As part of its overall effort to broaden its customer base, Broadcom Corp. has signed a global distribution agreement with its first e-commerce/catalog distributor, Mouser Electronics. The addition of Mouser to its distribution network is part of Broadcom’s new channel initiative, started about 18 months ago, aimed at penetrating the mass market.
At the same time Broadcom was launching the new initiative, the $8.3-billion semiconductor and solutions giant realized it had to do a better job of leveraging its channel partners, including distributors, value-added resellers (VARs), independent design houses, and strategic original design manufacturers (ODMs).
“This was a new concept for Broadcom,” said Vince Brocato, Broadcom’s senior director for its global channel. “We had focused on tier-one customers and that is how we built the company. This new organization that we put into place a little over a year ago is really changing the DNA of the company.”
Broadcom has done a great job over the years of focusing on the top two to three customers in every market, and has grown substantially, said Brocato. “About 1 ½ years ago we realized that we had extremely high market share in all of our target markets – 85 percent to 90 percent market share – and people were asking where the future growth was going to come from.”
The result was a new channel strategy that entailed spending a lot of time optimizing and training distributors, as well as building the number of VARs, independent design houses and strategic ODMs in Broadcom’s partner network. The company also grew its global channel organization by a factor of four in terms of people on the team.
Brocato admits that Broadcom hasn’t done a good job of supporting and servicing its channel partners in the past. “That has all changed. We have a lot more resources in place and a lot more focus on the channel with support from the top of the company to the bottom.”
As part of the process, Broadcom consolidated or expanded its channel partners, depending on the geographic region. “In the Americas, we did a consolidation; in Europe, we grew the number of distributors, and in Pan-Asia, the number of distributors are the same but we had some turnover. We looked for new partners for one reason or another,” said Brocato.
One of the things Broadcom discovered was it didn’t have a distributor serving small-volume orders, do-it-yourselfers, universities, and smaller start-ups that require evaluation boards and modules. “We’ve engaged with some big guys around the world – Avnet, Arrow and Macnica,” Brocato explained. “The larger guys didn’t seem to be set-up to target this group of customers.”
So Broadcom looked at a number of different e-commerce or catalog distributors, and then selected Mouser. “They seemed to be more semiconductor centric than the others we evaluated and they had an extremely strong and impressive marketing organization. Their search engine optimization capabilities were more advanced than the others, and in addition, they were getting ready to launch a partnership with a new tools company. All of these reasons made it very compelling for us to go with Mouser,” said Brocato.
“Broadcom has a great brand. In the industry they are viewed as a very high-tech differentiated supplier of semiconductor products,” said Jeff Newell, Mouser’s senior vice president for products. “They were interested in getting more into the mass market, and that is one thing a catalog distributor really brings to any supplier: a very broad set of customers.”
Another incentive was the growing demand for Internet of Things (IoT) solutions and products. Broadcom has introduced many new products targeted at the IoT space, which also helped drive this channel initiative, said Brocato. These include the Wireless Internet Connectivity for Embedded Devices (WICED) family, as well as the high-volume, more consumer-oriented RoboSwitch and StrataConnect Ethernet products.
The WICED Wi-Fi and WICED Smart development platforms provide a complete, simplified implementation of wireless connectivity, resulting in faster time to market for a broad range of IoT solutions. Mouser will offer same-day shipping on a variety of Broadcom mass market products.
“Mouser’s partnership with Broadcom provides customers worldwide with an enhanced selection of industry-leading products including Wi-Fi, Bluetooth Smart, and leading-edge RoboSwitch and StrataConnect Ethernet devices," said Newell.
Broadcom was also interested in Mouser’s product marketing support for suppliers and its focus on products that add value to the design engineer. This means products that are differentiated and offer higher functionality, added Newell.
“It’s not just that we buy [product] and stick it on the shelf and hope good things happen,” he said. “We really drive marketing to drive awareness of that product into the customer base. That is the thing that intrigued them the most. Not only are we going to buy all of their new products, we’re also going to spend money to market their new products to drive awareness with the right types of engineers.”
Marketing services can include targeted emails, trade marketing, as well as conferences and shows. There is also a lot of web activity at the Mouser.com website along with application websites that provide a lot of new product and how-to information to customers.
“When you add it all up together we have a very capable marketing engine and a lot of our suppliers find value in that and certainly Broadcom does,” said Newell.