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To: Kenya AA who wrote (49291)	2/23/1999 2:50:00 PM
From: John Koligman	Respond to of 97611

Channel/PC comments from IBM... John IBM Execs Predict More Channel Consolidation (02/23/99, 10:44 a.m. ET) By Craig Zarley, Computer Reseller News IBM Corp. executives expect more consolidation to hit the channel this year as profitably concerns hit both corporate resellers and distributors. IBM Chairman and Chief Executive Lou Gerstner, in his keynote address at the IBM Business Partner Executive Conference here said the changing nature of the industry, including the Internet and the move toward enterprise solutions is putting pressure on some business models. "The PC is not any more dead than the mainframe," he said. "But the PC's reign as the center of gravity...that day is done." Gerstner added that "the net is putting pressure on distributors" and new business models must evolve. Likewise, Bill McCracken, general manager of marketing and strategy for IBM's Personal systems group, said he could argue with channel partners over "this is the way it used to be, but that's a losing proposition," he said. Channel executives said one of their top concerns going into BPEC was talking with IBM to determine how they can increase the profitability of the channel. "They should be concerned; we're going to lay all the cards on the table," said bob O'Malley, chief executive of Pinacor Inc., Tempe, Az. Likewise, Tony Ibarguen, president of Tech Data Corp., Clearwater, Fla. said one of IBM's main concerns would be how to address the profitability of some of its largest business partners. Another channel executive, who asked not to be identified, said that IBM should be concerned that more consolidation will impact the ability for IBM to deliver solutions in large account. He noted that while IBM may direct engage some large accounts, the vendor lacks the ability to logistically configure and deliver many of the building blocks of the solution. "IBM needs the channel more than the channel needs IBM," he said. McCracken said, however, that he wasn't concerned about lack of configuration and other logistical capabilities. "The capacity is there; it's not problem," he said. He added that there is little IBM can do to stem the tide of channel consolidation. "It will take its own course," he said. Related Stories: IBM, Red Hat Deal To Be Finalized IBM Embraces Storage-Area Networks Search Archives