Clearout and consolidation are the watchwords for the most recent channel activities.
Ingram Micro's belt-tightening in the US eventually made itself felt in the UK, with the departure of short-lived managing director Sandy Scott. The situation came to a head last week following comments made recently by Robert Grambo, European chief executive of Ingram, in which the distributor's UK management was mentioned in a not too favourable light.
The ins and outs of the final decision are not clear, nor are the implications for Ingram in the UK. Scott was brought in to cut overheads in March 1998 and almost 100 staff left within the first six months of his tenure. That said, Ingram's call centre, which allegedly cost a whopping £5 million, flew in the face of those cuts and did not cut a pretty figure on the balance sheet.
However, the call centre alone cannot account for Grambo's comments, indicating problems with how things at Ingram UK are being run. It's doubtful that changing the managing director is going to be the only change at Ingram UK and the new man, Meinie Oldersma, probably has a tight brief as to what to do to turn things around. Let's hope it doesn't include axing another 100 staff. That said, is anyone interested in buying a state of the art, but somewhat pricey, call centre?
It's all change at Compaq as well. Despite ridding itself of its most successful chief executive, Eckhard Pfeiffer, and losing a number of senior executives in his wake, the vendor has made sweeping changes to how it plans to deal with its US channel. Like movies, those changes will probably take months to reach the UK, but they will arrive over here eventually.
Gathering its nearest and dearest, Compaq announced it was cutting the number of channel partners it will work with directly from 39 to just four. Only Ingram, Inacom, Merisel and Tech Data have been given the golden seal of approval to buy directly from Compaq. As can be imagined, the four horsemen of Compaq will be the only point of contact in the US for the fallen distributors, corporate resellers and direct response/retailers. And despite the severity of the changes, Compaq claims that they needed to be done for efficiency's sake.
The number of Compaq's US stocking locations will fall from about 100 to 30, which the vendor claims will slash channel inventories by about 50 per cent - a problem that Compaq cites time and again when its figures are poor.
There's no doubt that something needs to be done. But while Compaq may have decided that this mass rationalisation of its US channel is needed to bring its efficiency closer to that of Dell, moving one step back from the channel sends the wrong signals to all of the others. The vendor has assured those not picked for stardom that they will not be 'de-authorised', but will have to create alliances with the big four.
We have heard nothing yet of how far the US changes will stretch, but it will be surprising if the consolidation there is not mirrored somehow both in the UK and Europe. Considering how much of Compaq's business is now based outside of the US, its key European markets must also be in for shake-up.
Security firm set to become part of acquisitive Shearwater Group
Distributor merges three northern sites into one new hub in Warrington
Activist investor puts forward five director candidates as turmoil continues at security giant
Nima Green asks what is driving public cloud uptake in Germany