Microsoft is closing in on its big dealers and forcing those which generate insufficient revenue to buy through distributors.
During the next six weeks, Microsoft's large account resellers (Lars) will be whittled down from about 25 to between 17 and 20 direct accounts.
According to one source, Microsoft sent out letters in January to certain Lars telling them that if they failed to improve their performance, their situation would be reviewed.
The decision has provoked anger among smaller dealers. One Microsoft reseller said: 'If I had four extra points through margin, and rebates through having a direct account, I'd be number one too. It will exacerbate difficulties and continue the unlevel playing field.' Another dealer said: 'Those that Microsoft knocks off will have their margin wiped out.'
Chris Lewis, Microsoft enterprise partner manager, acknowledged the Lar programme could be seen as contentious. 'There is some truth in saying it is an unlevel programme, but there are pros and cons for dealing on either side of the fence.
'We are not culling resellers, but we do see longer term Select business coming out of the top end of the reseller channel,' he said. Lars were chosen for their accreditation, use of electronic tools for reporting and volume sales, according to Lewis.
Ken Parkinson, sales and marketing director for Microsoft Lar Stream, praised the move, saying: 'They were spreading themselves too thin and we didn't get the incentives or the attention we deserved.'
Microsoft Lars contribute about 23 per cent to the company's overall revenues.
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