Service companies threaten distributors

Distributors face extinction within five years as service companies replace them, according to ICL European sales and marketing manager Sergio Tansini.

He said the massive growth of services led to the sector becoming more mature so that service companies realise they can take on other aspects of business.

'Procurement and services will become more and more integrated and procurement will become a service. At the same time, more and more vendors will be going direct.

'We are trying to fill a space and become the corporate service provider - the existing reseller cannot fulfil that role. The distributor cannot fulfil that role. They might be able to do it in one country or city but they can't do it globally.'

He said Computacenter was an example of a company that had become a 'service vendor' by focusing on corporates. 'What I don't expect to see existing in five years is the mid-size distributor, although there will always be the local distributor,' claimed Tansini.

He said distribution was becoming more assembly focused as companies found themselves unable to offer much else. 'Procurement is becoming just an integral part of services,' said Tansini.