Resellers expressed grave concerns that PC vendors would step upnt direct sales target for 1999. their direct sales operations last week after Compaq made its boldest statement yet regarding its sales strategy, revealing that almost one third of its business would now be sold direct.
Speaking at Compaq's international press briefing in London last week, Andreas Barth, vice president of EMEA at Compaq, said the vendor intended to raise the proportion of direct sales to 30 per cent of total revenue, up from 23 per cent last year. Of the $31.2 billion sales made by Compaq last year, about $7.2 billion was generated outside of the channel.
According to Barth, in addition to using its 2,000 direct enterprise sales force, Compaq will make extensive use of the Net to sell direct to users in Europe. 'The customer-driven market is a reality and we will use the Web to reach different market sectors,' he said.
Barth added that direct Tandem, high-end Alpha and Storageworks businesses would be joined with Web-based PC sales. These would be co-ordinated by the vendor's Compaq.com operation with support from the Altavista search engine, which will be modified to accommodate online selling.
Meanwhile, Hewlett Packard was understood to have outlined its own strategy for selling over the Web, the day after it released details of first-quarter sales to 31 January, which were almost flat at three per cent up on the previous period.
One dealer warned: 'Any drive by Compaq to increase its direct sales will eventually have an impact on resellers' business. I always feel for resellers when vendors say they are going direct. We have come up against Compaq before - it is going to heat up the market even more.'
But Ian Whittaker, director and general manager of HP's commercial channels organisation, denied it was preparing to sell direct over the Web, but that internet sales would be fulfilled by resellers.
'The reseller has its own margins and pricing on our Web commerce centre.
Why would we want to fulfil direct? It is not our core competency,' he said.
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