Microsoft holds back on DSP decision

Microsoft has delayed issuing updated Delivery Service Provider (DSP) contracts to distributors, prompting speculation that the software giant is plotting major changes to its OEM strategy.

The four existing DSPs, as well as a number of hopeful distributors, have applied for the lucrative OEM franchise and had expected a decision by the end of May.

But a decision is now not expected until at least mid-June, as senior UK OEM management at Microsoft were last week summoned to a strategic meeting at the vendor's headquarters in Seattle. This has prompted observers to suggest Microsoft is considering a rethink about the way how sales to OEMs should be structured.

One source said: 'Microsoft is stumbling because it can't decide whether to expand its DSP distributors to five or six, or get rid of one and have a smaller line-up.'

Osmosis' collapse into administration last month is understood to have complicated the issue further by forcing Microsoft to consider a review.

It was one of five DSPs in the UK, alongside Datrontech, Ideal Hardware, Enta and Actebis. Broadliners CHS Electronics, Computer 2000 and Ingram Micro have also applied to become DSPs.

Graeme Watt, managing director of C2000, said: 'I've had no update from Microsoft.' Peter Rigby, director of marketing and communications at CHS, added that he expected a decision in the 'next couple of weeks'.

Adele Knox-Roberts, distribution sales manager at Microsoft, said: 'The OEM unit is making decisions for the fiscal year 2000.' She added that a decision would not be taken before 14 June.