Microsoft weighs OEM distribution options

Microsoft weighs OEM distribution options

Microsoft has not yet decided whether it will replace one of its two OEM (original equipment manufacturer) distributors, Black Diamond Technologies (BDT), but has had interest from at least one potential distributor.

BDT has distributed the products under its electronics division, which is set for closure on 31 March. The second distributor is Ingram Micro.

Microsoft OEM director Nicola Ferguson confirms BDT has given 90 days notice to end the agreement, but says her company hasn’t yet decided on its future OEM distribution model.

She says the decision will be made based on “what’s best for the health of the channel”, and is continually talking to partners, so will be able to get their input.

Microsoft has heard concerns from partners that sole distribution could result in price rises, due to a lack of competition, Ferguson says.

Dove Electronics says it could potentially be interested in the distributorship and says there have been discussions with the software giant. General manager Chris Rycroft says Dove already has a good relationship with Microsoft and it could be extended.

BDT general manager Ken Lilley says in his view Microsoft would not pursue sole distribution. “It’s not an American model,” he says. However, he describes the dual model as a “double-edged sword”. “They [Microsoft] get to keep their pricing competitive by having two distributors, but on the other hand these two distributors have their margins eroded.”

Express Data general manager of sales and marketing Paul Plester says his company has discussed OEM distribution with Microsoft in recent years, but says it is not the distributor’s specialty. “We would consider it if it helped out Microsoft and if we could contribute some value add, but my basic inclination is we wouldn’t be able to.”

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