Microsoft revealed on March 21 that it is folding its System Builder unit into its OEM division, to make better use of shared resources.

Scott Di Valerio, corporate vice president of the OEM division, will lead the combined OEM division, which will take shape during the course fiscal year 2007, which begins July 1.

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The merger, which has been in the works for many months, according to a Microsoft spokesperson, will allow Microsoft to share resources across both units.

"The combining of Microsoft's System Builder and OEM groups brings together the resources of each group to further Microsoft's commitment in delivering the best programs for the broad range of local OEM solutions partners," a Microsoft spokeswoman told The Channel Insider.

Previously, Microsoft system builders, which manufacture "white boxes," often custom-configured for customer orders, sat within the Small Mid Market Solutions & Partners (SMS&P), until they reached a certain volume and were graduated to the OEM division.

Microsoft OEM partners, which include the largest PC builders (such as Gateway and Dell) and about 300 "named accounts," produce PCs and notebooks configured with Microsoft software.

System builders will receive the same support previously, but from the combined unit, Microsoft said.

Microsoft recently announced 1,000 system builders had enrolled in its OEM Hardware Solutions Competency, launched in November to deliver internal-use software, branding and marketing materials to proven system builders. The software maker in February beefed up its "Buy Local" campaign to support small PC builders.

In November, Microsoft merged its Worldwide Partner and Worldwide Small Business Groups into the SMS&P unit, to improve synergies between those two organizations the Redmond, Wash., company saw as symbiotic.