"Our relationship with SDD has been a long and fruitful one. However, due to changing business circumstances we are re-aligning our local distribution strategy and as of 30th November 1998, SDD`s distribution contract with Novell will come to an end. " said Novell SA managing director Richard Beytagh. "We will continue to work with SDD to ensure pending Novell business obligations are met".
October was the end of a very successful year for Novell, both locally and internationally. "We have seen a huge increase in commitment towards our products from the largest corporates in South Africa and we are experiencing extraordinary growth in large enterprise networking projects," added Beytagh.
"In addition, we have noticed customer purchasing characteristics changing from commodity- based buying to customised volume and site licensing purchasing. The need for broad-based distribution has declined significantly."
Martin Bawden, Novell distribution and channel manager says longstanding distributors, Lan Design and Datatec Workgroup will continue into 1999 as Novell`s mainline distribution channel and HNR will continue as Novell`s sub-distributor.
"We have always maintained a very strong relationship with our channel and we have worked very closely with our distribution partners to develop the South African reseller base. With this move, Novell remains very committed to the distribution model and will be able to focus more closely on the two remaining distributors," said Bawden.
Datatec Workgroup has always seen Novell as a key and strategic business partner and will continue to focus its efforts in taking Novell`s products to market through its channel partners. "We have seen tremendous growth in our Novell product sales over the past year and we believe, as a result of our focus on software products and solutions, we will be able to capitalise on future opportunities and maintain these growth curves," said Datatec Workgroup director Douglas Woolley.
"We have positioned ourselves to follow the same model as Novell, a model which has changed from commodity-based buying to customised volume and site licensing purchasing. Datatec has always focussed on licensing as a software delivery medium and this currently represents more than 50 percent of our revenue. We look forward to the new relationship with Novell in the revised channel," concludes Woolley.
Lan Design managing director Gary Room says he is not surprised by Novell`s move to rationalise its channel. He is confident that the reduction of distributors will have no effect on the channel or on local Novell sales.
"With an effective four distributors in the market, the product was totally over-distributed and with Novell moving towards the delivery of licenses as opposed to red box, there was an urgent call for the distribution channel to change its skill set. Ultimately, this will best benefit the more focussed distributors who are potentially closer to the product than the broad-based ones," said Room.
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