In his keynote address to 5,000 customers and channel partners, Eckhard Pfeiffer, CEO of Compaq, formally confirmed the company will now have a direct component to its business worldwide. But Pfeiffer and other senior executives at the company took care to stress it will not dump its channel.
Dogged by persistent problems with his microphone which meant that for about five minutes most of the delegates were unable to hear him, Pfeiffer also announced plans to expand Compaq's Internet presence.
"We've spent more than a year designing, developing, testing and implementing a new worldwide manufacturing and delivery model," he said. "We're creating a new set of base level products that our channel partners can buy, configure exactly to an end customers order and then deliver."
He said that meant Compaq was switching its manufacturing from forward forecast to a just in time model. "We are also customer configuring products to customers' specifications...Compaq will deliver through whatever method and channel [customers] prefer. We'll let the customer and the channel define where the configuration should be done."
The changes meant more Compaq salesmen will be involved in contact with Compaq's corporate user base, Pfeiffer said. The changes will start immediately with the US and the Australia the first geographies to move to a model where customers order and the channel fulfils those orders, said Pfeiffer.
"The indirect channel remains our primary means for delivering products and services," he said.
"Compaq is investing in our channel partners to enhance their ability to provide these value add services. We're substantially increasing the size of our large account sales force and reseller support teams. Our key resellers fully support our optimised customer delivery initiative."
But Pfeiffer's plans may not be so easy to implement in the UK. A representative from the company said: "We won't implement Direct Plus in the UK. We want to do business with a large number of Vars and recruit 1,000s more across Europe."
Pfeiffer claimed that Compaq had succeeded in its bid to reduce the total cost of ownership (TCO) for its corporate customers. "For every 1,000 PCs you save $1 million in total cost of ownership each year," he said. "These savings were generated by the use of Insight Manager and Intelligent Manageability alone."
Andersen Consulting, he said, were able to achieve a 45 per cent lower total cost or annual total cost savings of $3 million for every 1,000 PCs." Compaq is committed to setting "industry standards" for the Internet, he said. "More than 90 per cent of the top 200 companies on the Fortune 500 are either already running an Intranet or will do so this year," Pfeiffer said.
Compaq would help grow that process by giving fast and reliable connectivity and enable the infrastructure through partnerships. He said Compaq was embarking on a leasing and financing operation with the first stage rolled out in mid summer. The Compaq Capital Corporation will at first offer basic leasing and financing but will also offer per seat financing, technology rotation and refresh and asset management," he said.
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