Corporate information technology buyers said they will purchase more this year and next from, most likely, their same channel, in primary research conducted specifically for EuroChannels 1994 by Computer Intelligence InfoCorp. From its permanent database of 90,000 sites throughout Europe, InfoCorp made 400 calls in England, France, Germany, to both pan-European and local enterprises and conducted interviews with corporate executives, data processing and information technology directors and finance executives in their native languages. The companies were segmented by industry (the survey does not include government or education sectors), size (from one to 499 employees and over 500 employees) and by the value of their system. Most respondents – 45% in France and Germany and 60% in the UK – said they would spend more in 1994 than they spent in 1993, said Michel Paulin, managing director, Computer Intelligence Europe, Paris.
Inkjet
More importantly, Paulin said the percentage of respondents who said they would buy the same or more than the previous year doubled when for 1995 over 1994. To that question, 95% of Germans and 70% of French users said 1995’s purchases would be equivalent or higher than 1994’s. In the meantime, for 1994, the most often cited technology on the list were local area networks, followed by printers and applications software, for which the number of buying intentions for application software doubled over 1993. Among printers purchased, Paulin said he believes that inkjet will be the leading technology in the next few years, with the overall value of the market remaining stable while unit shipments rise. The predicted increases were not so high for personal computers or mainframes, and France had the highest personal computer buying intentions. Furthermore, users are paying less attention to personal computer brands than a few years ago, says Paulin, it has dropped from 30% to 20%. Among brand-loyal users, he said, they now prefer Compaq Computer Corp over IBM Corp, while Apple Computer Inc remains stable. InfoCorp found three types of information technology buying structures and patterns among its sample – centralised, decentralised and what it calls IT community, said Robert Brown, Computer Intelligence InfoCorp president. With the last type, different operational groups handle their own computer-related purchases, while the central group is just a policy-making body. In Europe, two thirds of the sites were centralised, compared with only 40% in the US. Paulin noted that in France, purchasing is less centralised for personal computers and data communications equipment than it is for central servers and associated software. InfoCorp found that between 20% and 30% of the organisations surveyed in France and Germany had decentralised structures. Global companies have more decentralised organisations, Brown said. What clearly causes this decentralised organisation is the personal computer revolution, with people buying their own PCs and notebooks to meet their own needs and setting up networks, much to the chagrin of IT operations. Brown noted that upheaval caused by the change has resulted in the average life expectancy of a data processing manager in the US being only 18 months.
By Marsha Johnston
The IT community type has emerged in the UK, Brown noted. Among the sites surveyed, direct channels for personal computer purchasing are twice as important in the UK as in France or Germany and, correspondingly, value-added resellers and system integrators are nearly three times as important as in the UK. The dealer is most important in France, Paulin noted. The factors in choosing a personal computer channel and supplier are price, followed by reliability, InfoCorp found. Approved vendor lists are most important in France and the UK, with 40% and 35% of respondents, respectively, using them. In contrast, fewer than 10% of German users bother with such lists. At a recent industry conference, Ing C Olivetti & Co SpA chairman Carlo De Benedetti declared that, for the welfare of European industr
y, a fundamental change is necessary in the way change is viewed. In the US, he said, change is viewed as opportunity, while in Europe it is viewed as risk. In a perfect reflection of that difference, InfoCorp found that channel switching is much more rare in Europe than in the US. InfoCorp found that the majority of US corporations (67%) say no problem, we switch channels all the time. In contrast, the highest percentage of users who switch channels in Europe was found in France, at 26%, followed by Germany with 12% to 13% and, somewhat surprisingly, a miniscule 5% to 6% in the UK Price, said Brown, is the primary reason users in France and Germany switch. It is possible, he said, that French and German users will become channel switchers like their American counterparts. Years ago, the US, too, was largely a dealer market, then the direct marketers came in and slashed margins and others, like CompUSA, did private labelling, and channels proliferated, he said. In Europe, the dealer channel is smarter, but direct [marketing] is making great strides. Number one in loyalty in corporate America is Gateway 2000.
More trouble
Direct is far stronger in Pentium sales than with retailers or dealers. I believe users will also switch in Europe. Brown acknowledged that the dealer channel in the US reacted slowly to the threat of direct marketing, while European dealers are already restructuring their costs, which could mitigate the threat. In mainland Europe, direct marketers like Gateway 2000 Inc will have more trouble in getting the same quick success as in the US, due to the strength of dealers, also because dealers are beginning to recover from a shake-out in the industry, by putting in value-added services, Paulin added. During a panel discussion after the InfoCorp presentation, three representatives from the user community said the only thing that stopped them about using direct channels was a potential lack of service. We’re very interested in Gateway 2000 and Dell, in going direct, but we concerned about the service we’ll be getting, because our distributor is giving us good service now, said Gordon Dingwall, manager of resort systems and information services for Disneyland Paris, the shiny new name for the discredited EuroDisney theme park. Also, we want them to be in our vicinity, not to have boxes shipped from Ireland or Germany. We want to get the service benefits of a distributor but the cost benefit of going direct. None of the three users had plans to buy Pentium machines. We just don’t really need them yet, said Denise Desbarres, information systems department manager for Radio France. Said Dingwall, The PC platforms are moving so quickly, it’s enormously difficult to find the right moment to make a buying decision.
