System Builder Giant Seneca Stays On Distributor March With Fujitsu Deal


The Fujitsu deal adds yet another big name to the more than 100 vendors the system builder is distributing in addition to building and reselling its own Nexlink and Concentric systems brands. Fujitsu joins a long list of vendors that Seneca acts as a distributor for including tablet PC maker Motion Computing, Fault tolerant system maker NEC, PC and notebook maker Acer and networking players Netgear and D-Link.

The distribution pact steps up the battle between Seneca and distributors like Synnex which also carries the Fujitsu pen based tablet.

Steve Maser, vice preside of product development and marketing for Seneca, said both the system builder and distribution business are experiencing double digit growth for Seneca. He said the system builder business experienced about 30 percent growth in the 2007 year to $90 million, while the distribution side of the business was up about 15 percent to $65 million.

Maser said Seneca is forecasting organic sales growth of 15 percent in 2008. He sees Seneca adding more product lines to its distribution card including possibly a software virtualization vendor. What's more, he sees Seneca acquiring other system builders. "We have a couple of irons in the fire," he said. In 2006, Seneca acquired system builder Concentric Systems Inc. (CSI), propelling the new combined company into one of the top system builders in the country.

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Maser said he sees more consolidation in the system builder channel in 2008. He said Seneca added 375 new system builder customers to its lineup in 2007. "If we are not trying to get smaller system builders to let us build their systems then we are not doing our job," he said.

Maser said Seneca views Dell and Hewlett Packard as its top competitors. "Everything we do internally is to set our resellers apart from Dell and HP," he said. "We only sell to resellers."

As for how the Fujitsu deal will affect Seneca's existing distribution deal with rival Motion Computing, Maser said Seneca is aiming to grow both businesses equally.

John Hill, President and CEO of Allegiance Technology Partners, a $2.2 million tablet PC solution provider headquartered in Horshan, Penn., said he aims to move about $300,000 in business from Fujitsu to Seneca in the wake of the distribution pact. "We are very excited because these big companies (like Fujitsu) can't do distribution and stocking which resellers need," he said. "Seneca Data is great at that. I'm ecstatic."

If Allegiance orders a Fujitsu product from the vendor directly, Hill said it can take seven to 14 days before it is configured and shipped from Japan. "If I work with Seneca, I can get it shipped to my customer the next day," said Hill. "That is just huge. People take a long time to make a decision, but once they make it they want to have it right away. If we had to stock every different configuration for every product we'd go broke. The cost savings for us is in managing inventory and the administration and management of the purchase. That is where you save time and money."

Hill said he is glad to see Seneca stepping up its distribution march in the tablet PC market. "We only sell tablets, but it's obviously a lot better for us if we can get all the products for a customer from one place," he said. "Their distribution capabities are invaluable."

He said Seneca's ability to do custom software images or special hardware customization is a big benefit to solution providers. "If I sold someone a Fujitsu tablet before I would have to order the tablet from one place, a case from someone else and additional memory from someone else and put it altogether. If Seneca does it it all it saves me real dollars."

Maser said every new vendor that Seneca adds to its line card has to fit in with the company's vision to be the "leader in custom systems innovation."

"We are not looking to bring on the next projector just to sell it," he said. "We want to make sure we can add value to any product line we bring on whether it is Fujitsu, Motion Computing, or a printer maker like Oki Data."