JEVA VVO bna 1 V 2 šno. TAROK KM OVEN aa PA V EVA 2 VRTCI ZNANE ŠO aa OEM/SYSTEM% .....:'. EDITION Should vendors buy their software-rich oems?. THE DEC Al of these moves by its STATUS competitors to beef up their oem programs may 00 not be a threat to the num- ber one minicomputer supplier, Digital Eguipment Corp., a company official says. In fact, Brian Cranston, DEC's distributor program manager. claims it is reassufing to hear about all the new marketing support pro- grams other vendors are offering, for DEC has been making similar offers to select oems since it pioncered the »uthorized distributor concept five years apo o !b stay above the competition, DEC has just introduced a new program, in cooperation with a Madison Avenue advertising agency, to provide oems with assistance in devising advertising and sales promotion plans. "This is something our competitors are going to have a hard time copying," says Cranston, "IUs very easy to copy a discount sehedule and even go one better—you just change the number from 30% to 35%. lvsa (— "Come in. Have a snack. Have a drink. Talk to some people. Leave." lot harder to address the kinds of needs that our promotional planning program will ad- dress." Harry Beisswenger, president of Compute- R-Systems, a Plymouth Meeting, Pa., software house specializing in legal packages, finds advantages to participating in the DEC distributor program, in part because il is mature. An oem/vendor relationship, he says, ''is like a marriage; it takes a while to work out. It takes time for manufacturers to learn to deal with oems, and DEC has a lot of experience there." - Peter Lowber of the Yankee Group believes that DEC has a good track record in providing support to its authorized distribu- tors, but adds that ''they are expensive."" Cranston believes DEC's5 discounts are "pretty competitive."' The company now of- fers anywhere from 15% to 37% oft on the PDP-1 1 (with an average discount of about 30%), and up to 26% off on the VAX (averug- ing about 19%). 263-6 DATAMATION -oems into Says Lowber: ''[ think one problem that DFC has had is that it has pricing strate- gies that con! ' with its own sales force and its ocms. Some of DEC's oems can't sell the VAX because the customer base is going jo buy it from the direct sales force. Then what happens is that the direct sales force might discover that 'i< customer needs application XYz that has been developed by oem ABC. So iUll go to the vem and ofter it the software sale. The cem is not going to decline a sale, even though its not selling the VAX, so it ends up being more of a software supplier." Vendar interest in converting their '"aare houses, rather than full system pa. o<1x, is moving into a second phase that alarms some industry officials while it is welcomed by others. Hewlett- Packard, Lowber points out, recently bvught its second largest vem. ''It was probably a good decision in this case," he says, ''be- cause what HP pot out of it was a bunch of applications sot ware experts that understood not only how to develop software but also how to trat : sales force in support'ne that software. So i:4 company didn't just bring in a bunch of verucal applications software but also the ability to train a whole field staff to offer specialized support." Will other oems be acguired? ''JUs an interesting pruposition," says Horne at Prime, "but | think its a double-edged sword. Most of the software firms that have been acguired lately have gone at an extreme- ly high price. to-carnings ratio. The only time it may be worthwhile is in the startup phase, but then you have a real problem of how to keep the princrpal engineers interested in the product once they are ownced by a Fortune 500 company ' Many vems are egually skeptical. "1 could sec it happening."" says Ken Tratar at Systems Management, ''and it would foul everythine up. They're buying oems to buy their vertical marketplace . . . but they don't know the business. They look at an oem with, say. a particular piece of hospital software. and they say. 'Boy, well just buy that oem and make the product available to at! ot our people across the country to seli." And thaw's a fatal flaw, because the average computer salesman doesn't know anything about hospi- tals. Or the other hand, the oem people prob- ably vame from a hospital environment or worked very closely with a hospital to design their package and have the product knowl- edge to sell on a limited basis." Li Carol Fletcher is a Chicago-based free-lance writer with a special interest in technology and business topics. She formerly was an editor and reporter for several computer-related magazines. z CARTOON BY SID Y RARRIS.