If you are a corporate reseller trying to keep both your customers and your suppliers sweet, which chip platform at do you advise them to use in the next few years? That question raises its head because of the recent entry of both IBM and Compaq into the Intel-based workstation arena, using the Pentium Pro and Windows NT.
Compaq is interested in winning market share from HP and Sun and that puts resellers in something of an awkward position. The bigger ones generally have relationships not just with a few vendors but with many.
The twenty fifth anniversary of the first Intel microprocessor does not, as the chip company would like you to believe, herald the first dawning of a new era where Merced, Klamath, Deschutes and any other combination of river dances will bring you the solution to end all solutions. Chips were around before Intel started and there?s always room for a bright start-up to win market share .
But it does bring some difficult choices as dealers and vendors attempt to explain the options to their customers. Now that the operating systems wars seem to be totally dead, the real question is, what hardware platform do you recommend to your customers?
The biggest corporate reseller in the UK is Computacenter and Martin Hellawell, head of marketing at the company, admits that it does, to some extent, sit on the shelf.
"It depends on a customer?s business needs," he says. "We will advise them about platforms but in most cases the customer has made up his own mind." Outsourcing in the corporate sector, however, has steadily increased over the past five years and that has given Computacenter some new opportunities.
"The number of times we?re called in to give technical services has increased. It?s a fast growing part of our business and we?ve recruited 250 people in just that division this year."
Hellawell admits that vendors and their strategies do have an influence on Computacenter?s decisions but that it generally is benign. "We deal with everybody and we don?t really care [which platform] a customer buys," he says. "Margins are much the same on any product."
He describes Compaq?s entrance into the workstation market as "a brave move" but says it is bound to influence the way the market shapes up. Computacenter has won what he describes as a very large order for the Compaq workstations from one of its City customers, although he declines to say which customer it is.
It?s clear the management at Computacenter do hold opinions on the future direction of the computer industry. "We do both Intel and Unix," he says. "If people can reduce the support cost by moving to Intel, we?ll advise them to do that but it may be more expensive in terms of support to move [from that] to a different platform."
Like many other players in the channel, Computacenter thinks Windows NT will sell well as an operating system. "NT is making masssive strides on the workstation side," he says. "It?s difficult to bet against them." That may not be so true for Intranets and the Internet, he thinks. "Netscape will continue to have a significant market share there."
Harry Thuillier, chairman at Fraser Associates, says the choice is stark for customers. "In principle, we only sell products by Intel except when it?s Apple. It may be customer driven but if they?re heading for NT it must be the Pentium Pro."
He says they will have no choice. "They?ll be forced down the MMX route, the Klamath and the Deschutes route and then the Merced," he says. "Manufacturers will decide between the Pentium Pro with loads of cache or not."
Although corporate resellers, by their very nature, have to hedge their bets and supply whatever their customers need, there is one significant influence on their thinking. Intel, Compaq and Microsoft have massive marketing funds and are cash-liquid. Intel?s strategy is to become a $100 billion company by the end of the century and Bill Gates will spend as much money as he needs to stay in the running. Gates has shown that he is perfectly prepared to switch strategies if that is what the market demands.
While Compaq is also prepared to switch if it thinks the market is changing, it is betting its money heavily that the future will be Wintel. It will aggressively take on HP, Sun and its existing PC competitors and because Intel believes that the Pentium Pro in massively parallel formations will be the way to go, Compaq will have some backing from the chip giant.
Whichever direction the wars in the industry take, the corporate reseller market is unlikely to suffer. As Hellawell says, the margins are much the same whatever the hardware platforms. To this extent, the channel is spectating on the different matches without necessarily being a supporter of the teams that are playing. In this position, corporate resellers just cannot lose.
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