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Ingram Micro distribution deal raises questions for Citrix partners

Exclusive distribution deal will offer more perks but could erode partners' leverage in margin negotiations.

Citrix Systems' exclusive distribution deal with Ingram Micro could cause problems and force solution providers to make tough choices, said some Citrix partners.

Citrix said last week it will drop Avnet, Alternative Technology and Tech Data as distributors as of Aug. 30 and make its existing deal with Ingram Micro an exclusive relationship. In return for that exclusivity, Ingram will offer additional support and resources to Citrix partners.

"It could conceivably help our business, but that's to be seen," said Francis Poeta, president of Citrix partner P and M Computers in Cliffside Park, N.J. "If you're going to get all that [business], you better be providing services."

Craig Stillwell, Citrix's vice president of marketing and sales support, said the vendor had no real problems with its other distributors but wanted to do more for its partners.

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"It's really about driving more value and focus into our channel," he said.

Some 1,900 Citrix partners in North America buy through distributors, and all but 120 of those have some existing relationship with Ingram Micro, Stillwell said.

"Any time you make a change this large, there's certainly some turmoil," he said. "Pretty quickly we'll start to see the value to partners."

Eric Courville, vice president of sales and business development for Citrix partner Embotics in Ottawa, said value-added resellers (VARs) will lose the leverage they now have to negotiate for better margins from multiple distributors. But if Citrix is a big part of their business, the new Ingram Micro distribution resources could bring even bigger, and offsetting, benefits.

"It's a balance of what you give up versus what you get on the other side," Courville said.

The exclusive Ingram Micro distribution deal also signifies a trend of vendors trying to get more value out of distributors, but working with fewer of them, Courville said. That's been the model for several years in Europe, where more business goes through the channel, so that could be a good thing for Citrix partners in North America, he added.

But Poeta said he's not really sold on the trend.

"This whole concept of a value-added distributor -- I don't buy it," he said. "I don't see it happening."

The biggest benefit that Citrix partners will see is an increase in leads generated by Ingram Micro distribution, Stillwell said. Without an exclusive deal, distributors are wary about generating leads for partners, because there's nothing to keep the partner from taking that business to another distributor. That's no longer an issue in this expanded Ingram Micro partnership, Stillwell said.

Citrix partners that make purchases through Ingram Micro distribution can also earn credits redeemable for training courses or lead-generation programs. Citrix and Ingram Micro will also more closely align their marketing campaigns.

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