FACE TO FACE - An audience with Coutts

His parents wanted him to be a doctor, but Nick Coutts, now channelconsultant for Ogilvy and Mather, skipped medical school to drive aroundEurope. His prescribed view is that web suppliers will continue to grow.

Nick Coutts arrived for his interview looking slightly dishevelled.

He had rushed to arrive on time and that meant departing early from home.

This is not normally a problem but his home, overlooking the Musee D'Orsee, is in the French capital.

He has his frequent traveller pass for the Eurostar and a wallet with nine different currencies in separate compartments. But the temptation is still to ask him if he's heard the joke about why the Eurostar goes like a bat out of hell in France then screeches to a snail's pace once it hits the garden of England. Simple, it's a British train driver and he wants to get out of Paris as quickly as possible.

I don't tell him the joke. Coutts operates above the national level.

He sees in terms of global markets, and huge web-based supply chains encircling the planet.

However, it doesn't stop him from relating how his family, originally from London, regularly perplex Parisians: "I have two daughters - Natasha, who is 13-and-a-half, and Octavia, five. Last week, while standing at a bus stop, an elderly lady asked me why it was that my older daughter spoke French with an English accent and the younger one spoke English with a French accent."

Coutts has spent his career putting not only the IT, but the automotive and the pharmaceutical channels under his spotlight. At present, he is running his own channel consultancy for advertising giants Ogilvy and Mather, after being personally invited to do so by Ogilvy. It is the latest venture in a career that has included working with Azlan and heading IBM's global channel strategy.

Coutts' route into the IT channel - or the automotive channel for that matter - started from an unlikely point. Both his parents had wanted him to be a doctor, but like most teenagers, he had different ideas: "I had a place in medical school, but I wasn't too sure. Luckily, I was able to defer my place for a year and I bought a van with a friend and we drove around Europe for 12 months."

He adds: "I thought it was great, but I had to face up to things eventually. When I got back my parents told me to either go to college or get a job, so I got a job."

However, Coutts did not just leap into the hi-tech world of the late 60s. He recalls: "I started work in the local Ovaltine factory and basically did anything that came along. Then I began writing a few notes on how things could be organised better."

It would seem the notes were quite good because at the age of 19, he was transferred to the head office in Grosvenor Square. "I was in marketing services, dealing with commercials for the Caribbean and South America," he says. "I made papier mache mock-ups for the ads. We also had an old van shaped like an Ovaltine can and a film projector in the back which we would take out into the little villages and show the commercials."

In 1971, aged 21, Coutts was helping to establish a launch plan for pharmaceuticals products. "We started using a computer bureaux for critical path planning for the launches each summer. That was my first experience of using IT. Then I started to move away from big centralised computers to playing with the first true commercial micros," Coutts says.

It was then that he decided to do an economics evening class: "Every Tuesday, I'd stroll up to Highbury Grove with my suitcase only to be harangued for more than two hours by women who wore dungarees . It was an interesting period in the feminist movement. It was suggested that I go and read economics so I gave up my job to become an undergraduate at Cambridge."

Coutts provides a bleak description of Cambridge but he recalls how his interest in IT continued: "We used a computer lab for modelling economic scenarios. They weren't the best machines and it was irritating to cycle to the lab in the rain, only to be told by a guy in a white coat what I could or could not do with 15k of Ram."

By then Coutts had missed the mature student grant and was forced to work. "One project was with a firm that imported computer kit. I built my own machine from their kit. It was based around a RTA 1802 4-bit micro programming head with 64k of dynamic Ram, and backed up by a little audio recorder - I'd managed to complete it despite everything blowing up when I got the power supply round the wrong way.

"When I was rebuilding it I had my hand wired to some kitchen foil to prevent any more disasters and Herman Hauser walked in. He was at Kings College at the same time doing his PhD and I showed the machine to Herman. He went off to found Acorn," he reveals.

After Cambridge, Coutts' project work continued to grow, so he founded his first consultancy, which was also a Hewlett Packard reseller. The company was taken over by NOP and Coutts became director of a NOP subsidiary.

Coutts left NOP to form Office Networks, another consultancy, targeting the financial sector: "But then the recession hit. Customers simply switched off their systems. My two biggest clients went to the wall." As did Office Networks.

However, one of the accounts that did survive was Azlan, and it offered Coutts a job.

"I joined just after Azlan completed its management buy out from Logitek. I was directing technical services and it was a fantastic experience - we were the first IT distributor to float. Dealing with Warburgs was amazing - we sat in its offices and one butler would bring in the coffee, another the milk and sugar - it was the most expensive cup of coffee I had in my life. It was great to go on the trading floor and watch Azlan float," Coutts recalls with delight.

The business continued to grow and IBM approached Azlan to distribute its networking products. "It took a long time as it didn't really understand what two-tier distribution was all about," he explains. During a lunch meeting Coutts received his first job offer from IBM to help the vendor run its channel.

He was then invited to France to give a presentation to IBM's European networking staff. "My presentation was the last in a three-day meeting so all the executives had their filofaxes closed and plane tickets out and I thought, this is going to be harsh." But Coutts did keep the interest of the IBM networking general manager, who walked in late and sat opposite him. He was again offered an IBM job, but Coutts declined a second time.

However, four months later, Coutts received a phone call asking him to meet Jean Claude Malraison, head of IBM's European distribution partners, at Heathrow airport. "I was dreadfully late and he was clearly irritated.

We went for a beer and in 20 minutes, I learned the French sell Christmas trees to the Swiss, Malraison had a couple of boats in Brittany and liked fishing - and I had another job offer from IBM," he says.

But this time it was for IBM's entire European distribution operation, and responsibilities would include dealing with hardware, software and services.

It was a big project and Coutts saw it as a real challenge. He decided he would accept the job. He had two reasons - the first was the easy one, he felt that it was time to move on from Azlan; and second, his family had suffered a personal tragedy. London was not the place where the Coutts family wanted to be.

"The job was in Paris and we wanted to leave. It turned out to be the right decision," he says calmly.

Coutts joined as director of channels. Two years later, he was asked to head IBM's global strategy but the then vendor tried to post him to New York and again family came into the equation. He did not wish to uproot his wife and daughters. He resigned and then joined up with Ogilvy and Mather to head the channel consultancy.

Coutts is clear about why he believes all channels are changing. "Everybody realises that IT and ecommerce will affect everything. How can businesses forecast efficiently when their business models are changing so dramatically?"

He explains: "Businesses are all asking what is the best way to market. The ecommerce channel can complement the existing channel. I can prove to clients how much further their money can go by using ecommerce. Ogilvy wanted a channel consultancy because more companies need to see how they can improve what is going on in their channel. There are very few businesses with that experience, except in the IT industry."

Coutts is also involved with Hyperchannel, the ecommerce distributor and a Norwegian software company. He believes the channel faces huge upheaval - the reason why he is backing those companies he sees as innovative.

"The number of products, competitors, customer segments and channels to market, has exploded but some companies are still trying to go to market in the same way they did 20 years ago," he says. "We are going to see huge changes over the next five years. There is already a big shift away from the manufacturers and towards the consumer, away from government towards the individual - and with that power goes responsibility.

"Consumers expect to buy how, when and where they want to. If they're not allowed that freedom then your rivals will use the internet to deliver. The euro, which has made pricing transparent, will aid this," he adds.

Coutts laughingly points out the big losers as a result of the euro will be banks, not UK businesses: "More than a third of bank profits in Europe comes from changing currency. It is a pointless task. Individuals don't benefit, companies don't benefit, manufacturers make nothing. It's only the banks that benefit."

However, Coutts believes the channel will balloon. "Competition will no longer be on price, it will be on services and brand experiences - companies are increasingly going to have to build loyalty and refresh services regularly."

With 77,000 resellers in the top 10 European countries competing on the internet for the 60 million SMEs across Europe, competition will certainly become healthy.

Coutts says: "Brand experience is increasingly important and that is what manufacturers need to build. The reseller, by partnering with distributors, can offer 500,000 products. There will always be a channel as manufacturers can't do that effectively."

He concludes: "Distributors are also here to stay. They perform a vital role in the sector they cover with logistics expertise. Resellers will need that expertise to help them compete. There's no longer a Ford model-T scenario - if you say it's only available in black , someone will be ready to do it in white, and you'll lose out."

STORY OF THE BLUES ...

Nick Coutts

Channel consultant for Ogilvy and Mather

What was your first job and salary?

Working at an Ovaltine factory where I earned £7, 13s and 4d per week.

What is your most embarrassing moment?

My first presentation at a conference, which I did very badly.

What is your favourite sport and team/player?

Skiing. I don't follow any team sports, so cannot name a favourite player.

Who do you most admire in the industry?

Tim Berners-Lee

What is your favourite TV programme?

NYPD Blues.

What is your favourite website?

Photodisk.

What was the name of your first pet?

Marmalade - a cat.

What vehicles do you own?

None - parking in Paris is too difficult.

What do you want to be doing in five years' time?

Six months working and six months reading, writing and teaching - instead of 12 months working.

Do you believe in extra-terrestrial life?

Yes.

Who (alive or dead) would you most like to have dinner with?

Brunel.

How do you relax?

Listening to Mozart with a good bottle of Burgundy.

Who was your favourite teacher at school and why?

Doug Cox, the art teacher; he would put rum in my coffee on cold winter mornings.

What is your idea of a perfect holiday?

Skiing off-piste in St Anton.