Network Cabling
Digilink again the first choice
The channel satisfaction score-card for 2009 in the network cabling category looks very similar to the 2008 rankings. Digilink, which demerged from D-Link, re-emerged as the most-preferred vendor, primarily because it enjoys wider channel connect. AMP Tyco came second while Commscope ranked third. Both Molex and Krone failed to make it to the final list because they polled less than 10 percent of the total votes.
Digilink
Digilink is the most widely distributed product compared to its peers which have a limited distribution model focused only on certain key cities. As a result, Digilink polled substantially more votes compared to both AMP Tyco and Commscope.
Digilink is almost 15-20 percent cheaper than AMP Tyco and 30 percent cheaper than Commscope. In the SMB segment it scores due to its price-performance. The brand suffers from the perception, among both customers and channel partners, that it is largely an SMB product. In fact many of Digilink’s own partners said that in large enterprises they deploy Tyco because it is perceived to be a more reliable brand. They say that while the perception may not be correct, it still exists.
Most respondents selling both D-Link and Tyco said that the former did a better job in managing product prices at a time when copper was experiencing wild price swings. Many Digilink partners said that it was very aggressive in tendering for large projects in the government and education segments, and won many deals due to its competitive pricing; this provided them more business in 2009. However, due to its low pricing and wide availability, the company fails to deliver on partner margins. Even in deals of Rs 10 lakh-15 lakh, partners said that the company left only 3-4 percent margins for the partner.
Digilink also doesn’t have a strong pre-sales team that can engage with customers and educate them that their products are as reliable as other cabling brands. However, the company does conduct regular meets with channels in several cities and impart training and information about new products and technologies.
On the overall channel policy and management, Digilink scored better than its peers as it has a wider network of offices. Its local teams engage regularly with channels and are perceived to be more responsive in addressing issues confronting partners.
AMP Tyco
Tyco is recognized as the best quality brand, and it has strong brand-pull among customers. Respondents said they chose Tyco when customers wanted absolute assurance on quality, and price was not a limiting factor. It scored high on parameters such as channel marketing and pre-sales, and brand-pull and customer marketing. However, it scored lower than Digilink on product availability, and suffers from ex-stock availability in many class B and C cities.
The company consolidated its partner network, and that hasn’t gone down well with some of its long-time partners who felt sidelined. They complained that the company has been siding more with bigger partners. Its channel engagement suffered in the south and west as the company lost its regional managers, thus affecting partner relations.
Tyco also failed to manage its product pricing during the fluctuations in the prices of copper. For instance, over a period of two months from June to July 2009, Tyco increased prices from Rs 3,800 to Rs 4,500 per cable box. This affected partners who had already committed pricing for ongoing contracts. What’s more, this led to a scenario where some sub-distributors who had old stock were selling Tyco products at prices 10-15 percent lower than the SPC (special price clearance) given to the authorized partners.
Tyco has a good lead generation program. However, a few partners complained that in some cases the company passed the leads to other partners; this created competition between partners for a single deal.
Commscope Systimax
Commscope doesn’t have any local manufacturing facility, so all its products have to be imported. Earlier, the products used to take 6-8 weeks to reach partners after an order was logged in; however, during the second half of 2009, the company’s distributors have started stocking some fast-moving products, thus improving availability.
Commscope Systimax has positioned itself as a high-end brand, and is available mostly in class A cities. It has little or no presence in smaller cities. The company favors a select group of large partners focusing on very large deals and global accounts. This puts smaller partners and non-partners at a disadvantage and the company received low scores from such respondents.
On performance it is deemed to be on par with Tyco, but is priced 15-20 percent higher. From a profitability perspective, Commscope is able to charge an almost 30 percent premium over other brands, thus offering better margins to partners.
Some of the large partners of the company said that over the past few months, Commscope has invested significantly in improving its channel engagement and pre-sales support.
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