Big names bully the channel

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Comment: Software and hardware companies are starting to get beyond themselves.

Over the last few months there has been a sea change within the PC industry where the big names are suddenly starting to call the shots.

Names such as Microsoft and Google, which only have a passing interest in hardware have been setting up their own channels to make the kit.

Intel steadfastly decided to create its own product, the Ultrabook, and push its OEMs to make it according to what it wanted.

It is as if the big names, when faced with a slumping PC market, and the only thing actually making money is the gadget end of the market, are starting to get more uppity.

It is a collective insecurity complex which has forced a long standing division between product makers and the channel to be highlighted.

When the big companies get insecure, they start to order people around. The more they order people around, the less likely they are to understand what their channel partners are telling them.

The Ultrabook is a case in point. With the rise of the tablet, Intel did not sit down with its partners and say, what is the best way we can deal with this? Instead it decided that the future would be the Ultrabook.

It set out a spec and even a price which its partners have been struggling to meet. While it is heavily marketing the product, it is not necessarily something that any customer wants or resellers want to try and sell.
Much has been made of Intel’s attempts to order hardware partners about, but equally by having a vision of what everyone must do, it is effectively telling its channel what it thinks will sell.

This appears to have been copied by Microsoft and its rival Google. Google hit the headlines by releasing its own cheap and cheerful tablet the Nexus. It claimed that this was a reference design which cash strapped OEMs could copy, however it had features which created a change in the way tablets will be sold.

Firstly they would be smaller and secondly they would be cheap. This was something that was never previously decided by the software company. It used to be hatched out in a plan between the OEMs and their channel. While its channel players might not be moaning, because sales of the Nexus went through the roof, it could have gone very badly and left heavily stocked warehouses.

Microsoft’s own approach has been similarly heavy handed. It seems so desperate to make its new tablets work, it could not really be bothered waiting for anyone else to jump on board. Redmond has been doing this a lot lately and forcing its manufacturers to conform to very tight design specs.

From a reseller point of view it makes products very similar and hard to sell. Time will tell if Microsoft’s approach works as well as Google’s.

It does not take much to look behind the cause of this heavy handed behaviour. For the last five years the big names have been eclipsed by Apple. Apple is a famous control freak and constantly imposes its views all the way down its supply chain. Intel, Google and Microsoft might see this and think that since it has worked for Apple, it should work for them.

However in this case they would be missing the point. Apple has always been like this and for years being a control freak placed its technology in the backwater of IT. If Apple thinks about it, if it had loosened up its grip in the 1990s and developed a more open channel, allow Apple clones, it would have control of all markets instead of just the mobile one.

While the PC market is on hold for a few more quarters, controlling behaviour from the big companies has to be tolerated. But when the pendulum swings back, the channel will return to prominence and will be more confident about telling them where to shove their brilliant ideas.


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