Dropping Disties Could Hurt Citrix, VARs Say

A lack of financing options and bad experiences in working with Ingram Micro in the past top the list of Citrix reseller complaints in the wake of the news that Citrix Systems Inc. will only sell its software products to resellers in North America through the Santa Ana, Calif.-based distributor, dropping Avnet, Alternative Technology and Tech Data in the process.

In interviews and in online comments to the ChannelWeb story about Citrix's plans, which were formally announced today, Citrix channel partners generally expressed unhappiness with the new policy, which takes effective Aug. 30. Several predicted the change would make it more difficult for Citrix to compete against VMware in the market for virtualization software.

A couple even suggested Citrix's move was a prelude to being acquired. "Perhaps consolidation of customers allows for an acquisition by Cisco? No better time than while languishing at $26/per share," wrote "consultant Jim Gruzlewski" in a Web post.

Starting Aug. 30 Citrix's 1,900 North American resellers that buy through distribution will have to go through Ingram Micro. Many have relationships with multiple distributors, but 120 of Citrix's channel partners in North America do not have an account with Ingram Micro, according to Citrix executives.

Citrix said that with the new strategy the company can better leverage Ingram Micro's partner development and demand generation services. It provides the distributor with more incentive to devote time and resources to help Citrix grow and support its partner base, they said. Citrix and Ingram Micro also announced a couple of new channel initiatives, offering sales leads and sales credits that can be redeemed for training and marketing assistance.

Some resellers are willing to give Citrix the benefit of the doubt, arguing that the company recognizes the importance of its resellers to its success. "We're talking about Citrix. Their DNA is channel," said Peter Anderson, president of Bayshore Technologies, a Tampa, Fla.-based solution provider and Citrix platinum partner. "I'm confident this is well-thought out." Bayshore buys Citrix software through Ingram Micro and Alternative Technology and said "Ingram has been a good partner for us."

Other channel partners commenting on ChannelWeb took a philosophic approach to the news. "It's probably too costly in terms of hard dollars and human resources to sell through three distributors. Ingram is king of the hill anyway," wrote "alexznj1."

But most comments weren't as forgiving. "This is VERY BAD for us successful [Citrix] resellers," wrote one anonymous channel partner. "Ingram is a major hassle to work with and does not extend sufficient credit for our type of business. [Alternative Technology] is awesome to work with and makes a big difference in enabling us to do significant volume."

"My company will NOT be coerced into dealing with Ingram. We will drop Citrix instead," said "jrw." That was echoed by a post from "Small VAR": "Citrix has been very difficult to deal with and I am considering no longer selling Citrix products."

The issue of limited credit options was a recurring theme in the comments. "Don't they understand that one disty will limit their partners' ability to leverage multiple credit lines to purchase product?" wrote "EG." "After all these years they still don't understand distribution."

The impact on Citrix's competition with VMware was also widely hit. "You would think that Citrix would want additional value-add allies like [Alternative Technology] in their upcoming battles with VMware," wrote Gruzlewski. "Bad move. Citrix has a great opportunity with the changes afoot at VMware," agreed a comment from "Partner Advocate."

Spokespersons for Alternative Technology (acquired by Arrow Electronics in 2006) and Tech Data didn't return calls for comment. Jeff Bawol, president of Avnet Technology Solutions, Americas, provided statement saying, "While we're disappointed, we respect their decision," he said of the Citrix decision. "We will work with our partners to ensure a smooth and seamless transition." He also said Avnet is committed to products from Citrix competitors, including F5 Networks and VMware.