IBM To Eliminate Channel Sales Field Reps

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IBM is eliminating its channel field-sales representatives in its Personal and Printing Systems Group and instead will assign telesales reps to U.S. solution providers, a move that some solution providers say could damage their relationship with the vendor.

The field sales change comes after IBM reported a $17 million loss and a nearly 32 percent revenue decline in PCs and printing systems for fourth-quarter 2001. In the quarter, IBM posted sales of $2.9 billion for PCs and printers, compared with $4.3 billion a year earlier.

About 20 field reps nationwide will be affected, channel sources said. IBM's channel sales reps called on the vendor's largest U.S. solution provider accounts, which will now be assigned telesales reps in Toronto.

The move caught some solution providers off guard. "If they phase [channel field-sales reps out, customer satisfaction will suffer," said one channel executive who asked not to be identified. "Now Compaq, HP and even Dell will have more field sales reps than IBM, and I'm afraid IBM will lose account control. It's easy to go someplace else [to another vendor."

Frank Vitagliano, vice president of worldwide distribution channels for IBM's Personal Computing Division, said the move won't curtail IBM's channel sales support. "We'll have a telecoverage model put in place in addition to our end-user field sales force," Vitagliano said. "We believe that the combination of our end-user field reps, who will be engaged [with solution providers on a transactional basis, and our telecoverage teams, who will have business partners assigned to them, will give us a more comprehensive coverage to all of our second-tier partners than we had in the past."

An IBM spokesman said the company is calling its revamped channel-sales support organization the enhanced IBM PartnerChoice team. As part of the reorganization, IBM is changing the compensation for its channel sales force so that IBM sales staff will be compensated for a VAR's total IBM Personal Computing Division purchases, including purchases by a VAR from an authorized distributor. This new model is designed to reduce channel conflict between IBM's Authorized Distributors and IBM PartnerChoice (IBM's VAR Direct) program, the spokesman said.

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