Microsoft kicks off UK software distribution review

Microsoft is undergoing a UK software distribution review, with new faces such as VIP and Ci Distribution understood to be among those invited to tender.

Request for proposals (RFPs) were sent out to existing and new distributors last Friday covering much of the software Microsoft puts through distribution, namely full packaged products (FPP), OEM Windows, OEM server and electronic software delivery (ESD) products.

The amount of business up for grabs is estimated to be worth £20m to £30m annually.

Distributors have until 24 March to submit their bids.

Onlookers suspect Microsoft may be looking to rationalise its current line-up, which currently encompasses Tech Data, Ingram, Westcoast, Exertis and Entatech.

In its correspondence with the distributors, however, Microsoft said the review reflects its recent move into hardware and changes to its business model.

The exact line-up for FPP, OEM Windows, OEM server and ESD currently varies - with each of the four areas encompassing a permutation of members of the above quintet. Tech Data and Ingram are the only two to enjoy a berth in all four.

Sources say Microsoft is likely to divvy up the spoils in a similar fashion this time around.

As well as the current five, VIP and Ci Distribution are also known to have received an invite to bid, according to multiple sources.

Despite currently residing in the box seat on software, Ingram and Tech Data recently lost out in a similar review Microsoft completed for its hardware accessories business, which includes mice and keyboards. According to sources, seven distributors were invited to bid for this franchise, including the existing quartet - Exertis, Westcoast, Ingram and Tech Data - but only Exertis and Westcoast were successful.

Mark Reynolds, UK IT commercial director at Exertis (pictured), confirmed that the distributor has received the latest RFP.

"Yes, we have been invited to respond to the RFP and are keen to get as much as we can," he said.

One onlooker said that he thought both the OEM and FPP segments of Microsoft's software business are declining in volume, and that ESD represented the most lucrative chunk of the tender.

Despite this, Alex Tatham, UK managing director of Westcoast, said he was keen to secure a berth across all four areas.

"Our focus is to do everything that Microsoft does, so we will be gunning for this heavily," he said.

VIP and Ci Distribution both declined to comment. Microsoft had not responded to our requests for official comment at the time of publication.