Acquisitions of international distributors by US giants could threaten traditional smaller local channel operations, said analysts this week.
Two US distributors recently announced their intent to acquire European counterparts - Tech Data said it would buy Germany's Computer 2000 last week, quickly followed by CHS taking French based Metrologie.
If they get the required approval these takeovers will create global giants that could change the whole vendor channel relationship within three years, analyst organisation Gartner Group proposed at the company's Predicts'98 conference in Paris this week.
"The success of the US stock market is leading to globalisation [of channel companies] and the message is that being a local distributor is not sustainable," said Gartner analyst Steve Brazier.
The result of this global approach to channel operations could impact both European vendors and channel companies.
European vendors, such as Siemens Nixdorf, will look less attractive than US and Japanese vendors that can offer a global channel company a standard product range and recognised brand worldwide, he believes.
Independent national distributors and resellers may find themselves similarly squeezed out by global deals, as companies like Compaq and Hewlett-Packard give worldwide contracts to the new channel behemoths at the expense of larger national players.
"I am not sure that the idea of global IT vendors selling to multinational customers using local, privately run intermediaries can continue," noted Brazier.
The good news - small channel operations will still be able to offer more support and flexibility than global giants at a micro-regional level, particularly to small and medium enterprises. They may also be able to build on any period of instability suffered by the US behemoths during integration of acquisitions and further growth.
Tech Data, CHS and fellow US giant Ingram are listed on US stock exchanges, although CHS has minimal involvement in the US market. According to Brazier, the much greater capitalisation available to those companies from Wall Street has enabled them to fund their growth better than European counterparts and to establish them firmly as the big three.
GE Capital has been pursuing a similar approach, trying to build a global reseller operation, buying Ista in France and P&P in the UK since the start of the year. But some reports suggest it has been having trouble integrating, and retaining staff from, recent acquisitions - both factors reducing the expected return on recent investments.
Meanwhile, Ingram is to follow CHS's recently announced plan to set up a centralised distribution centre for language independent products, such as hard drives, network adapters and even printers, in Holland. The idea is to consolidate the amount of administration and warehousing required to distribute such products across Europe.
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