IBM and DEC have an uncanny knack of biting the reseller hands that feed them with monotonous regularity, and having upset its AS/400 resellers, IBM has done it again in the US with its new End User Support programme for personal computer users (CI No 1,326). IBM UK’s porte parole on the subject was not […]
IBM and DEC have an uncanny knack of biting the reseller hands that feed them with monotonous regularity, and having upset its AS/400 resellers, IBM has done it again in the US with its new End User Support programme for personal computer users (CI No 1,326). IBM UK’s porte parole on the subject was not available to say whether there are any plans to introduce the service in the UK, but in the US, it offers – for what sounds a steep $30 a month per machine – users of large numbers of personal computers – which can include Macintoshes and Compaqs or whatever as well as PS/2s – a high level of handholding that extends to the generality of third party software as well as the hardware. But that price – clearly pitched at what IBM thinks the market will bear, and which must be about what others are charging, indicates the size of the potential business, and how important it must be to the companies that currently offer such services. And those companies are the very ones that IBM should be wanting to keep sweet as spring water – the dealers that sell its personal computers. It is already clear that with the rampant discounting going on in dealer channels (CI No 1,328), there is going to be a bloodbath in the US computer high street and no-one is going to be making any money out of hardware, so IBM’s move is seen by dealers already feeling the pain as taking the very bread out of their mouths by entering the one business where they can make money, in particular with their precious large accounts, the very people at which the new IBM service is primarily aimed. Accor ding to the Wall Street Journal, IBM has tried to calm dealers’ fears by saying that the new programme targets only a narrow segment of the personal com puter market but it is the very segment of the market that those dealers that have survived the previous shakeouts have successfully tapped; and IBM has had to concede that the new programme may cost deal ers some business. IBM sells about 80% of its pers onal computers to dealers in the US and increased its unit share of the market to an estimated 35% in the first 11 months of 1989 from 31% in 1988, according to Audits & Surveys Co not least because it has been wooing dealers with attractive incentives and offers of training. This is putting us back almost where we were two years ago, Matt Fitzsimmons, a ComputerLand Corp dealer in White Plains, New York told the Journal. It’s really disheartening to be in competition with a manufacturer whose product we sell. But the net effect is likely to drive dealers into the arms of other manufacturers, led by Compaq.