Tech Pac moots IBM margin shift

Tech Pac moots IBM margin shift

Changes to IBM's Web-based business model are likely to occur within months if the sentiments of the vendor's distribution channel are any gauge.

IBM has found itself at the receiving end of heated channel feedback in the wake of the new model, which includes a fixed, 7 per cent reseller margin for small box sales.

Tech Pacific managing director, David Cullen told ARN yesterday that IBM is listening to the channel's concerns.

"I'd be reasonably optimistic there will be some changes to IBM's strategy," he said.

He said consultation has continued between IBM and the channel about the issue, with most resellers still digesting the impact of the move.

The plan saw IBM scrap its estimated street price (ESP) and general reseller price (GRP) models in favour of a flat Web price advertised on

Cullen said he had a "gut feel" IBM would consider changes to the new margin structure, but suggested they would not be drastic.

"I'd like another five points," he quipped. "And I'm sure a lot of resellers would too."

Cullen predicted a margin shift could take place within months.

However, IBM is yet to come to the party. IBM spokesperson Frier Bentley would not confirm or deny if and when any changes to the model would take place.

Philip Bullock, IBM's personal systems group general manager, was overseas at press time and unavailable for comment.

However, Bentley indicated discussions are continuing with its channel partners.

"IBM is not inflexible," she said. "IBM is adopting a competitive pricing strategy. The company continually reviews channel plans. It's not set in stone and may change."

She said IBM will continue listening to the channel. "It's about two-way communication," she said.

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