Microsoft To Merge Systems Builder, OEM Groups

Later this year, Microsoft plans to combine its systems-builder channel and OEM divisions into one organizational unit, company officials said today.

The Microsoft System Builder has catered to partners both large and small who build unbranded and branded white-box systems, including the hardware and software components. Its OEM organization works with the largest, high-volume hardware manufacturers, such as Hewlett-Packard, Dell, IBM and Lenovo. Because of their market share and high volume, these OEMs have been the beneficiaries of more attractive pricing and discounts on Microsoft products—a perennial sore subject for smaller systems builders.

Microsoft officials said that combining the groups and resources allocated to each will enable it to better support both constituencies.

The plan to merge the two Microsoft organizations is set to occur at the start of the software giant's new fiscal year 2007, which begins July 1, according to Microsoft officials. Leading up to this change, Microsoft has been investing in several systems-builder specific areas, including a host of marketing resources, along with a campaign called "Buy Local" that is being rolled out to 11 additional countries in the next few months, officials said.

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Scott Di Valerio, who is currently corporate vice president of the OEM division, will head the newly singular entity. Kurt Kolb, who runs the systems-builder organization, will assist Di Valerio with the transition, although Microsoft officials did not say what role Kolb would have going forward.