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Last throw of the dice

Last throw of the dice

I'm sure many of you have survived boring meetings and presentations in the past by playing a secret game of 'buzzword bingo'. For the uninitiated, the rules are simple: Jot a few examples of jargon or management speak onto a notepad beforehand and keep count of which one is used most. For the record, 'going forward' has long been a particular favourite of mine and a sure-fire winner in strategy sessions.

Having written about this industry for around five years now, there are a few stock phrases that channel executives trot out again and again in an attempt to get their message across. For example, I've lost count of the number of times somebody has told me that they 'don't want to see a product over-distributed because it kills margin' or that 'a successful channel strategy is key to success in the SMB market'.

But if I'd kept count of all these cliches, I suspect the winner would be 'you can't be all things to all people'. Although massively overused, the truth is that phrases like this tend to stick because they are often true - shareholders at Commander can certainly bear witness to this one at the moment. From a high of $2.56 in 2005, the company's shares have been in freefall for the past year and are now worth roughly a tenth of that amount. It's a sad story and even competitors who are making gains from the demise of Commander are not celebrating.

The collapse of such a leading player is a reminder that you're never more than a couple of bad decisions away from a crisis of your own.

As well as investors that have had their fingers burned, and staff that have seen hundreds of their colleagues retrenched in the past week, Commander's major vendor partners also have plenty to worry about. Although HP executives refused to say much when asked for comment, you can bet they are less than delighted by the announcement that the new Commander management is planning to abandon low-margin, high-volume hardware sales.

Commander was HP's largest reseller in the country and is thought to have sold about $180 million worth of its boxes last year. Managing the transition of so many customers to another HP reseller, particularly major government and education clients, is sure to be a nightmare and there will be no shortage of competitors looking for opportunities to capitalise. If leading Commander sales staff end up working for another reseller that carries competing brands, you can bet they will take big contracts with them.

From Commander's point of view, you can't blame the new management for trying to concentrate efforts on higher-margin telco and services business. But I hope they don't go over the top in abandoning hardware because selling boxes and services still go hand in hand a lot of the time.


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