Channel News

By Richard McCaffery

InaCom Corp. of Omaha, Neb., reported record earnings of $42.6 million for 1998, or $2.26 a share, a 45 percent increase from the previous year. The IT distribution and services company had record revenues as well, posting sales of $4.3 billion compared with $3.9 billion in 1997.

Bill Fairfield, InaCom's president and chief executive, said in a statement that the company's focus on higher margin services business drove the growth.

InaCom's fourth quarter earnings didn't look quite as good. Income rose to $10.7 million, from $10.3 million the year before. But earnings fell to 55 cents a share compared with 64 cents last year. Revenues stayed flat at $1.1 billion. The company attributed the decrease to weakness in its reseller business.
Tech Data Corp. of Clearwater, Fla., is expanding its FactoryDirect program to include custom configuration of computer systems.

The move is part of a sweeping effort across the sales channel to better compete with companies like Dell Computer Corp., Round Rock, Texas, and Gateway Inc., North Sioux City, S.D. These computer makers skip the sales channel and sell products directly to end users.

Under the program, Tech Data, working from manufacturing plants owned by IBM Corp. and Compaq Computer Corp., will assemble computer systems to order, attach any reseller's label and ship them directly to end users.
Merisel Inc. of El Segundo, Calif., has set up an awards program for resellers that encourages them to buy products handled by Merisel.

The action is part of an industrywide effort by distributors to compete with companies like Dell by offering services, a wider range of products and incentives. The Summit Club offers resellers services such as reduced prices, dedicated account representatives, financial services and field sales support.

Resellers are placed in one of four Summit Club levels based on purchase volume. Pete Cannone, vice president of Merisel's value-added reseller program is in charge of developing the Summit Club by evaluating reseller needs and adding new services.

In related news, Merisel is expanding the number of products available through its Public Sector Solutions program, which is aimed at helping resellers sell products to the federal, state and local government markets as well as schools and universities.

Some of the new companies selling products through the program include Acer America Corp., Encore Software, Ramp Networks and TeleVideo Inc.

Merisel had 1997 sales of $4.5 billion. The company distributes more than 25,000 computer products and services to resellers in Canada and North America.
Hughes Global Services Inc., a subsidiary of Los Angeles-based Hughes Space and Communications Co., has won an indefinite delivery, indefinite quantity contract worth up to $100 million to provide federal agencies with satellite products and services.

Under the contract, awarded by the General Services Administration, Hughes will offer the government access to fixed, broadcast and mobile satellite services and equipment. All agencies can use the contract.

To make it easier to buy the products, Hughes is offering electronic commerce services from its Web site. Customers can read descriptions of products and services and fill out order forms online.
SAP AG's flagship product, SAP R/3, is now available to government customers through the General Services Administration's Financial Management Systems Software schedule.

Through the schedule, government customers will be able to purchase SAP's line of financial, human resources, logistics and material management systems software. SAP America Public Sector, a division of SAP, is based in Washington.
Lockheed Martin Corp. has added Compaq's AlphaServers to its General Services Administration schedule.

The addition will allow Defense Message System customers to integrate the Alpha line, which contains the 64-bit Alpha microprocessor, into their networks.

DMS is a secure message system being designed to replace the federal government's current messaging system. It is being deployed at over 280 military bases around the world and can support more than 400,000 users.