Resellers kept in dark by Compaq/Digital

Merger Rival companies look set to capitalise on uncertainty.

You would have thought that Compaq's acquisition of Digital for #5.5 billion would have been earth-shattering for the channel with seismic shifts in dealer territories, but not so - or not yet. After the big bang there is near silence with neither Compaq or Digital offering much beyond soothing murmurs of 'don't worry, it's business as usual'. However, there are tremors in the channel and they are getting stronger as the uncertainty continues.

Second guessing is taking the place of business planning as resellers wonder what fallout there will be from the merger - particularly over which product lines will disappear and how competition will turn into collaboration.

Mark Whiteman, sales director at P&I Data Services - a Compaq and Digital reseller - is positive about the merger but unhappy about poor communication: 'The move will give benefit to Compaq customers if Digital's MCS service arm is incorporated, but there is an air of mystery and polite waffle.

We are given general assurances, but we are concerned about how we will be looked after by the organisation.'

Concern that is shared with the customer: 'We have had a good relationship with Digital and have recently sold its PCs to the London Fire Brigade and Symons, which were part of the BA Group,' said Whiteman. 'It has expressed concern about the future of the product - particularly over the PC - and which badge it will have on the front. If it has to move over to Compaq it needs to build it into its plans and know for future proofing.'

He also pointed out that Compaq and Digital's 'paddling under the water - which we don't see - could drive customers to choose other manufacturers'.

The ripples in the water are already attracting the fishermen. Many resellers have been approached by vendors eager for a fresh catch, and some fishing has come from surprising quarters.

'We have been approached by four or five companies and one of them is a direct player,' said Andrew Robins, business development manager for PNC, which primarily sells Compaq but also works with Digital. 'You don't have to guess who the big one is - it is good at putting boxes on desktops, but lacking in the service it provides.'

Rumours feed on uncertainty and one of the most damaging rumours to the vendor/manufacturer relationship is speculation that Compaq will push more of its business direct. Barrington Johnson, MD of computer reseller Lanz, fears that 'Compaq partnering a big reseller will be the next move.

The named reseller will get the special buy. Most manufacturers want to cut us out because of the PC price drop, but they can't because we speak to the customer and give the service. Compaq would be cutting its own throat.'

Fears like these mean that many resellers are looking to distributors for some reassurance, but they are unable to provide it. Joe Hemani, MD of Westcoast, which does not distribute Compaq product, said: 'Sometimes resellers encourage us to feed them a line - they ask us to manufacture information, but we haven't got privileged information.'

Like everyone else, Hemani can only make educated guesses: 'At a Wintel level it will not have two brands fighting each other. On the PC boxes, Digital has been playing catch up, but with the high Alpha server technology, Digital is a market leader.'

Aside from speculation - what action have dealers been taking in the lull? Mike Cohen, group sales and marketing director for Digital reseller CSF explains: 'We are predominantly a server-based product company and don't have to worry about the likelihood of Digital's Venturis range disappearing at desktop level. What we are doing is ensuring that our people are as knowledgeable about the complete Compaq portfolio as they are on the Digital side. We are sending our engineers on extra short-term training in the next couple of weeks.'

So, it's not quite business as usual. Dealers are responding with positive caution. There is hope that the merger will focus on the strengths of both companies and that there will be less duplication of resources if only Compaq creditation is necessary. Barry Dodhia, marketing manager at Hemini, points out: 'High-end people are not productive for the company when they are away taking examinations.'

Ultimately, however, communication is what is appreciated. Dodhia said: 'We were very sceptical about the whole monopoly thing at first, but a Compaq representative came in and we now have a clearer understanding.'

Ian Jackson, Compaq channel sales director, said: 'I understand resellers' concerns, but it's impossible for me to comment. If decisions have been made in the US, it's at the highest level and we don't know in the UK.' He added: 'It's business as usual.'

Until the actual deal between Digital and Compaq is finally given the all-clear, resellers and distributors will remain in the dark as to what is going to happen in the future. And in the meantime, rival manufacturers will have a field day preying on the uncertainty.