Exeed has signed an exclusive agreement to distribute email security vendor SMX, the first offering in the distributor’s cloud portfolio that is set to launch next month.
The agreement gives SMX its first distribution channel in New Zealand, expanding its reach from 200 existing resellers to potential sales through Exeed’s 2000 channel partners.
Exeed plans to bring its App Store cloud portal online on December 1. The distributor is in talks with other vendors to build up its SaaS offerings, as a company known for bringing HP products to market diversifies its product range and delivery.
The plan had been in the works for some time, according to Exeed and SMX spokespeople.
“In New Zealand, being a small IT market, the top performing companies are reasonably easy to identify and Exeed was one of those that kept on reappearing,” says SMX co-founder and CEO Jesse Ball. “We’ve been talking loosely about a relationship and a formal deal for quite some time. It has been a combination of [Exeed’s] plans in terms of security offerings, and SMX’s plans and growth and our need to better serve our channel. Those two streams came together at the right time and that’s probably the basis for the change on both sides.”
Ball says his company, as part of its due dilligence, considered proposing formal relationships with other distributors. The deal began to cement when SMX, a New Zealand company that sells email security and billing and provisioning SaaS products, hired former HP market development manager Telanches Sun as its reseller account manager in August. Sun had joined SMX with a close working relationship with Exeed, although Ball saw strength in the distributor’s broad reseller channel.
“With the relationship Exeed has with resellers and the number of engagements they have on a daily basis and to be able to provision that through a SaaS channel was very logical step,” Ball says. “From a strategic point of view trying to centralise those relationships and build on existing positive spaces that Exeed has, made it an absolute no brainer.”
Exeed managing director Justin Tye says the SMX deal was formalised before the cloud launch to ensure a smooth transition for SMX’s New Zealand channel.
“As part of the relationship, we’re assuming responsibility for an existing channel, which means that once it’s set up and launched, we have immediate responsibility to maintain and develop the channel and provide the level of service SMX is looking for,” says Tye.
Exeed is also in the process of finalising deals with other vendors that will comprise its SaaS portfolio.
“These will all be the core applications that businesses need to run,” he says. These include accounting, payroll, job-costing and “some verticals around mobile device security and so on” Tye says.
Exeed has appointed a sales manager to be responsible for the app store and he is hiring a dual sales administrator-channel BDM to support the new hire. Exeed’s sales staff of 14 will also support the new portfolio.
Tye says the deal creates new opportunities to sell products on top of hardware or through the cloud.
“I think [SaaS] is nicely complementary if you have a large hardware business in existence,” he says. “Certainly we see that there’s a general trend down in the margins from the sale of hardware. And there’s an upward trend in the public cloud providers or those who provide apps to end user. We saw this as an opportunity to implant a layer between the developers themselves and the customers, that layer being the reseller channel. In doing so, when you sell a notebook for example, if you can attach one or two SaaS products at the same time, your ability to enhance margin is quite significant. It is the way to sell.”
Ball says the argument SMX makes to customers is that moving security into the cloud eliminates the cost of managing hardware on premise, locking into a relationship with a hardware vendor whether or not it suits, or paying the expense of evaluating products every time an appliance comes to the end of its life cycle.
Tye says there are plans to sell the email security product as a service through retailer channels as well.
Although SaaS has grown globally over the last few years, Tye estimates that the channel in New Zealand currently sells software more in the traditional way than via the cloud.
“But there’s a swift migration toward cloud as we and others implement similar solutions,” Tye says. “We’ve found a way to enhance the margins in the channel and that’s what’s going to drive the swing toward more cloud based apps sold through resellers instead of packaged products.”
SMX currently has 28 employees with most of its accounts based in Auckland, and regional headcounts where the company has a direct presence in Australia, India and Japan.
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