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Get out of consumer business, he says

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Bridging the IT gap between rising business demands and ageing tools

Thomas Bauer, Microsoft regional OEM director for EMEA, took time out from the Integrator Forum Europe 2000 in Monte Carlo to tell Linda Harrison why system builders need to quit the consumer market, and about the vendor's plans for its tier II OEMs.

Dump your consumer sales and get into the business market if you want to survive.

That's the opinion of Thomas Bauer, Microsoft regional OEM director for EMEA, who recommends get big, get specialised, or get out of consumer sales.

He believes: "It's black and white - get out of the consumer business. Only the big system builders, or those who have developed targeted PC packages, will survive in this market."

According to Bauer, it is system builders like Tiny and Time, who have developed PC packages aimed at different groups such as students or Internet users, that have got this market sussed. "But if a system builder is just a shipper of mass units on the consumer side, I don't think they will survive," he said.

Bauer believes that big companies like Tiny and Dixons have got the market sewn up to a certain extent because they have done their marketing so well that consumers automatically think of these names when they decide to buy a PC.

The opportunities lie in the business to business sector - "The system builders' strength has always been that they could add services to the PC - and in this area they really can make a profit. They need to look to extend their business with services such as networking, Web integration and IT support," he said.

Regarding tier II system builders, the vendor's plans to sell direct to these OEMs - revealed here yesterday - will start as early as June. The scheme will let OEMs shipping at least 3000 units per year choose to buy either through distribution or direct from Microsoft. According to Bauer, this will be a worldwide scheme.

"It is linked to the fact that we want to get as close a relationship with this level of system builder as we can. We need to have an account manager relationship with them," he said.

"We doubt our distributors we have in place are able to do that - they are very diversified in what they do."

System builders taking up the offer will get the opportunity of joint marketing programmes and Microsoft will share support costs.

But there are "no plans at the moment" to expand this scheme to smaller OEMs - Microsoft will still rely on distributors such as Ideal Hardware and Datrontech to ship software to tier IIIs.

"We need the distributors - they are very important partners to us. But it is important that we have a closer relationship with system builders," said Bauer. ®

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