Cable & Wireless (C&W) has won a multimillion-pound contract to install and run the email system used by the NHS, but will be taking the deal direct because it is "too big" for the channel to handle, the firm has said.
Despite pledging only last month that it intends to use the channel more, the vendor itself will fulfil the deal to provide everything from hardware to professional services for more than 1.2 million NHS staff under the National Programme for Information Technology.
Gareth James, managing director UK and Ireland at C&W, said: "The public sector is a huge feather in our cap and part of our core strategy going forward. It is way out of scale for a channel prospect. Organisations like this need a prime contractor."
However, James added that the company will maintain its pledge to increase channel sales.
"Our thrust in the SME and mid-market space will increasingly become more channel driven, but a contract this size is just not suitable for resellers," he said.
Manny Pinon, sales and marketing director at distributor Norwood Adam, said he was not surprised the vendor took the deal direct.
"The size of the deal does show that there needs to be a significant organisation to take it on, but there are plenty of channel players that win these type of contracts," he said.
"C&W is making a big noise about wanting to work with partners, but every time it does something like this it doesn't help its chances in winning over VARs.
"Some VARs seeing this contract will think C&W has no real intention of playing in the channel space, especially if it continues in going for the big deals and fulfilling them direct."
However, James Governor, principal analyst at RedMonk, said: "The NHS as a buyer will be looking for accountability from suppliers. It is not going to move from EDS (the previous supplier) to using 25 different companies for one project.
"C&W is trying to rebuild its credibility overall, not just with the channel, so it is understandable it wants to do this directly."
Watford-based Hills Components ceased trading last month and its current inventory will be auctioned off
Robots, predictive analytics and selling without a salesforce: Where the UK's leading MSPs think the market is heading
MSP bosses to share their thoughts on the future of the managed services market
Distributor on course to hit £20m revenue this year
In an interview with CRN, Wendy Mars says Cisco and its partners are no longer having to arm-twist customers on the need for digital transformation