Tech Data Helps TechSelect VARs Land SMB, Government Contracts

At the distributor's recent TechSelect conference for SMB and government solution providers in Washington, Tech Data's government division unveiled several initiatives exclusively for TechSelect members.

One is a new Prime Contractor Referral program under which the distributor helps disadvantaged and minority-owned solution providers partner with national integrators to win federal government small-business contracts.

While Tech Data has helped other small solution providers partner with large integrators to win government contracts, this is the first time the distributor has formalized the program. From now on, Tech Data will provide that service exclusively to TechSelect's 340 members.

CyberCore's 2004 run rate recently increased more than 200 percent.

Other new initiatives in the government market include extended floor-plan financing terms, to 60 days from 45, from GE Commercial Finance; extended 60-day credit on products from Cisco Systems, Enterasys Networks and Lucent Technologies; bid and performance bonding from Textron; and solution provider advertisements in end-user government magazines.

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CyberCore is one solution provider that's already enjoyed a significant uptick in its business as a result of Tech Data's enhanced assistance to government resellers.

The $50 million VAR recently signed several contracts with Lockheed Martin worth more than $100 million over a period of two to three years to provide products and services to government accounts, said Doug Oakley, vice president of sales at CyberCore, Timonium, Md. The company is working on about five more similar deals that it would not have been introduced to without Tech Data's help, Oakley said.

"The buying power, the multiple warehouse locations, the financial resources and the proven track record of a major distributor made [the large contractor] more comfortable in dealing with us," Oakley said. "As a small business, without the resources and support of Tech Data, it would be tough for Lockheed to come to us."

So far, Tech Data has helped one other Tech Select member besides CyberCore partner with a large integrator to win a federal contract earmarked for disadvantaged or minority-owned businesses. But the distributor plans to involve more solution providers in coming months, said Erich Ohngemach, director of government field sales at Tech Data, Clearwater, Fla.

Jay Kishur, president of California Integrated Solutions (CIS), a solution provider in Diamond Bar, Calif., said he plans to take advantage of the partnering and credit opportunities offered by Tech Data.

"[The distributor's] name in itself will help us because most of the large integrators already deal with them," said Kishur, adding that his company could gain millions of dollars in yearly incremental business by subcontracting for a larger company.

CIS and other solution providers said the extended credit programs also will help to relieve financing pressures. Many customers take more than 40 days to pay, they said, and solution providers often have to pay for a full product order even though a piece of it may be missing. They can't bill the customer until the full order is delivered, which further extends the payment cycle and drains credit. "Credit extension is a big deal," Kishur said. "It helps take some of the strain off us."