Microsoft strategy shift sparks distributor relief

Bell, C2000 and Ingram Micro given reprieve in software giant's distribution U-turn

The three biggest broadliners in the UK heaved a sign of relief last week after Microsoft U-turned on its decision to axe one them.

Despite the hoop-jumping and tough targets, the distributors told CRN they are pleased with the software giant’s decision.

As exclusively revealed by CRN last week, Microsoft made a major U-turn by deciding to keep all three broadliners on board, despite vowing last year to axe one by the end of June (CRN Online, 27 June).

Steve Haddock, Microsoft’s partner group manager, told CRN: “When I started the review I was adamant we only needed two broadliners; but over the past three months we began to see differences in each of them that we had not recognised before.”

The review process involved a scorecard that ranked the three distributors first, second and third every month. Haddock declined to reveal which distributor came third.

Bhavesh Patel, commercial director at Ingram, said: “It was a rigorous process, but one we all learned a lot from. It enabled Microsoft to challenge its broadline distributors to up their game and I believe we did. The UK is a big market and I think Microsoft needs three players to service it.”

Graeme Watt, president of Bell, said: “Our main focus has been on our relationship with Microsoft and as such we are delighted to retain that relationship.”

Andy Gass, managing director of C2000, admitted he was disappointed that Microsoft had not followed through with its original plan.

“We did a good job across all areas of the market and Microsoft recognised that,” he said.

Haddock said the whole process helped Microsoft and the distributors realise their strengths. “They all have really unique traits that they can bring to bear in the market; we just have to execute on them. Each firm has the potential to help us meet our core target of achieving better penetration into our unmanaged breadth partners,” added Haddock.

He said his target is to grow the partner business by 10 to 20 per cent in the next 12 months and Microsoft will be investing in its broadliners.

“There are 12,000 [unmanaged] resellers who buy small volumes from our distributors, then there are a further 5,000 that could be selling Microsoft products,” he said.