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Microsoft reviews OEM distributor contracts

Paul Kunert

Microsoft is currently reviewing its business relationships with OEM distributors in the UK amid suggestions in the channel that the tougher trading climate could result in partners being cut from the fold.

The software behemoth has met with five of the eight partners and the process should be concluded in June but Simon Aldous, partner manager at Microsoft refused to rule in or out rationalising its base of wholesalers.

"We will make the decision based on whether we have the right capacity, capabilities and competencies [among our OEM distributors]," he told Microscope.

Current distributors include Northamber, Micro P, Westcoast, Enta Technologies, Bell Microproducts, Ingram Micro, Computer 2000 and VIP.

The key challenge for Microsoft's OEM business has been the near collapse of the system builder market in recent years with PC assemblers putting together fewer boxes, becoming hybrids that also resell or moving into pure reselling.

However Aldous said it also needed distributors that were close to the e-tail community that sell OEM licenses through the Office Ready PC programme.

"We need to ensure we have coverage in terms of how licenses are sold but we also need to ensure that we can offer enough credit capacity in the channel to fulfil the requirements of all resellers buying this type of license," he said.

Alex Tatham, sales and marketing director at Westcoast, said he had concluded the quarterly business review and was very positive about the outcome though he declined to comment on any potential consolidation in Microsoft's channel.

Privately - and perhaps unsurprisingly - others want Microsoft to reduce the number of OEM distributors it uses and reckon up to three could lose the franchise to reflect the smaller market, but they will need to wait until June to discover the decision.

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