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March 17, 1987

DEC’s SMALLER RESELLERS MUST GET KIT FROM DISTRIBUTORS

By CBR Staff Writer

At a time when it has won a precarious lead over IBM in its heartland of mid-range systems, Digital Equipment Corp is behaving in a disconcertingly aggressive and cavalier manner towards its resellers, and its latest move in the US is to tell those that buy less than $500,000 of DEC kit a year that it can no longer be bothered to deal with them direct. Instead, they will have to go for their equipment to one of the five big US Industrial Distributors. The means of imposing the new cut-off is to tell the resellers that it will not grant any discount on kit worth less than $500,000 a year. The business represented by such small resellers – thought to total about 800 – is estimated at $120m a year, reports Electronic News. The five Industrial Distributors, who serve mainly engineering and scientific OEM customers, are Avnet, Ducommun, Pioneer, Lex and Wyle Laboratories. The switch will be brought in over six months, coming into effect in October when existing contracts run out. The business done by the five is put at $200m this year when the value-added reseller business is added in, and is tipped to grow to $1,000m by 1990. Never mind, says Wyle Laboratories consolingly to the resellers we’ll give you just the same discounts as you were formerly getting from DEC.

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