`Price war'
The latest issue of Microscope, a UK dealer channel weekly, carries
the headline of `Vendors urged to halt price war.' The weekly paper
says that the PC price war seen in the US this last six months has
found its way to the UK channel since Christmas and, not
surprisingly, it's been bad news for the dealer channel as a whole.
The price war is little more than a blood bath. In January, we
bought a 350 MHz Pentium II system - minus monitor - for around the
550 pounds mark. Today, in early April, that same machine is now
around the 350 pounds mark - the same price as a Celeron 333 MHz
basic system with 32 MB of memory and low-specification graphics
card was back in January.
The price war has just claimed its first major PC casualty of the
year, as Apricot Computers is no more (see next story). Considering
that Apricot was one of the first PC vendors in the UK in the
mid-1980s to compete with IBM and Compaq, that is a shame. Other PC
vendors are equally close to their parent firms pulling the plug.
And yet, the price war continues...
Mitsubishi pulls plug on Apricot
Mitsubishi, the Japanese parent to Apricot Computers in
Birmingham,has announced it is closing the operation. The news is
a sad day for the UK channel, as Apricot was one of the early
innovators and competitors to the IBM/Compaq cartel in the channel
in the mid-1980s.
Plans call for Apricot's Glenrothes, Scotland-based plant to be
shut down and sold off by the end of June, while the company's R&D
plus sales operation in Birmingham will also close.
Apricot was acquired by Mitsubishi nine years ago, when profit
margins were 10 or more times what they are today on PCs and
servers. Alistair Carvlin, the firm's UK marketing director, said
that the closure is a sad day for the firm, "but the economies of
making PCs and servers have proved to be too much."
In many ways, Dealer Info notes, the writing has been on the wall
for Apricot for some time. The cracks started to appear when three
senior executives, including Brian Androlia, one of the driving
forces behind the company, left in the summer of 1997. In August of
that year, Apricot slashed the number of resellers it supplied
direct, to cut on support costs. Last year, meanwhile, saw Chris
Buckham and James Blackledge - the two remaining veterans - leave
the firm.
HP discovers Disaster Recovery
After several months of seeing its channel-sold PCs undercut by
several other brands, Hewlett-Packard seems to have woken up to the
idea of adding value to its existing peripherals.
The firm has just unveiled what it claims is the industry's first
Disaster Recovery (DR) enabled tape backup drives. According to the
company, the system is easiest-to-use DR solution in the industry
Plans call for the one-button DR feature to be included as standard
on HP's SureStore DAT8 and DAT24 drives in May of this year. Jack
Trautman, general manager of HP Computer Peripherals, said that DR
is a critical part of a business' survival plan, yet it can often
be a complex procedure absorbing an IT department's time and
resources. "Now, however, we're able to offer businesses an
amazingly straightforward and robust solution. This is truly an
industry first,"he said.
In parallel with the shipment of the new value-added DR tape
systems, HP has souped up its reseller support services. The move,
the firm claims, makes it easy for resellers to develop their own
service and support business, through new `business builders,'
which help resellers plan and deploy remote support services.
Backing up the business builders is a new customer finance
programme, which HP says is an Internet-based programme that gives
resellers a faster and more convenient way to develop financing
proposals easily and more quickly.
Also new for resellers is what HP calls its ProfitEngine, a service
that is available under the firm's Spotlight programme. The service
is billed as providing resellers with comprehensive marketing
materials to develop `professional multi-product sales proposals'
and to implement marketing activities such as direct mail,
advertising and seminars cost-effectively.
RBR Networks offers advice to resellers
RBR Networks, the networking distributor, has published a free
guide for resellers on how to choose a distributor. While the guide
is obviously a raa-raa for RBR, officials claim that it will prove
very useful to resellers in explaining how distribution really
works.
According to Jos White, the firm's marketing director, the guide is
aimed at resellers across all sectors and it outlines the criteria
that separate the `box-shifters' from the value added distributors.
White said that the guide outlines `must have' criteria, such as
vendor-focused technical support and infallible stock availability.
It also details the `added value' services which make some
distributors stand out from the rest. These, he explained, include
specialised reseller training, 24-hour hotlines, and marketing
support schemes.
"The channel has been suffering from a bad reputation in terms of
service levels for far too long," said White, who added that it is
high time that the channel woke up to the fact that providing
unbeatable service is the only way to guarantee reseller loyalty,
and
that reseller loyalty is the key to success.
"This guide is designed to aid resellers in separating the men from
the boys in the distribution world, as customers demand improved
service levels from the channel," he explained. "There are some
questions resellers should be asking, regardless of whether or not
they choose to work with us," he said.
Sphinx scoops IBM's top distributor award
Sphinx CST, one of the longest-running distributors in the UK
channel, has scooped IBM's top distributor award. Normally such
awards are little more than huff'n'puff for the companies
concerned, but the IBM award is one of the most revered in the
industry.
According to IBM, the award was given after the distributor tripled
its Big Blue products turnover last year. Growth continues,
officials say, and the distributor is said to be on target for a 50
million pound turnover this year.
As well as tripling its IBM business, Sphinx introduced five new
IBM brands to the market - not bad when you consider that the firm
was a simple RS/6000 single line distributor in 1997.
Kevin Bishop, IBM's director of channel sales, said that the
distributor is something of a role model for value added
distribution. "They are totally channel-focused, and know that the
only way to continue to win business is by providing IBM resellers
with the service and support they need to be profitable," he
explained.
Fujitsu unveils Perpetual Computing
Fujitsu has launched a new range of Pentium III Xeon-based servers
to the reseller channel, under the theme of `perpetual computing.'
The concept of always-on servers has mostly been restricted to the
high end of channel server sales, usually including fault tolerant
technology, but Fujitsu claims that its sales strategy is to market
the new servers as a mass market server solution.
Mark Pini, the firm's product business manager, said that the
perpetual computing strategy aims to allow resellers to market
24x7, 365 days a year in-use servers. The strategy, he explained,
encompasses not just component resilience, but also a variety of
critical areas including vendor stability and longevity, as well as
compatibility with third-party products and a reduction on the
total cost of ownership (TCO).
"Fujitsu is one of the first companies in the world to make Pentium
III Xeon systems available," he said. Pricing on the new servers
starts at 5,399 pounds for a 500 MHz system with 128 MB of memory,
ranging up to 13,299 pounds for a data centre system with a 2 MB
cache and 256 MB of memory.
Apricot Computers, 0044-121-7177171 (GB);
Hewlett-Packard, 0044-1344-360000 (GB), http://www.hp.com;
RBR Networks, 0044-1285-647000 (GB);
Sphinx CST, 0044-1629-736200 (GB), http://www.sphinxcst.co.uk;
Fujitsu Computers, 0044-1344-475000 (GB), http://www.fujitsu-computers.com