KeyLink Vows To Keep Compaq But Pushes IBM

"I feel confident we will play an integral role in the new company going forward. We are absolutely committing resources to the new organization, the new HP," said Patrick O'Connor, vice president of marketing at KeyLink, a Cleveland-based subsidiary of Pioneer-Standard Electronics.

The outcome of the proxy vote on the HP-Compaq merger is not expected for weeks, but channel executives said KeyLink has put more focus on its IBM business than its Compaq business, perhaps to hedge its bets in case of a shakeout from the merger. KeyLink does not distribute HP servers.

One solution provider said KeyLink executives want him to pick up the IBM line in conjunction with the Compaq products he now sells.

"They're putting more focus on IBM than they are on Compaq," said the solution provider, who requested anonymity. "We're seeing less and less [Compaq support from those folks [at KeyLink."

AMC, a solution provider based in New York, is in the process of switching to Tech Data from KeyLink to source Compaq StorageWorks products, said Steve Israel, executive vice president at AMC. Israel said he has gotten better pricing from Tech Data on StorageWorks.

"Pioneer, for a while, has been trying to attack the Compaq base with IBM," said one distribution executive. "They're in an interesting situation. When we learn how HP-Compaq goes to the channel, I can't see [the new HP making Pioneer an [HP distributor right off the bat. That's not something you can just say and start tomorrow."

KeyLink said it provides the necessary support for all its vendor lines, KeyLink's O'Connor said.

"We're making resource commitments appropriately. If we are putting resources into IBM, it's because it's an area of growth, but it's not to the detriment of anything else," he said.

KeyLink's Compaq sales fell more than 50 percent last year, according to a source close to the distributor. Pioneer-Standard does not break out its sales by manufacturer, but O'Connor said revenue declined with most vendors in 2001. The distributor's sales are down 16 percent through the first three quarters of fiscal 2002.

"Clearly, it's been a challenging year for everyone. Throughout that, we retained the title of Compaq's No. 1 enterprise partner," O'Connor said.

Pioneer-Standard last week said it formed a storage-focused business unit and inked a deal with Hitachi Data Systems to carry the vendor's storage products.