Microsoft partners to push midmarket sales

 Expanding its push into midsize companies, Microsoft has given one of its distributors that is focused on that market exclusive rights to resell special versions of some of its server software products.

Distributor Avnet Hall-Mark, a unit of Avnet, is the only company in Microsoft's OEM (Original Equipment Manufacturer) distributor channel authorized to sell OEM versions of Application Center 2000, BizTalk Server 2002, SQL Server 2000 and the Microsoft Internet Security and Acceleration Server (ISA), Microsoft said.

The OEM versions come with tools that system builders use to install the products, and they must be sold installed on a server. The OEM versions offer certain "cost advantages" to the distributor and its VAR (value added reseller) partners compared to other versions of the products, an Avnet official said, although he declined to elaborate.

Avnet works with about 2,500 VARs in the U.S. that target primarily midmarket companies and small enterprises, which it defines as companies with annual revenue of between $50 million and $1 billion.

Microsoft hopes to triple the amount of business it does through Avnet in the first year as a result of allowing it to sell the server products, said Pip Marlow, a director in Microsoft's U.S. partner group. The amount of business Microsoft does with Avnet is "in the millions" of dollars per year, she said, declining to be more specific.

With many large enterprises closely watching their spending, many IT vendors have been looking to the largely untapped midmarket as a way to increase sales.

"Avnet has a very specific focus on the midmarket and we selected these products because they are products the midmarket wants to use," Marlow said.

Avnet Hall-Mark offers technical, financial and marketing services along with the systems it offers, allowing its VAR partners to create more appealing offerings for midmarket companies, according to Doug Bell, director of strategic business development for Avnet Computer Marketing, the Avnet group that Avnet Hall-Mark falls under.

"The OEM license allows us to work with our partners and give them a full solution that they can take to the market," Bell said. Avnet has exclusive U.S. distribution rights for OEM versions of the listed products through the end of this calendar year, he said.

This is the first time Microsoft has signed an agreement with an OEM distributor to resell these particular products through the OEM distributor channel, Marlow said. Microsoft's OEM distributors typically sell its Windows operating system for use on clients. Similar arrangements could be made with other distributors outside of North America, she said.

Large Microsoft partners such as Hewlett-Packard and Dell Computer, which are considered "direct" OEM distributors, have already been selling the products that Avnet is now authorized to distribute under OEM license. But the deal with Avnet is significant because of the distributor's edge in the server market and its strong presence among midmarket companies, a Microsoft spokeswoman said.