VARs Seem Unfazed by Lenovo-Office Depot DealBy John Hazard | Posted 2005-11-03 Email Print
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VARs, no longer relying on hardware sales, say they are unfazed by Lenovo's announcement that it will sell notebooks at Office Depot's 900 storefronts. Office Depot also intends to bundle it with its own service packages.
Lenovo International considers Office Depot just another of its partners.
The notebook computing giant expects to treat the retail chain like any other partner, offering the same benefits and resources to the retail chain as a route to a new marketSOHO businesses under 10 to 20 seatssaid Rick Noble, Lenovo's program manager of worldwide channel strategy and sales.
Office Depot, with more than 900 storefronts, however, is not likely to act like any other reseller, using its volume capability to drive down prices and bundle its service and warranty packages alongside the notebooks, partners said. However, the lot remains largely unfazed by the potential new competitor.
"It's not going to affect our business; it might affect our profits a little, but not our business," said John Bucknell, president of iPBX Systems Inc., a Lenovo reseller.
"They're not going to draw from the same customers; we're not interested in selling that small. But they are going to drive down prices, so we'll take a cut there."
Noble agreed that the target audience of the Office Depot channel is one beyond the current reach of partners.
"This is designed to go after the truly small office, the 10-desk and under," he said. "Those customers weren't going to VARs anyway. They want to touch and see the product before they make a purchase."
In a pilot program of the partnership, 25 Office Depot stores in Florida sold Lenovo products, and resellers had no complaints, Noble said.
Many traditional VARs are unconcerned about retail ambitions of vendors, said Matt Rindfleisch, co-president of Strategic Computer Solutions Inc., of Livonia, Mich., which sells Asus, a Lenovo competitor that has put a strong emphasis on services.
"We couldn't sell enough of it to pay ourselves, so we looked beyond selling the stuff to servicing it," he said.
"When people aren't running to your door, you look for a reason to keep the ones who do come coming back."
"Once they have the stuff, they have problems with the stuff, networks, spyware, you name it," he said. "Those things have been a great friend to IT providers."
Office Depot intends to sell its service packages alongside Lenovo products, Lenovo said, but the service offered shelf sales are rarely as fulfilling as those provided by VARs, Rindfleisch said.
Office Depot did not return calls to discuss the service packages.