Vendors go online, buyers look for service

Leading hardware vendors scrambled to include an online presence in their marketing strategies over the last couple of months. While not directly selling yet via the Internet, it is certainly on the cards for the future.

IBM, for instance, has a message on its site with an invitation to buy "direct from IBM by shopping in our online store" and the now-familiar shopping cart appears in the top right hand corner of its site.

However, although you can buy direct from IBM, there is also an option to "buy from dealers" as well. Select "Australia" to view your purchasing options, though, and you find yourself redirected to IBM's contact details.

This seems to be the strategy for the time being from vendors that traditionally rely on their reseller channels for the bulk of their business. Compaq's channel, for example, accounts for 95 per cent of its sales.

Although Compaq's Web site is mainly an information source at present, there are plans for a direct sales model by the end of the year, according to Anne Eckert, Compaq's marketing manager.

The dilemma, however, is selling direct to customers without alienating the reseller channel. "Compaq already has an extranet in place for our major customers who are also in contact with our account managers," Eckert said.

"However, we have not yet worked out the finer details of the integration of a direct online sales strategy with our resellers' network," she said.

The message from buyers in an increasingly commoditised market is that service will play a significant part of direct online sales.

Steve Bayliss, information services manager for Coffs Harbour City Council, said: "When we look for equipment, we are not just buying hardware.

"We are looking for advice and service also. In this regard I don't think the online strategy will work for some vendors," Bayliss said.

Service is exactly what Compaq hopes to offer customers in its future online strategy. "The online model will make it easier for customers to do business with Compaq," Eckert said. "We will be offering service as well as products, such as financial services."

Peter Kazacos of Kaz Computer Services, is concerned with the level of service vendors will be able to offer.

"It depends on how far vendors extend their model," he said.

"We are ambivalent on who actually supplies the hardware, and as the margins in selling desktops are so low, suppliers have been forced into a direct sales position," he said.

"However, if that model extends to the service base we would be very worried because this is where the channel can add a lot of value," Kazacos

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