BT is going head-to-head with its channel by launching its own software reseller to target the lucrative SME market.
In what has been described as a "desperate attempt" by one BT reseller, Open Orchard has been set up to sell business software packages, such as customer relationship management, ERP, web trading and general accounting applications. A £6m marketing campaign has been launched.
UK distribution deals with software vendors Netledger and Orchestria have been signed. But channel critics have warned that Open Orchard will struggle to respond to customer needs as effectively as local VARs.
The news follows last week's announcement that BT will go up against its voice and data convergence resellers through its BIS arm (CRN, 18 November).
Yvonne Thomas, chief executive of Open Orchard, said: "BT has a major place in the SME market with 1.4 million customers and 2,000 staff focusing on that sector."
She added that Open Orchard will negotiate terms with vendors using BT's buying power. "We can buy direct from suppliers using BT's strategic purchasing division. It means we can offer more robust contracts than smaller resellers," she said.
But Gordon Davies, commercial director at BT reseller Compusys, said the move was a reaction to BT's failure to build a good channel. "BT has failed to attract high-quality resellers and this is a desperate attempt to re-enter the SME market," said Davies.
"BT has missed its growth and revenue targets because of a lack of understanding of small businesses. SME relationships are owned by people they trust, and many don't trust BT."
David Reynolds, business development manager at VAR Star Computers, said Open Orchard will struggle to make ground in the SME space because of "a lack of understanding of SME business needs".
Mike Lawrence, managing director of reseller Bentpenny, said: "Whether it succeeds remains to be seen. It will struggle to have a reaction time as good as that of local VARs."
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