Compaq battles to hold onto resellers

Compaq battles to hold onto resellers

The fight for reseller loyalties following Compaq's distribution rationalisation has turned ugly.

Former distributors such as CHA and Prion have been angered by Compaq's mailing to their reseller customers, using names allegedly provided in good faith to Compaq by the distributors.

ARN obtained a copy of the letter, signed by Greg Healy, Compaq's general manager, business and consumer, which espoused the "key objectives" behind the channel rationalisation and the benefits of it to resellers.

Roger Bushell, managing director of CHA, said he was disappointed that Compaq appears "to have gone after all of the customers that were buying Compaq from us.

"We haven't even been formally informed that our contract with them has ended and I find it a real cheek that they are trying to convince long-time customers of ours to deal with our competitors," Bushell said. "Especially after we had to supply them with all the names of our customers in the submission process."

"We've definitely got issues," said Prion's managing director Michael Bosnar. "We put these customers forward to Compaq when the Digital acquisition occurred and we did that willingly because at the time it seemed like a win/win situation," Bosnar said. "But of course, the rest is history."

Bosnar is particularly upset because the letter fails to mention that during the three-month transition period all distributors will continue to supply Compaq. He said he has also not received an official letter confirming the rationalisation and said Compaq management has not returned phone calls.

Greg Healy was unavailable for comment, but a Compaq spokesperson did confirm the letter was circulated "to all of Compaq's direct and indirect channel partners" from an "extensive database we have been building up over a number of years".

Old channels

The names were not garnered from distributor customer databases but they included contacts from the old Digital and the old Compaq channels as well as some gathered under the merger, the spokesperson said.

"We already have a relationship with these customers, so of course we would write to them and let them know of the changes. It would be remiss of us not to. Our intention was to widely communicate the appointments to the channel and ensure there is a smooth transition for our customers," Compaq said.

Meanwhile, resellers are being forced to decide where their loyalties lie - with the distributor or with the vendor.

Melbourne reseller CI Computers was a Prion customer. Prion's erasure from Compaq favour has forced them to go elsewhere, namely ITG. "We have a large investment in Compaq, we know the product and the software we use is proven on Compaq. Unless there was a significant price difference between what Prion will offer and what I can get Compaq for elsewhere we won't change brands," asserts CI Computer's general manager, Eric Schumenther.

Taking the opposite approach, CHA reseller MCG Computer Group's managing director, Michael La, is more interested in maintaining good relations with the distributor than remaining loyal to Compaq. "If CHA stops getting Compaq product then we will sell more Toshiba I guess. We can get it [Compaq] through other distributors but sometimes relationships are more important," explains La, who wants to keep the number of distributors he deals with to a minimum.

Distributor loyalty

John Denham, resale manager of Bendigo-based reseller Scientific Business Software Services (SBSS), would like to be in a position to "favour the distributors that have always looked after us", but is realistic and expects it will be "business as usual with Compaq, even though it has been tough since the Digital/Compaq merger".

He was also shocked at Compaq's decision to exclude Alstom as an Alpha distributor (see story above).

Ivan Gomez, general manager of MicroArts, is not willing to totally dismiss distributor connections. "We will definitely not abandon our relationship with Prion, in fact we will probably intensify it, but we equally value our relationship with Compaq," Gomez says. He added that this dichotomy as an opportunity for MicroArts to expand its position in diverse markets, whilst utilising the stability the Compaq brand encourages. Many resellers, particularly those with a Digital history, said a deterioration of service since the merger made the decision easier. Wayne Bertoldi, purchasing manager of Melbourne-based reseller Computershare, has had misgivings about his relationship with Compaq since last September, even though he has a "good relationship with CHA" and he prefers to deal with them.

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