Ali,
Right timing by Compaq to capture the retail space that IBM is going to vacate -
Change of plan: Compaq woos resellers zdnet.com ______
After building up its direct-sales effort, Compaq realizes its future success depends on its channel partners.
Compaq Computer will take a giant step backward from selling direct, as it launches plans to re-cement relations with its resellers through a beefed-up leads-referral program and add
fulfillment services for resellers' Web sites.
The moves represent Compaq's recognition that one of its key market differentiators is its channel, and that the vendor's future depends on resellers. The company has been trying to fine-tune a model in which Compaq (NYSE:CPQ) sells more computers, its resellers sell more services and other vendors' products, and its customers get more than they would by buying over the Web.
Under the gun
Given its lackluster financial results in recent quarters and some high-level executive departures, most notably CEO Eckhard Pfeiffer, Compaq has been under the gun to make significant changes. The company's stock price was hovering at about $22 late last week, down from a 52-week high of $51.25.
"Whichever vendor gets to the hybrid model where everyone wins will explode over the next decade," says Kyle Ranson, Compaq's director of North American sales and head of a new, as-yet-unnamed organization that will combine the vendor's direct and small- and midsize-business (SMB) efforts into a single unit. He notes the new emphasis is on quickly getting lead referrals to resellers for sales that involve more than just box pushing.
"If you step back and (ask what Compaq's advantage is, it's our relationship with the resellers," Ranson says. "If a customer buys direct from us, and it's more than just a stand-alone PC, we're going to figure out a way to weave in a partner. We'll introduce the customer to the solution-provider partner and get the lead out to the solution provider."
Compaq's change of heart didn't happen in a vacuum, however. The company had been sparring with its reseller council for months before the latest plans were hatched.
"What the council said was that whatever initiative you come out with, make it consistent," says John Couvrette,president of Logic Technology Partners, a San Diego-based Compaq reseller that focuses on the SMB market.
"I've told them to go ahead and book business direct. If you don't, Dell will, so go ahead and close the business.But then tell us about it. There's no telesales person who can sell better than I can face-to-face."
Past difficulties
Couvrette says one of Compaq's shortcomings in the past was that it was difficult to do business with. He says that's changing rapidly, and the new plans are a big step in that direction.
Compaq also will be working with its Commercial Distributor Alliance Partners -- namely Inacom, Ingram Micro, Merisel and Tech Data -- to provide back-end fulfillment services for resellers' Web sites, says Ranson.
The goal is to make the ordering process as seamless as possible, so end users can log onto reseller sites and order products without knowing or caring who's actually fulfilling the order.
zdnet.com ________________________
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