Blog | April 15, 2014

What Does The Zebra-Motorola Solutions Deal Mean To The Channel?

By The Business Solutions Network

Motorola Solutions

This morning, Motorola Solutions and Zebra dropped some big news. The gist is that Zebra is paying $3.45 billion to acquire Motorola Solutions’ enterprise mobility business. Zebra becomes an end-to-end mobility solutions provider. Motorola focuses on its government radio business.

Unlike previous acquisition news in this industry, this deal brings together two companies that complement one another rather than simply gobble up a competitor. On paper (and only having a couple hours to think about this), the deal seems like a great one for Zebra. While I can’t comment on the cost of the acquisition, Zebra’s strength in the industry just got a whole lot stronger as the company can now offer a total mobility solution. Great for Zebra, but how will VARs figure in this deal?

In general, Grant Wickes, VP of marketing for System ID Bar Code Solutions points to Motorola and Zebra’s “strong channel DNA,” feeling that the combination will be generally good for the channel in the long term. Short term, he says might suffer. “Integration (alignment and arrangement of channel account managers [CAMs] and channel marketing folks) is always disruptive in short term as decisions are frozen until personnel alignment is determined,” he says.

Zebra has thrown down the gauntlet to Honeywell over this deal!

David Bissonnette, executive vice president for Strategic Systems & Technology Corporation says the deal is a “two great things that taste great together” event for partners who sell both Motorola and Zebra.  “Being able to work with one combined sales and channel organization means that our reach will be greater, our joint account planning will be much tighter and our administrative overhead will go down,” he remarks. 

Pete Wenzel, president of General Data Co., thinks the deal "is a brilliant move on both Zebra’s and Motorola’s part. Frankly, partners and distributors have been scratching their heads for years questioning Moto’s strategy." He goes on to say that Motorola has been the “tale of two separate companies” for years. "I’m not qualified to say what synergies there may have been in the back room of technology development, but from a partners point of view, there was ZERO synergy between Enterprise and Government & Public Safety divisions," he states. "It has been clear for a long time that senior Moto management (all being from the radio Government & Public Safety side of the business) really had no clue as to what to do with the Enterprise space."

Robert Ladd, president and CEO of Miles Data Technologies says "As a reseller, I like consolidation because it gives us fewer channel programs to manage. At the moment, I can’t envision any negatives for the reseller channel. Over the past 10 years, Zebra’s management team has gained a better understanding of the mobile computing business so I believe they are ready for what I’m sure was a well studied acquisition opportunity."

VARs who worked with one of the companies often worked with the other, so I’m not sure how much partner consolidation there will be. Wickes cautions that MDF programs/dollars and manufacturing leads available to partners could be reduced as two combined channels come together. Time will tell.

Wickes adds that both companies see opportunity and growth in Enterprise, so he expects that we’ll see added focus on direct sales to big customers, which may have some disruption to the part of the channel that caters to big companies. “Conversely, both companies leverage channel to sell efficiently to SMB, so that will create continued opportunity for resellers in this segment,” he says.

What long-term effect might this have on the channel? “Mobile computing as a segment continues to grow at double digit rates which is good news in and of itself,” says Bissonnette.  “Specific to our business, we are even more encouraged by the fact that over the last six months, so many of our large enterprise clients have decided on Android as their go forward operating system for their business applications.  With so many new enterprise ready Android based mobile devices being released by Motorola/Zebra, we as resellers are in a great position to capitalize on this trend.”

Ladd believes that there will be more synergistic opportunities with Zebra and the Motorola Enterprise business than there was with Motorola’s Enterprise and 2-Way Radio businesses.

Wickes expects that there will be more acquisitions by Zebra (and maybe others) as the hardware consolidation ends and these companies look at adding software as way to add value to their offering.

Wenzel offers a unique perspective: "After the acquisition of Intermec by Honeywell, Zebra was put into a defensive position to protect their dominance. There was a new 800 lb gorilla in the room. My own speculation [that proved wrong] was that Honeywell, not being in the printer business and wishing to keep a good relationship with Zebra, due to so many overlapping customers and deals, would spin off Intermec printer and media division to Zebra. Zebra has thrown down the gauntlet to Honeywell over this deal!  It creates a similar market situation as the beverage business with two titans Coke & Pepsi = Honeywell/Intermec & Zebra/Moto with Dr. Pepper/7Up = Datalogic. It will be interesting to see it play out."

Of course, all of this is speculation. As more information comes out, we'll have a better understanding of how VARs will stand to benefit or be hurt by this deal. What are your thoughts? Feel free to comment below on whether this news will positively or negatively affect your business.

Here's the full news release if you're interested in learning more.

NewMotorola Solutions Comments On Zebra Acquisition