The local branch of departmental and workgroup networking specialist, SMC Networks, has entered the South African OEM (Original Equipment Manufacturer) market by signing a deal with SoftLine subsidiary, Ultra Computer Technologies.
SMC country manager, Greg Perkins, sees the agreement as beneficial for various reasons: "Ultra operates in areas not typically covered by our traditional channel which provides us the opportunity to grow SMC`s market share in this part of the world while offering Ultra a way to enhance its own brand name," he says.
Brokered by SMC product manager at Siltek Distribution Dynamics (SDD), Paul Luff, the deal is significant in its deviation from the norm by involving three parties. "Typical OEM agreements are signed between the PC manufacturer and networking vendor without participation by a distributor," he says.
"However, such an agreement here would require Ultra to not keep stock, wherein lies the advantage of this deal - SDD holds the inventory and Ultra places orders as and when needed."
West McMullin, deputy MD at Ultra, says the advantages of this arrangement are threefold. "We are not required to hold stock; are afforded price protection from fluctuations in the Rand/Dollar exchange rate; and enjoy the convenience of having an SDD branch in each of the centres in which we operate - Cape Town, Durban, Johannesburg and Port Elizabeth."
Describing Ultra as more of a systems integrator than a manufacturer, he adds that each PC shipped with network card bundled represents a future opportunity. "This deal provides access to the full range - from hubs to switches, Ethernet to Fast Ethernet - meaning we can offer our customers real value-add in the form of a reputable, well known product."
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