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17 Jul 2006
Microsoft has begun to re-evaluate its UK distribution strategy in a move that could see existing distributors stripped of their contracts, CRN has learned.
The vendor, which last week held its Worldwide Partner Conference in Boston, has begun sending 25-page documents to existing and potential distributors asking each to assess their unique proposition and worth within Microsoft’s route-to-market.
Earlier this year the vendor played down speculation that it would slash UK distributor numbers during a partner review (CRN, 2 May).
However, Steve Haddock, partner group manager at Microsoft, admitted that this latest strategy review could result in the creation of new authorised Microsoft distributor contracts and the termination of existing ones.
“We don’t know if we will lose or gain distributors yet, or how many distributors will be affected,” he said. “However, I would be surprised if a change in distributor numbers didn’t happen. We have not looked at our distributors in detail for some time.”
Over the coming weeks, selected distributors will also be invited to present their proposition to Microsoft. Creation or termination of distribution contracts – some of which are believed to be worth between £2m and £3m a month – will be announced next month.
“We will look to change what [products] our distributors are carrying [if necessary],” Haddock said. “If a distributor is revealed not to be strong enough in one area, such as licences, then we will swap their range to have it focus on its core strengths.”
One source who asked to remain anonymous told CRN: “It is our understanding that Microsoft is re-evaluating its route-to-market through distributor questionnaires. I can see Microsoft fragmenting its distributor contracts, because that is the way many vendor contracts are going nowadays.”
Steve Lockie, managing director of broadliner Computer 2000, welcomed the move.
“When firms won Microsoft distributor contracts in the past, it was for a good set of reasons,” he said. “But are they still valid? Are they still doing what they said they would do?
“It’s not a bad idea for Microsoft to make sure it is still working with the right set of partners.”
james _sherwood@vnu.co.uk
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