McAfee Cuts Off Merisel

The Santa Clara, Calif.-based security software vendor terminated its distribution agreement with Merisel, El Segundo, Calif. The distributor disclosed the move in a statement released Wednesday.

McAfee products were very much the lifeblood of Merisel. "For the year ended Dec. 31, 2003 and the three months ended March 31, 2004, McAfee products accounted for approximately 94 percent and 84 percent, respectively, of the company's net sales," Merisel officials said in the statement.

Merisel acknowledged that McAfee's move clouds its future. "[Merisel] believes this event will have a substantial impact on the company's revenue and operating performance, but the company believes it can significantly reduce its operating expenses over time to reduce the long-term impact on the company's operating performance," company officials said in the statement. "However, there are no assurances that the company will be successful in doing so."

David Roberts, McAfee's newly appointed senior vice president of North American channels, said the decision to sever ties with Merisel was part of a larger plan to shift the vendor's distribution strategy from volume dealing to a more value-added approach.

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"Merisel is a volume player, and we are moving away from a volume play to be able to go in and work better with distributors like GE Access, Tech Data and Ingram Micro," said Roberts.

To that end, McAfee aims to increase its market share in the booming SMB security space and leverage the value-added services of partners such as GE Access and Ingram Micro. Westminster, Colo.-based GE Access, for example, has created an online tool to help VARs sell McAfee intrusion-prevention solutions. In May, GE Access was authorized as the first distributor to carry McAfee intrusion-prevention offerings.

Roberts said McAfee also plans to toughen itself against competitors and polish its overall channel sales operation for an October launch of a revamped channel program.

"When you look at CA's emergence in the channel, Symantec's emergence in the channel and Cisco's emergence in the channel, there is not a whole lot of shelf space left to think about McAfee," Roberts said. "So unless we look at our strategy and make it as complete a channel strategy as we can, [customers] are going to default to Symantec, and they're going to default to Cisco."

During the next several months, solution providers can expect more changes related to McAfee's channel, Roberts said.