Compaq moves more to Internet for EMEA channel

Compaq Computer yesterday announced changes in its sales and distribution model for Europe, Middle East and Africa (EMEA).

The new, Internet-centred distribution model is designed to reduce channel inventory, increase predictability of supply and accelerate the speed to market of its products and services, Compaq said in a statement.

The changes will be in place by the third quarter of 2000, according to Compaq.

The moves only affect distribution of Compaq's Intel-based servers and PCs, said Neil Marshall, Compaq's Director of Channel Strategy and Development for EMEA in an interview yesterday. The changes do not affect higher-end products such as Alpha servers, nor do they include consumer PCs.

Compaq has 20,000 resellers and distributors across EMEA, who also provide the bulk of Compaq's sales, according to Marshall. Under the new model, Compaq resellers will send business to Compaq and will be rewarded with a fee instead of directly selling the products to customers. Compaq will handle the delivery, financing and billing for the products.

Compaq will also seek to expand and widen its channel of distributors, Marshall said. New partners might include ISVs (independent software vendors), consultants or Web sites that direct sales to Compaq, Marshall said.

"We are not reducing the number of channel partners, absolutely not," he said.

Prices that customers pay throughout EMEA will also be evened out, with prices listed on the Web site serving as the reference price for all customers in the region. Right now, because of differences in economies and currencies, customers in some European countries pay much higher prices for the same goods than customers in other countries in the same region pay.

"We want to get to a consistent pricing across the region. The Internet is driving that," Marshall said.

Marshall did not know if the standard price on would be listed in euros or other currencies.

As for the new fee structure for partners, Marshall wouldn't give details but said Compaq had no choice but to be competitive with other manufacturers. "Compaq will remain competitive in the market place in terms of the way it rewards its partners," he said. Partners, he said, will no longer take on the risk and financial burden of buying the product from Compaq.

Certainly some customers will chose to buy directly from Compaq under the new plan, Marshall said. "If the customer sees value in the channel, it will continue to buy that way. If it doesn't, it will come directly to Compaq."

As part of the changes, Compaq's channel portal, CompaqConnect, will also be expanded. The site provides the channel with sales information, product catalog and lead referral, Marshall said.

Compaq EMEA previously announced a move to cut the number of distributors in each country to about three or four following disappointing results.

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