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Pfeiffer's shock exit rocks the channel

Pfeiffer's shock exit rocks the channel

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Eckhard Pfeiffer's forced resignation as chief executive officer of Compaq, amidst recriminations by the board for poor Q4 results, has stunned the IT and business community and again raised doubts about Compaq's future commitment to the channel.

"Pfeiffer has had an excellent innings as CEO since 1991, but in a very dynamic industry, it's obviously time for Compaq to have a new CEO with a fresh approach," said Integrand Solutions managing director David Hayman.

But the doubts were typified by Hugh Smith, managing director of Western Australian reseller ComputerCorp.

"Four months ago I hated Compaq. Then recently they started to get their act together, and just as I start to regain confidence this happens and I am nervous again," he explained.

Uncertain future

Smith's nervousness stems from the uncertainty surrounding the future of Compaq's hybrid distribution strategy, with its mix of direct customer relationships and channel sales a possible scapegoat for the dismal financial results that Compaq posted last quarter.

However, Ian Penman, managing director of Compaq Australia, was adamant that Pfeiffer's dismissal was simply a matter of "the board losing confidence in his ability to maximise profit". According to Penman, his absence will have no effect on Compaq's sales model.

"Our strategy is basically sound and there won't be any changes. All we need to do is execute the strategy better," he said.

Ross Cochrane, general manager of Sydney distributor Express Data, reiterated this philosophy. "Companies like Compaq are measured against expectations created in the marketplace. They simply oversold their ability to continue to sell the volume they needed to while trying to digest an acquisition the size of Digital."

Tech Pacific managing director David Cullen agreed that it is about expectations. "Pfeiffer had a lot to do with the mergers of Tandem and Digital, so I believed he would be given time to get that right. I think his problem was that he over-committed and under-delivered," he said.

Ivan Gomez, general manager of Melbourne-based reseller MicroArts, anticipates that Compaq will merely continue on its present course of channel rationalisation. "Even before Pfeiffer resigned there had been a refining of Compaq's customer-relationship system. The Australian distribution channel has been culled and direct resellers are being reassessed. Direct has always been on the cards," Gomez said. He expects Pfeiffer's resignation will simply accelerate the process.

Something different

Fiona Dicker, general manager of Dicker Data, seemed resigned to the inevitable. "Obviously there will be changes. Anybody who takes over feels that they should be doing something different. This will filter down here in time, but I think we're maybe 12 months behind the trend in the US," she said.

Some in the channel, however, are not so quick to conclude that the consequences of Pfeiffer's resignation will be the dismissal of channel partnerships. Cochrane explained that "the mix of the two styles and approaches to customers is fine as long as there is enough volume to support both forms of investment. Compaq in Australia is moving towards a channel model, especially with products focused at the small and medium enterprise because that is our traditional domain."


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