Update: Compaq drinks Sweetwater

Compaq has today revealed Sweetwater will join its distribution ranks in a decision likely to create confusion in the channel.

As exclusively reported by ARN last night, Sweetwater has been formed by the head of IT distributor Triforce, Abbas Aly.

Labelling the company as an "aggregator", Compaq general manager of business Greg Healy this morning told ARN that Compaq has appointed the new company to target Australia's large small business sector, initially with two product lines, Deskpro SB (small business) and Armada 100s. And while Sweetwater will initially focus on these products, Healy refused to rule out an expansion of the product lineup.

"They are the prime products we want to get to these [small business] customers," he said.

When asked about the new addition to Compaq's channel, Tech Pacific managing director David Cullen said he only became aware of the outfit 48 hours ago and is seeking clarification from Compaq.

"I think there is potential for confusion and I'm sure [Compaq] will clarify it very quickly," he said.

Cullen also questioned the use of the term "aggregator", calling it an "off the cuff" term and a "good answer to create confusion". "It has no real meaning behind it," he said.

Healy was careful to explain that the decision follows six months of research into how Compaq can more effectively target the small business segment. As an aggregator, Sweetwater is a "distributor in nature", but explained its specific focus and approach to market is different to that of its existing distributors such as Tech Pacific and Ingram Micro.

"We don't want to position [Sweetwater] as another distributor," he said. "Sweetwater will meet a very specific need."

Healy said the company's unique proposition is its existing business relationships and "terms of trade".

Compaq is also keen to communicate that the partnership with Sweetwater is simply part of its ongoing drive to overtake whitebox PC sales in the small-to-medium business market. "I see it as business as usual," Healy said.

When asked what impact the new company will have on existing distributors such as Tech Pacific and Ingram Micro, he agreed the companies will work side by side. Healy would not be drawn, however, on ARN's suggestion it indicates Tech Pacific and Ingram Micro have not successfully sold the Deskpro and Armada products. "They've had access to those products for some time," he said.

Aly this morning distanced Sweetwater from his other company, Triforce, but did not detail any further information about the company. "Sweetwater is not owned by Triforce," he said.

Healy said Aly has a "range of organisations" and Triforce will remain one of them. "Sweetwater will meet a very specific need."

And when asked by ARN, Healy said Compaq is not financially backing the company and does not require it to exclusively stock Compaq product. "We don't invest in the independent channels out there," he said.

"We don't force sole relationships on independent channel companies."

Meanwhile, in other news, Greg Healy will today assume a new role as general manager of enterprise.

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