Falling off the bandwagon

Although ten years earlier they might have been more inclined to nuke each other, Perestroika - if nothing else - helped encourage Maggie Thatcher and Mikhail Gorbachev to be comrades in arms - Russia's charismatic former leader bringing an almost amorous glint to the Iron Lady's eye.

Quite whether it will end up with the pair hurtling around the campus ballroom at Fairfax County's George Mason university, locked together in a knee-yanking Cossack dance like a pair of manic Munchkins, is sadly doubtful.

What is certain, though, is that the IT industry is now officially classed as the world's biggest industry and, with the help of a few well-oiled cheques, can command the best-known names. As you read this, the World Congress on Information Technology is winding up, a seminar in which Maggie and Gorbie are the twin stars, even eclipsing illustrious industry leaders such as Michael Dell and Larry Ellison.

The objective of the three-day event is to understand what customers really want. It's a good question, and one which increasingly impinges on the PC channel as computers become perceived as commodities, such as washing machines or TVs. Two factors - the internet and plummeting hardware prices - are exerting a pincer effect on dealers, while simultaneously unsettling relationships with suppliers. A case in point is Compaq - at pains to stress that it will still support resellers, despite the pressures.

But as with football managers assured they have the board's full confidence, it's time for the channel to start worrying.

Item one: Compaq's acquisition of Digital and Tandem will cost dearly and, as the company moves into the enterprise stream - an area traditionally serviced directly - it would be natural for Compaq to consider doing likewise with PCs, especially when rivals such as Dell are increasing their market share with direct, build-to-order strategies.

Item two: The internet further facilitates the build-to-order model, with Dell's Website now incorporating self-diagnostic tools and an archive detailing more than 35,000 products dating back to early Intel 8088 processors.

Item three: Compaq's axing of more than 2,000 workers will drain company coffers further through redundancy payouts. With hardware margins under pressure, savings must be made elsewhere - and Compaq has already stated it will now accommodate customers 'by whatever means necessary'.

Put all three together and, by my reckoning, Compaq dealers should be donning the tin helmets. If kit can be configured at the factory for internet sales, why shouldn't Compaq apply the same rationale for bypassing the channel? Whereas once configuring might have been the lucrative prerogative of the dealer, in future his role might be relegated merely to sourcing and post-sales servicing - a sandwich with much of the meat left out.

Pass the vodka, comrades!

Dave Evans is a freelance IT journalist.