Channel dismisses Sir Philip Green's direct advice to coalition

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Channel dismisses Sir Philip Green's direct advice to coalition

Microscope contributor

Resellers and channel advocates have criticised Sir Philip Green's recommendation that government should buy commodity IT direct from multi-national corporations (MNC) as being overly simplistic.

A review team led by Green yesterday judged that the way central government procures technology needs to be overhauled by centralising the function and updating internal systems to monitor costs more effectively.

However, Computacenter chief executive Mike Norris, said advising the government to buy direct when the trend in the commercial sector was toward indirect was bizarre, adding "wake up, smell the coffee, look around you."

"The reason vendors like selling direct to customers is that over time they manage up the margin. The channel keeps the manufacturer honest and tends to be a lower cost route to market," he told MicroScope.

Part of Green's opinion was formed from the striking differential he discovered in the prices government paid for laptops - ranging from £353 to £2,000 - and the vast quantities the public sector procures each year.

Peter Robbins, managing director at Probrand, said the strategy of casting a private sector eye on public sector procurement should be commended but he had reservations about the direction Green was heading.

"He is perhaps over simplifying the uniquely volatile IT supply chain where price, products and stock change daily. Likewise customer needs change as quickly as the market in which they are looking to buy," said Robbins.

The review team's argument masked the point that the price resellers charge for technology comes with a raft of hidden value-adds that are not at first obvious to the customer but are built into the price.

"There are logistics, integration, imaging and the ongoing services that resellers provide, said European Electronique boss Yolanta Gill, "the margins the channel makes are very modest," she added.

There are clearly some inefficiencies in the procurement process said Canalys principal analyst Alastair Edwards but he insisted a direct sales relationship with vendor only worked in the largest corporate enterprise deals.

"The public sector is not a cash cow for resellers," he added.

 


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