BPsigns up Computacenter after axing 540 vendors


BPsigns up Computacenter after axing 540 vendors

Paul Kunert

Computacenter has lauded BP's decision to bypass a direct buying relationship with vendors and sign it up to a procurement deal that covers software and hardware over the next five years.

Under the terms of the contract, Computacenter will become one of BP's Global Reseller Partners to supply all its kit in Europe starting next month, while US bidding partner CompuCom will take care of orders stateside.

"This is BP saying that it wants to buy all its IT through the channel, it is a powerful message," said Mike Norris, chief executive at services led mid-market and corporate reseller Computacenter.

There are two reasons why some companies were rejecting direct approaches from vendors he added; the flexibility of the channel and a realisation among some end user businesses that vendors manage up the margin over time.

"I am genuinely less concerned about vendors going direct than I have been for years, a larger percentage of the market will be indirect in 2010 than 2009 and BP is a good indication of things to come," said Norris.

The appointment of Computacenter and CompuCom is designed to simplify BP's supply chain and the energy giant's Global CIO Dana Deasy said it plans to axe around 540 hardware and software suppliers including vendors and resellers.

"By consolidating and simplifying our IT supply chain, we will reduce our IT supplier base by at least 540 vendors [and resellers], and significantly remove cost while driving complexity from our operations," he said.

Steve Brazier, president at market watcher Canalys, argued that the channel was a more effective route to market than direct even in the heydays of Dell at the end of the 1990s and early 2000s as there were fewer users requiring a BTO service.

Falling average selling prices had also diminished vendors' ability to trade directly with customers he added.

"PC prices have halved therefore the margin has halved so the cost of selling direct as a proportion of the amount of money available on a PC has got higher and higher, which is why Dell has been struggling," said Brazier.

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