Computer 2000 has slammed Novell by labelling the software maker as “not channel-friendly”. Novell recently dropped the IT distie and has warned other UK distributors to pull their act together or face being axed by the firm. However, C2000’s UK software boss James Reed told The Register that he wasn’t bothered about losing the …
Why have distribution at all?
A very good question to ask during this "realignment" of distribution is why is Novell in disty at all?
They do not offer any products in a retail box or physical media, it is all download based via Novell's Customer Center portal.
It's the same question I've asked them many times, what value add does distribution have to the model. Little to none I'm afraid. Other than someone to confirm part numbers before placement, distribution has very little offer Novell. And because the bulk of Novell's business is via license contracts such as the MLA which are often fufilled directly by Novell, there is very little incremental revenue available to the disty partner.
Novell has attempted to push these larger contracts into distribution, but with the piddling 1% profit margin obtained on the MLA contract, it is actually cheaper for the partner to push the deal direct to Novell than to place the order at distribution and fund the costs for 30-60-90 while waiting on payment.
Disty is not providing high value add in these cases and is simply a relic of the old physical media requirements which is costing Novell and it's partners margin and profitability these days.
I can taste sour grapes
"He said customers weren’t really chasing the software maker’s products"
Really? Suse linux was doing nicely in corporations last time I looked.
Another side to the story...
More likely Novell got fed up with C2K doing nothing to provide value-add on their products.
C2K reduce everything to a commodity and sell it at it's lowest price point. They seem to have no interest in becoming a product champion or extension of their vendors and vendors don't like their products devalued.
Novell's not the only one.
Here in the USA, Novell and others are bypassing their distribution channel partners with direct deals. There just isn't any profit margin left to maintain the old business model. No one makes money on Microsoft products either so it is only a matter of time before MS pushes a direct sales model.
- Analysis UK.gov's Open Source switch WON'T get rid of Microsoft, y'know
- Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
- The END of the FONDLESLAB KINGS? Apple and Samsung have reason to FEAR
- Put down that Oracle database patch: It could cost $23,000 per CPU
- Microsoft confirms secret Surface will never see the light of day