What did Compaq in the US announce this month?
Compaq launched a direct sales and marketing effort aimed at delivering build-to-order PCs, online purchasing and support services for small and midsize businesses.
But don't they do that already?
Yes and no. Company officials have talked about selling direct and building made-to-order PCs, especially for larger customers. This month's announcement mainly formalises the strategy.
Why is Compaq turning to direct sales?
To match the prices and configuration options that rivals such as Dell and Gateway have been able to deliver by selling directly to customers instead of through distributors, dealers and resellers.
What are Compaq's biggest challenges in making this work?
Channel conflict. The company has to find a way to convince its channel partners - which today account for almost all its sales - that direct sales won't mean a loss of business for them. Analysts believe the vendor has been hesitant to go openly direct in the past because of channel revolt.
So what is Compaq doing about it?
Compaq is sweetening the deal for resellers by offering incentives for pass-along sales leads. Resellers are also expected to be more involved in assembling computers for Compaq.