If I was one of CPQ's channel partners, I'd be looking for another partner.
Fez
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Compaq CEO Says Gloves Are Off
(08/04/99, 3:18 p.m. ET)
By T.C. Doyle, VARBusiness
Michael Capellas, Compaq's newly appointed CEO, said the time has come for theailing PC and systems maker to "give them hell in the market."
Them, of course, is Compaq's competitors. But partners gathered in Chicago at the Houston company's annual PartnerVision conference are keen to learn if "them" applies to members of the channel -- i.e. resellers, VARs, and other distribution companies. These entities know that changes at Compaq -- namely the company's expressed desire to increase direct business from 15 percent to 40 percent of overall sales -- will undoubtedly affect them.
On Wednesday morning, Capellas devoted much of his first keynote address as Compaq CEO to reassuring members of the channel that their interests will be preserved. BAD MOVE!!!!!
Among other things, he outlined how Compaq will take ownership of key accounts, including those currently managed by channel companies.
"We have to take ownership of major and global accounts," Capellas said, adding that the company needs to take more business direct to remain competitive and build a more efficient fulfillment model.
For the 70 to 150 global accounts, Compaq wants to own end-to-end fulfillment. Of its 5,000 named accounts, Compaq wants to own and manage approximately 2,000 of them. The company said it expects its partners to satisfy the needs of approximately 70 percent of the next tier of commercial enterprises, while handling 30 percent of these organizations itself. The same is true for the surface-mount board market, where Compaq expects to fulfill approximately 30 percent of orders directly via its enhanced e-commerce websites.
"These are the targets we have," Capellas said. "We have established that with our sales force, so we have a clear accountability as to exactly what our objectives are and, in fact, with each of these accounts, there's additional opportunity for additional value-adds."
He said the company will play a strong role in e-commerce, and outlined plans for each of the company's three divisions: enterprise, commercial, and consumer.
Capellas also said he expects the company to play a larger role in helping customers adopt repeatable solutions and end-to-end service. Echoing a statement of Intel president and CEO Craig Barrett at last month's CA-World in New Orleans, Capellas said Compaq is poised to take advantage of the fact that 90 percent of all the servers needed to satisfy demand for e-commerce solutions have not yet been built.
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