Micropolis ups OEM business

Emphasis on OEM business will almost halve amount of vendor?s product going through distributors

Disk drive manufacturer Micropolis will reduce the proportion of business going through the channel from 80 per cent to 40 to 50 per cent by the end of next year, as it steps up commitment to its OEM business.

The company, which was acquired by Singapore Technologies in April last year following financial difficulties, claimed the move to increase OEM sales would benefit its partners as well as itself as it would be better able to compete against its rivals.

Terry Ostridge, VP of European sales and operations at Micropolis, said: ?The proportion of business in the channel is higher than it should be and the 20 per cent going to OEM customers is the legacy of the old Micropolis.?

He denied suggestions that the channel might gradually lose access to product, saying that output to the channel would continue to grow ?but as a percentage of overall business it will be smaller?.

Ray Rice, business manager at CMS Peripherals, said there was as much product available to the distributor as it could handle at present. ?But I wouldn?t say that it was stuffing the channel,? he said. ?I suspect that [squeezing the channel] wouldn?t be the case. I believe [Micropolis] has the capacity to produce more than it has at the moment.?

Rob Read, product manager at Summit Peripherals, described Micropolis? move as sensible and in keeping with the trend of other disk drive vendors such as Fujitsu, Quantum and Western Digital. ?Micropolis has got to get drives to OEM vendors because that?s where the volumes are,? he said. ?I don?t think a distributor would be able to handle these volumes.?

Micropolis is due to appoint an un-named distributor in Germany on 11 September. It said it could potentially recruit more distributors in the UK if it would add value to the channel.