HP is terminating its Unix contract with Ingram Micro in the UK, causing further uncertainty in market already nervy after CHS Electronics folded so dramatically only a few weeks earlier.
HP is cutting the UK distributorship network from two to one, down to PSL only, and the move follows a similar culling of its US distributorships. Over the past few months HP in the US has ended its longstanding relationships on Unix hardware with Ingram Micro and GE IT. HP has only two US Unix distributors now, Hall-Mark Global Solutions and SBM/Gates-Arrow Distributing Inc.
John Young, HP's newly-appointed UK channel and partner manager said that HP has undergone a comprehensive review of its distribution channels over the past six months. It decided that traditional roles have changed and will continue to evolve as products become more complex and demanding of specialist skills.
"Ingram is excellent on our PC and printed products, but we are shipping from the factory to users in under a week and looking for more value-added, more focus on technical assistance and support... rather than stocking partners," said Young.
He said that the two distributors plus three directly controlled VARs constituted around 60 per cent of UK business, and HP intends to talk directly with resellers over the next few weeks.
He added: "The strategy is to drive more value to the reseller community, to maximise their margins by adding more value."
Like many mainstream suppliers, HP is feeling the pinch from low-overhead direct vendors such as Dell Computer Corp, and it announced in October that it aims to cut the number of servers being assembled in the channel by 33 per cent before the end of the first quarter 2000.
Ingram Micro UK released a statement confirming that the distribution agreement relating to HP's Business Customer Solutions Unix products will not be renewed. It stated that both companies are in discussions to ensure that there is no disruption to resellers.
Ingram said: "The decision follows a recent review of Hewlett-Packard's Unix business relationship with Ingram Micro UK that identified a degree of incompatibility between their respective Unix business models."
It continued: "Hewlett-Packard remains a strategic business partner for Ingram Micro UK and both companies will work closely to ensure the continued growth and success of all other aspects of their business relationship."
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