The Facts On Compaq's New Program
May. 07, 1999 (VARBusiness - CMP via COMTEX) -- Houston-Before launching its Distribution Alliance
Program (DAP), Compaq Computer Corp. studied distribution models from a variety of industries. Its
conclusion: Many companies adopt master distributor programs. Those that succeed preserve alliances.
Compaq's new program pledges to do just that.
The new Alliance Program is a North American initiative that involves only build-to-order Intel-based
computers sold to commercial customers, says Mike Pocock, Compaq's vice president of North American
channel sales. What it isn't is a worldwide initiative or one that involves products from Compaq's Tandem or
Digital product lines, the latter of which includes the Alpha-based family of servers.
At some later date, Compaq hopes to include those products in the program. Further, the company believes
certain consumer products will also be included, especially if some are folded into Compaq's commercial
line to accommodate CompUSA and others that resell both consumer and commercial products.
What prompted the change was complexity. "We ended up with 39 channel partners, meaning that they
could buy products in a buy/sell situation with Compaq at a U.S. level one price," says Pocock. "Quite
frankly, it wasn't a very effective model."
Compaq's system didn't help it compete efficiently in an atmosphere of price cuts and constant change.
Partners also exacerbated the problem by swapping products in and out of inventory to qualify for price
protection, creating what Pocock says was a vicious cycle of having too many products in the wrong
locations.
With Compaq's new program, each Alliance Partner will have a dedicated inventory analyst inside Compaq
and will interlock IT systems with the vendor as well.
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