Microsoft is squeezing its distribution partners by taking sales of its software direct to large high street retailers.
Computer Reseller News can exclusively reveal the information after being contacted by an industry source upset with the deal, which will come into effect on 1 March.
The Dixons Group, Staples, Tempo and Electronics Boutique will all buy directly from the software giant. The source, who wished to remain anonymous, said: "Microsoft wants to control the high street shelf space. It has significant plans in retail as it prepares to compete in the entertainment industry, which is traditionally a very direct market."
Microsoft's commitments in the application service provider arena with its .Net strategy, as well as concerns over profit margins and the cost of advertising campaigns for its Xbox console, are all said to have played a part in the decision.
But the source questioned how profitable direct software sales would be. "The cost of storage and delivery would be huge. It would be difficult to perform the service cheaper without using a distributor."
The move is part of a global policy introduced by the Redmond giant, which has similar schemes already in place in France and Spain.
The source said that distributors Computer 2000, Ingram Micro and Gem will all be affected by the decision, and that Gem will be hit hardest because it supplies all of Microsoft's leisure software to Electronics Boutique.
A representative from Dixons said that it is looking at its distribution channel to ensure the best possible financial deal for the company, but refused to elaborate on Microsoft's decision.
An Ingram representative said that Microsoft was constantly adapting its channel to take its business forward.
Both Microsoft and Gem declined to comment on the story, while Computer 2000 was unavailable for comment at the time of going to press.
First published in Computer Reseller News
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