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'We want them to go direct', IBM partner says

'We want them to go direct', IBM partner says

Not all of IBM's channel partners are opposed to the vendor's direct-selling aspirations. Anthony Ciconte, managing director of CTO Services, claims he has shipped "about 10,000" PCs for Big Blue this year "at about 1 per cent margin", yet he would not have a problem with a totally direct model.

He believes that "ultimately all the vendors will go direct" because the customer is demanding a better price, "particularly in the corporate market", he said.

"At retail level you definitely need partners. There is a high ratio there when you compare the volume of enquiry versus the unit of orders. But in the corporate sector, the channel hardly adds any value at all in just shipping."

It's an old message about a different market than the one addressed by Harvey Norman and Harris Technology, but Ciconte is adamant that corporate resellers need to focus away from business models based on hardware margin.

Ciconte said CTO Services "used to be a reseller" but these days concentrates on a "process partnering" business model, which involves a conglomerate of partners, each of which have clearly defined roles in the process of delivering a hardware solution to an enterprise client.

"Process partnering is similar to outsourcing in a way, but everybody takes responsibility for their actions," Ciconte said. "You have a situation where you have a lead partner and then you have all these subordinate partners.

"Everybody knows their position in the food chain and then what they're charging for. It is the new style of business; the open-book style of business where everybody knows where each other stands."

In this way, the costs are opened up to the customer and everybody agrees on what margins should be taken to deliver a particular service to the customer, he said.

"The customer knows that they have got the very best deal they can get. This model is very much on the rise in Australia at the moment. We have been using it for the last two and a half years and it is really beginning to take off for us.

"We have a wonderful relationship with IBM and Compaq. We want them to go direct. The more they go direct, the more we will grow."


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