RDRT may benefit from outsourcing in 1998
PC Industry Preps For Big Changes In '98
(12/22/97; 9:47 a.m. EST)
By The CRN Staff, Computer Reseller News
techweb.com
If you thought the PC industry is normally fast-paced, just wait until 1998.
A complete re-engineering of the supply chain is just one highlight of what is expected to be a year of dramatic change and transition. Other hot spots: the ongoing battle between the government and Microsoft, the introduction and acceptance of much faster systems, the growth of services on the Internet, and rapidly declining prices.
And those are only some of the planned events.
Unquestionably, the biggest area of change centers on channel assembly. If 1997 was the year in which the industry began seriously planning for the re-engineering of the supply chain, then 1998 will be the year of action.
By the end of the year, if industry executives and analysts are right, inventory days will be dramatically reduced, the supply chain will have become much more efficient, and any previous advantage held by direct manufacturers will have been eliminated.
"This industry is seeing as much change now as we've ever seen," said Bob O'Malley, president of MicroAge, in Tempe, Ariz. "It's going to be a different world at the end of 1998."
O'Malley said selective outsourcing in the high-end market will open up new sales opportunities, and on the low end, small- and midsized-business opportunities are going to "take off." In the midtier market, customers' buying habits will adapt to a channel assembly world, he said.
William McCracken, general manager of sales and service at IBM Personal Systems Group, in Somers, N.Y., said 1998 will be the year when the full effect of channel assembly and the re-engineering of the supply chain change the industry. By the end of second quarter, IBM will have transitioned its entire product line to new terms and conditions, including two weeks of inventory and two weeks of price protection, he said.
"This is our D-Day," McCracken said. "Our success or failure won't hinge on grand schemes or grand announcements, but on the minute details."
The industry as well as the government will keep a close eye on Microsoft. Windows 98 will -- if Microsoft has its way -- be its first operating system to be totally integrated with Internet Explorer. The U.S. Department of Justice may nip that plan in the bud if it succeeds in its quest to prevent Microsoft from tying the browser to the OS.
Throughout 1998, desktops will gain speed as Intel rolls out Pentium II processors that run up to 450 MHz. "It will be the year of the Pentium II," said Emilio Ghilardi, worldwide marketing manager for Hewlett-Packard's Vectra desktops. The same goes for Win NT.
And while processor makers look for ways to improve the platform rather than simply increase chip speed, VARs will continue to see slower-speed processors drop off the map.
By midyear, Intel said it expects to offer VARs a Pentium II solution from top to bottom. As a result, the Santa Clara, Calif., chip maker continues to ramp Pentium II volumes.
The growth of the Internet is expected to continue on its explosive path, but services are expected to blaze the trail. Delivering voice over IP networks, setting up customized channels, Web hosting, and enhanced security are just a few of the services being offered.
The coming year could also produce a fundamental realignment in the database market, as IBM and Microsoft ascend and Sybase and Informix Software stagnate, observers said.
-- This story was written by Eric Hausman with reporting by Craig Zarley, Margie Semilof, Shawn Willett, Kimberly Caisse, Stuart Glascock, Kelly Spang, Lisa Picarille, Scott Campbell, and Jeff O'Heir |
