Is it just me or does anyone else think that Microchips latest move (removing Microchip FAEs from distributers), is another big mistake? Already my companys biggest distributer has decided to stop pushing Microchip (because they can no longer provide the full support package), in favor of Atmel.
I know that Microchip think that providing all an FAEs function using their new online system is more efficient, but aren't they missing something?. If the distributers no longer get direct Microchip support then their sales position is weakened and their customers may not be offerered a Microchip solution in turn.
I might be missing the bigger picture here. Anyone any ideas on why Microchip have taken this position?
No idea. Sometimes companies decide to go the direct route where support comes directly from the manufacturer. At any rate, support is a vital part of the business no matter how it is delivered. If they keep the FAEs on board this may be ok.
Reducing the total number of FAEs is usually not a good idea. There is more than one manufacturer in my past that has lost a major chunk of revenue because they could not deliver support and I had decided to design in competing products. Mostly Europe though.
Did they have any FAE's at distributors outside the US?
certainly we just email Microchip directly, and have never had any problems with that - in fact, you get better late-night service than trying to go through a distie...
cheers, Rich,
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I'd say that's certainly not what Microchip intended, and is probably an 'unforseen consequence' - at least to whichever bean counters made the decision. A bit more obvious cause-effect to us closer to the front lines :)
Is it all distis, or just that disti ? I'd have thought the Disti pays the FAE, thus makes the decision, but maybe Microchip pays a portion, or has some other deals going... It may not have been Microchip's decision at all ?
Most semiconductor manufacturers pay an additional sales margin in the form of a rebate for distributors who provide tech support and other technical services.
Microchip have effectively revoked this system with the intention of providing the technical support and services themselves.
My personal view is that it will provide a short term gain and heavy medium term loss for Microchip's market share. What the stock price does over the same period is anyone's guess....
I'm not convinced this is a particularly bad move - web/email/phone is an entirely viable means of support these days, and as others have mentioned can be faster than other means, if done properly (I the last Microchip newsletter I got they mentioned they were about to extend their 24-hour phone support to weekends - how many distis do that..?) Moving to a direct-supply route, bypassing distribution offers the potential opportunity for significant price cuts, and the bottom line for most low-end microcontroller design-in decisions is usually price and availability. Microchip have always been the clear leader in the latter, and perhaps this is a strategy to be more price-competitive against recent low-cost devices from others. I don't buy a lot of PICs directly, but when I have bought the odd thousend chips, Microchip's online store has been cheaper than the distributors I checked. I'm actually rather surprised that the whole distribution model has lasted this long - the net has IMO made much of what they do obsolete. The only exception would be the broad-line guys like Farnell, Digikey etc. who are useful when buying small quantities of a wide range of parts for development and low-volume production, where range of stock and very fast delivery are more important than price. If I were starting a new semiconductor company, I'd bypass distributors, sell direct, offer really good support, and do regular seminar tours for the face-to-face contact that can be useful sometimes.
Me too. I read a magazine interview with Microchips CEO recently (can't remember where) and he was saying that design support was an area they felt was increasingly important and they would be expanding.
I used it once, worked fine. They show prices and stock and seem to have a lot of stock. Vastly less trouble than spending hours phoning round distributors hoping to find some stock rather than being quoted manufacturers lead times and MOQs.
long - the net has
Not just the NET, when distributors decided it was too expensive to hold stock they removed the justification for their existence. Many manufacturers still need to wake up, when their lead times are longer than design and development cycles and there is no stock in distribution they are not going to get design wins are they?
When I search for a part number on the net the number and nature of hits from the far east make me wonder what it is like in that area, they seem to have a vibrant distribution system based on holding and moving stock not talk and moving paper.
As some post have already mentioned and I have been told by my Microchip FAE, support is only being taken away from the disti's. Microchip will now provide all support as they feel they can do it better this way. From some of the replys here it looks like they might be correct.
My concern was that if the disti's stop pushing microchip for new projects in favor of others, then Microchip will inevitably loose out. Maybie it'll all pan out. Could be that I'm used to the disti approach and am blind to this way.
Didn't Microchip do this before with Arizona microchip (withdraw from distis), and then go back ??? Bit fuzzy about what happened back then but something similar happened I think? jim
I would second that, buy direct from Microchip IS very good for the customers who always can check stock level and availability without phoning distributors.It's very useful when you have custom project waiting to evaluate different microcontrollers for different volumes etc. One of the reasons to put PICs everywhere we can is that we can go and check availability online, while our Atmel distributor don't keep any AVR parts on stock and always quote 10-12 weeks delivery time even for generic casual microcontrollers like ATMega16 or ATMega128. Go explain to your customer to wait 3 months until you get your parts for his design and then to wait for assembly. Who would ever need such distributor (actually nothing but middle man)? As far for the support we never counted that our Atmel distributor can provide any and it's even not locally based (the Atmel distributor for Bulgaria is Codico/Austria - never though something more stupid as marketing decission from Atmel) as a result Microchip make few Million USD per year here and AVRs are know as some exotic things, yeah we know they are much better but nobody have seen them :)
direct, offer really
can be useful
this is absolutely possible in internet age, distributors were important before when the communications were not so developed, now there are online ordering, web forums, e-mail support (FAE may be located anywhere)
Best regards Tsvetan
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No idea but usually distributors are pretty good in making the contact. I have only used the 8051 family in the past because of 2nd source concerns.
Sometimes the best app support comes from newsgroups like this. It's give and take, somebody is always awake somewhere on the world. Unfortunately many groups are on Yahoo now and I find that interface to be a real pain.
Hmm. I can only talk about the situation here (western US) but when I needed support for a TI part and the questions were mostly about pricing, code protection and pre-flashing I was quite happy. Arrow was helpful and they pointed me to the right guy at TI when they couldn't answer a question. To me, whether the support person is an employee of the manufacturer or of the distributor doesn't make a difference as long as they all work together efficiently. Arrow and TI do that quite well, IMHO.
Anyhow, with tricky technical questions I always contact the mfg first no matter what. When they don't have any app engineers (seriously, that has happened...) I look for another part.
As long as Microchip increases their visibility it is probably an ok move.
I have lost all hope for distributor's FAE's. Unless the question can be found on a Quick reference guide the distributor FAE always passes my question on to a direct Factory guy.
So as long as Microchip sends fliers and pushes their products on their own... similar to Maxim.... They will do fine.
In fact I am a distributor FAE. And a damn good one if I might say so. (although good ones are becoming scarce these days). The missing details in your statement are:
1) Sales. Distributors are sales organisations that are often larger than the manufacturers they represent. They have buying power and if you play your cards right will save you money. You 5000pcs is chicken shit, pardon my vulgarity, to Microchip but the distributors business is not. Also, the (good) disty guys WILL sell you the right/best/cheapest part according to your requirements. They will beat suppliers against other suppliers to save money also (ethically questionable I know) Parts you might not be aware of yet. Parts they carry much stock of and are cheap. Parts that have been proven to wor in similar situations. Even taking risk out of a customer design adds value.
2) Supply chain Distributors (apart from the technical services) are paid to manage the supply chain. For significant business they obtain and manage customer forecasts, inventory, leadtime, credit etc on behalf of the customer. Good distributors can manage all these better than either the end customer OR manufacturer.
However, systems are maturing and things are clearly changing in this respect. Microchips move is a ballsy one which could go either way for them, in their highly competitive market. One bad step and Freescale, Atmel, Renesas, Zilog, Philips will happily eat their mkt share
I'd agree with this, and add a bit more. I much prefer to work with distributors, and only go to manufacturer specific support when necessary (and that's often in direct cooperation with the distributor's FAE). It's easier for development, and it's easier for purchasing for production. Suppose I'm looking for memory chip to put in a new design. Baring very special circumstances, I don't care if it is made by Samsung or IDT or anyone else. Rather than trawling the web, trying to guess what manufacturers might make that sort of thing, I can ring a couple of our biggest distributors and get the information I need straight off, including information I'd never get from websites (such as future plans for products). It's a little less clear-cut for microcontrollers, since I generally have a good idea of which chip I want for a particular design, but there is still a lot you can get from a distributor FAE that you can't expect from a manufacturer FAE. In particular, a distributor FAE will cover a wide range of products - if you talk to an Arrow or EBV expert on DSPs, he'll give you a comparison of chips. A TI FAE is not very likely to tell you when you'd be better off with a Blackfin.
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