Netgear’s messages from the top

It is always interesting to hear what global CEOs think of their Australian subsidiaries. CRN recently spent some time with Netgear CEO Patrick Lo, and local managing director, Ryan Parker, to discuss how local business is going for the networking vendor.

CRN: How is Australia performing for Netgear in both a global and Asia-Pacific context?

Lo: Australia is our best performing country, bar none, in the world. This is in terms of per head of population, in terms of market share, in terms of our market awareness, and our relationship with the channel. We started our Australian operations very early. Netgear was established in 1996 and right after that we started in three markets: Australia, Japan and Germany. Japan is a tough market for anybody and Germany can be a hard market to figure out, but the Australian market is closer to the US. Because we are American, it is easier for us to pick the right partners [in Australia], as we speak the same language, the economies are alike and we think alike.

In Australia I think we hired the right country managers to begin with and we signed up the right distributors, too. That helped us to significantly penetrate the market. However from a product standpoint it [our approach] is the same around the world, which is providing the best enterprise technology to the SMB market, at an SMB market price. We work through the channel and the channel only. We never compete with the channel and we never go direct. We had a perfect example recently when the [Australian] Department of Education came to us and gave us a deal, but we will not do the deal direct. We will still go through our education VARs, who will then source the products from the distributors. That is the same formula we apply everywhere around the world.

Parker: The NSW [education body] went out to the market to look for a solution for its schools to provide additional storage to its server environment. What they wanted was a network attached storage (NAS) solution that met certain requirements where they could basically go to a school and say ‘this is what our preferred product is and here is the preferred program for purchasing it under’. You can just plug it into your network and you have increased storage.

Lo: The reason we were selected is the same reason some of our switches are used for the University of Canberra. Already NAS has the technology which is patent pending, which enables data to stay online. You don’t have any downtime. So that is a very unique enterprise technology which we have bought to the SMB. That is one example.

Smart switches is the same thing. About four, five years ago the big enterprise switch guys such as Cisco and HP said they wanted to incorporate the router in the switch too, that was pretty expensive though. Guess what? Two months ago we introduced our smart switch which does the same thing, but for a third of the price. That is another example of us taking enterprise technology and putting it into the SMB space.

From a channel program perspective we have also been pretty consistent [globally]. We have the PowerShift Partner Program around the world. Anyone can sign up as our partner and you don’t need to be certified, however, we have different levels. If you are more committed to Netgear, you get more co-operation, such as co-marketing, demo equipment concessions, joint seminars, recruitment efforts and lead generation.

We have managed to sign up a lot of VARs and distributors. For example, in Australia we have two big national distributors, Ingram Micro and Synnex, but we also have regional distributors in NSW, Victoria, South Australia and WA. The reason we do this is because there are small resellers who want to sell our products, but they hate to deal
with the big nationals with all the paperwork and hoops to jump through.

CRN: How do you manage potential conflict between your national Australian distributors and the regional distributors?

Parker: Ingram and Synnex have a broad product range and are very good at time to place shipments. The smaller guys have more of an education approach and can add value to what the reseller is doing.

Lo: A lot of our VARs around the world are servicing small businesses with 50 employees and below. Those VARs may typically have two or three employees. If they call Ingram and are asked about a balance sheet, they are not going to get credit. They need to call one of our regional distributors such as Dicker Data. Even in a big market such as the US, we do the same thing.

CRN: When we think of Netgear, we often think of the SMB market. Do you have much of an enterprise focus?

Lo: It depends on how you class an enterprise. If you define an enterprise as an installation that will require 200 to 500 nodes, we are definitely in that space. We are very active in working with branches of a huge company, for example all the KFC stores in China are equipped with our routers and Wi-Fi.