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As Quest Software forges its way as an independent company, one of the initial steps it has taken is to develop a distribution channel strategy.
Dell sold Quest last year as part of the Dell Software Group to private equity firm Francisco Partners and hedge fund manager Elliott Management. Quest, under new ownership, was established as a stand-alone company in November 2016, as was fellow Dell Software Group company SonicWall. Since then, Quest has focused on growing its channel, with efforts that have included transitioning from a largely one-tier model of direct and indirect business to a two-tier model through partnerships with distributors.
After an extensive vetting process, Quest selected Tech Data and Arrow Electronics as North American distributors, as well as immixGroup, which is a wholly owned subsidiary of Arrow, to distribute Quest products in the federal market.
The selections of these distribution partners boiled down to a few things, said George Karabatsos, director of global distribution and channel sales at Quest Software, based in Aliso Viejo, Calif.
Namely, Tech Data and Arrow demonstrated a willingness to invest resources into its relationship with Quest and an "ability to execute quickly," Karabatsos said. Additionally, Quest believed "a combination of Tech Data and Arrow would allow us to attain optimal coverage without being over-distributed," preventing unwanted overlap between Tech Data and Arrow's respective reseller communities, which he said can result in redundancy and conflict.
The distribution alliances are off to successful start, he noted. "I have never seen distributor partners of this stature commit the level of resources, in terms of people, funding, so on and so forth. ... I am pretty pleased with the progress made by both Arrow and Tech Data and us."
Distribution channel strategy: The role of distributors
According Karabatsos, distributors play a more valuable role to vendors than ever before.
"Back in the day ... it was all around pick, pack and ship ... holding the receivable and ... holding inventory and all that sort of stuff. And to some degree, it still is. I think those are almost table stakes to be world class in logistics and so forth," he said.
While certain jobs like demand generation, recruitment and partner enablement "were always the responsibility of the vendor, and still [are] to a large degree," vendors can now rely on distribution partners for these functions "and then well beyond that," Karabatsos said.
George Karabatsosdirector of global distribution and channel sales, Quest Software
Quest decided distribution partnerships could help scale its channels "aggressively but wisely," he added. "We don't want to just add partners on a random basis; we want to have a surgical approach. … And we felt we would need distribution partners to help us do that quickly and efficiently and leverage some of their relationships."
Karabatsos believes there is more its distributor partners can do in the future to help Quest, including delivering Quest's services, being proactive in renewals and expanding into international markets.
Benefits of independence from Dell
Establishing a distribution channel strategy is a major stride that Quest has taken since the vendor's days at Dell. Going forward as an independent software company, Quest looks at itself as "a rough and tough, billion-dollar startup with a relatively lean and mean attitude and a pretty straightforward selling motion," Karabatsos said.
He said Dell and its master brand gave Quest a strong lift while Quest was part of the company, but noted Quest and Dell's sales motions differed. "Trying to be the smaller software brother of big giant hardware brother sometimes made that difficult," he said.
Quest can now react more nimbly to the market. "One of the biggest things is we will be able to ... begin to invest, from an R&D standpoint, in product technology upgrades and strategies and so forth that whilst we were in Dell was hard to be a priority because we were such a small piece of Dell," he said. "Now, as we are in control of our own destiny, our ability to focus, to invest in technology ... is much greater," he added.
He said another benefit of independence is that it potentially opens up new relationships with other hardware manufacturers that may have viewed Quest as a competitor in the past.
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