DEALER PROFILE - Panacea - Fighting to stay on the middle course

Company founded 1992

Headcount 35

Board members Anthony Bright, sales director; Peter Stroud, technical director; Richard North, non-executive director

Company year end 31 March

Turnover £11.2 million

Net profit £900,000

Reseller base City of London

Other locations Opening in Birmingham in April/May 1999

Main lines sold Compaq, Microsoft, Novell, Toshiba, IBM, Hewlett Packard, Digital, Intel

Accreditation held Compaq systems reseller, Compaq Care Partner, IBM business partner, Microsoft solution provider partner, Intel OEM

Key accounts National Grid Company, Statestreet Bank and Trust, Credit Suisse Asset Management

Main distributors Computacenter distribution, CHS Electronics, ETC

Why don't you use the top two distributors? When we were deciding which ones to use, we invited tenders for our business and put it out to a dozen or so distributors. Then we interviewed the top three or four with their proposals. The companies we use presented the best overall service.

How did you get Richard North on board? We were one of Merisel's accounts when he was managing director of Merisel UK (which is now owned by CHS.

I met him through that business relationship.

Main rivals Info'Products, Elcom, Bytes Technology Group

Main role of distributors They are good as a logistical site and warehouse for stock. Unfortunately they lack good quality sales staff.

Another problem is, they don't understand the reseller market. Distributors also lack client loyalty - they only care about figures.

Issue that would make life easier from a business point of view One of the problems at the moment is the great difficulty in obtaining a high level of staff. In the channel, many individuals have an inflated worth of themselves.

Like who? We see engineers who have been in the market for six weeks, think dot matrix is a character from EastEnders and then ask £25 an hour for contracting work. This inflates the worth of everyone.

In my opinion, non-structured contracting has created a mass market of expensive labour for little return other than reducing corporate headcount to please shareholders.

Project-related contracting is the only effective means of substantiating the costs.

Panacea's main challenge over the next year Internally, it will be opening the Birmingham office. Externally, it will be getting to grips with issues such as Emu.

What other problems do resellers face? We are preparing ourselves for the year 2000. Personally, there are two places I would not like to be at the stroke of the millennium - at 35,000ft in a plane, or on a life support system.

Apart from that, I don't think it will have a immediate effect on business.

Companies that work with long-term budgets, or the health service, could be affected as time progresses.

Why is it such a big issue in the channel? There's no question that the issue had been inflated, but to what extent will remain unknown for the next five years. But it has created a growth industry, mostly out of fear.

Comment on Compaq launching its Web-based systems integration tool (PC Dealer, 9 September) I'm in favour of it. The only people who will go into Compaq online are the customers who are unsure of themselves - small businesses and so on.

Hopefully, they'll gain confidence from Compaq, with good understanding and proper information. Then, when the potential client approaches the reseller, they won't be completely cold.

Do you worry about vendors having direct contact with customers? The only manufacturer I worry about at present is Microsoft. Everything it does to promote its products strikes me as just a way of snaring our clients over the long term.

So is Microsoft trying to eliminate the middle man? Of course.

Give your opinion on the Fujitsu plant closing down in Tyneside (PC Dealer, 9 September) It is always sad to see the closure of these factories, especially in areas where they have experienced such hardship in the past.

You would expect it in a decaying chip market, like in the Far East where the economy hangs in the balance, but not here. Manufacturers are trying to re-balance the economy by falsely creating a glut which will enable them to increase pricing as demand soars.