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Gold Column

Compaq's Phil Starmer is a shrewd guy. As well as setting up a Compaq's e-procurement service for major customers, something that - in theory, at least - shouldn't cause too many ripples in his UK reseller channel, he is also looking to the future of dealers.
At the E-Business Expo show in London in early November, he revealed that Compaq branding and packaging could eventually be handed over to the distribution channel.
According to Starmer, distributors such as Ingram Micro are well- equipped to handle such a task, leaving the PC vendor to pursue other areas of revenue production.
"The value a customer perceives they are getting is being transferred from the component manufacturer to the company that delivers the service," he said, adding that branding of traditional manufacturers - even Compaq - will transfer over time to distributors that can really add that service level value.
This hardware trend, he explained, is one that Cisco has followed in recent years, with the networking firm becoming almost invisible as far as end users are concerned.
This isn't as far-fetched as it sounds, as Starmer predicts that, when distributors take over the branding an packaging of PCs, they will also be manufacturing - or arranging the manufacturing - of the hardware.
Cisco, he explained, has become a virtual producer, ceasing to produce much in the way of hardware, allowing it to concentrate on software, research and development, and marketing. Other areas such as order taking and customer service remain with the company, meaning that the distributors shoulder the mantle of manufacture.

Compaq prepares Web buying service
Compaq may be about to upset its dealers with a new Web procurement program doe major business customers. The idea behind the scheme, reports suggest, is to allow Compaq to tap into the same direct sales model that Dell and Gateway's sites have enjoyed.
Dell and Gateway, however, only have a few indirect dealers, mostly in the value-added arena. Compaq has many more in the mainstream dealer market, so it's running a risk of alienating such resellers.
Phil Starmer, the PC vendor's e-business manager, is quoted in the latest UK trade papers as saying that the revamped Web service will not affect dealer relationships currently in place.
"We will do nothing the endanger the relationship we have with our channel partners," he said, adding that the Web site service is unlikely to extend beyond more than 30 major corporates.
This will come as a welcome relief for Compaq's dealers, as the vendor already direct-sells into its very large accounts. If what Starmer says its true, the the site should not affect dealers - at least in the short term.

Compaq UK. 20-8332-3000, www.compaq.co.uk

PC sales picking up in UK and Europe
Figures just in from IDC (www.idc.com) will bring good cheer to the reseller channel in Western Europe, as the research firm says that the third quarter of this year saw PC sales increase by 13 per cent in the Europe, Middle East & Africa region.
The figures could have been higher, however, as sluggish business demand for desktops and servers, coupled with a strong dollar, apparently held back sales.
In Western Europe, IDC says that PC sales increased 11.7 per cent, thanks to recovering sales after the Y2K-induced sales slump of earlier in the year, as well as buoyant sales in the UK's business sector.
Karine Paoli. manager of IDC's EMEA PC group, said that corporate and medium-sized businesses have clearly marked a pause in their hardware renewal cycles throughout 2000.
"If we are starting to see desktop and server investments slowly picking up, we do not expect any significant rebound in business demand and/or Windows 2000 rollouts before the first half of 2001," she explained.
According to Paoli, the shift in demand toward more notebook purchases is expected to continue and, despite the current weakness of European currencies, consumer sales are doing well, driven by healthy demand for Internet services.
Interestingly, IDC reports that notebook shipments were up more than 40 per cent year-on-year during the third quarter, driven on by strong business and consumer demand.
Andrew Brown, IDC's research analyst in the PC division, meanwhile, says that major investments in notebook replacements ahead of desktop machines, improvements in total cost of ownership issues, and decreasing prices are continuing to drive notebook sales in the business sector.
Delving into the figures reveals that Compaq retained its leadership of the EMEA market, as well as in the UK, although slow commercial desktop and server sales affected the leader's overall performance at 7.9 per cent year-on-year growth.
Fujitsu-Siemens was ranked number two in EMEA although growth was negative, as the vendor's results were seriously affected by the weakness of the German business market.
Dell was hit by its soft performance in the UK, as well as its shipments in France and Germany, meaning that the direct sales leader recorded only a 4.1 per cent unit growth year on year.

Microsoft scores with easyEverything rentware deal
Microsoft has announced plans to extend the embrace of its rentware concept to allow customers of easyEverything, the world's largest chain of Internet cafes, to access Microsoft Office 2000 across the Internet.
easyEverything, which already has 12 outlets across Western Europe, was scheduled to open its first US outlet in New York at the end of November.
The easyEverything chain of Internet cafes is a spinoff of Easyjet, the UK and European airline which is currently preparing for an IPO (flotation) in the UK. Plans are also in hand for the easyEverything Internet cafe chain to go for an IPO.
Under the deal with easyEverything, Microsoft will allow users to rent access to the usual Office 2000 applications, such as Word, Excel and Powerpoint, on a `pay per use' basis for as little as one pound or its local equivalent.
This is the first time that Microsoft have allowed their office software to be `rented' by consumers instead of them having to buy a perpetual licence in a shrink wrapped box.
Plans call for Office 2000, Works Suite 2001 and Encarta 2001 to initially be available through the easyEverything Internet cafe when it opens in New York Times Square on November 28.
With 800 terminals open 24 hours a day, easyEverything says that will be the world's largest Internet cafe. Plans call for future US cafes, as well as the chain's European cafes, to be equipped with Microsoft rentware in due course.

easyEverything 20-7482-9514, www.easyeverything.com

NETnet offers IT dealers new telecoms deal
NetNet, the new name for WorldXchange, the UK's discount telephony carrier, has relaunched its dealer campaign with the appointment of Jeanette Leigh-Betts as national dealer sales manager.
Leigh-Betts, who was previously dealer manager for the carrier's London and South Eastern region, is setting up a nine-strong team dedicated to growing and developing the company's UK network of dealers.
Chris Riggs, NETnet's sales and marketing director, said that dealer sales are now a large source of revenue for the company.
"We recognise that to succeed we need to offer something unique which gives us competitive advantage. That means investing in experienced people like Leigh-Betts and providing the right administrative support, funding, training programmes and recruitment assistance," he explained.
NetNet says that it has invested more than #130 million in its UK and Western European network, with its own digital switches in 23 major cities across the continent. The plan now is to sign up dealers to sell its telecoms services across the UK.

NetNet 20-8400-4400, www.netnet.co.uk


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