ETG. Tech Pacific has 10 pre-sales consultants dedicated to promoting these so-called 'value-added' technologies to its reseller base.

There are no plans to increase this number, he said.

'Tech Pacific has been in value-added distribution for ten years, yet we are seen primarily as a volume player. It's a different style of business for Tech Pacific - it's more solution-based and it's technology that is sold rather than bought,' he said.

While the volume distribution model had come under pressure over the past few years, Ellis said resellers and distributors alike need to have a more 'balanced portfolio' of products and services. 'Our business is pretty solid at the moment - we've been through a period of rationalisation and we're [delivering] excellent numbers but the time to consolidate into growth areas is now,' he said.

John Walters, sales director at Tech Pacific Australia, said the distributor now has the ability to leverage its volume business into other areas. 'We've had skills to do the value side but it hadn't been co-ordinated or marketed properly. I think we're missing an opportunity if we don't do the value stuff,' he said.

Tech Pacific in the past hadn't been moving mid to high-end products from the likes of IBM and HP because it was seen purely as a volume player.

When asked whether its enterprise move would potentially take business away from specialist distributors such as LAN Systems and LAN 1, Walters said: 'I don't think we'll ever be able to provide the niche solutions that those players can do.'

Ellis expected that the enterprise move would bring some 'inactive' reseller customers back into the Tech Pac fold. 'We do have a number of 'sleepers' within our account base today. ETG will bring incremental specialised partners into the base that we haven't got today,' he said. He also claimed that the distributor was signing on average around five new reseller partners each day.

The move follows CVC Asia-Pacific Limited's acquisition of a majority stake in the Tech Pacific group of companies in mid-June. CVC acquired 58.5 percent of the group for $200 million through investment vehicle Techpac Holdings Limited.