International Computer Purchasing (ICP) has folded following a legal-dispute with HPE last year. The High Court awarded £1.95m to HPE after it concluded that ICP fraudulently obtained multiple discounts, in the region of £1.5m, on HPE products.
ICP denied they had broken the law.
The Grey market has long been a headache for major IT vendors which is a multi-million pound industry in its own right. The legal case has been a significant win for the industry and is one of many recent cases which has forced other similar organisations to either transform their business or go under.
Adrian Barnard, Industry Expert, MD & former CEO of The Change Organisation, (pictured below) commented “It shows how strongly the Vendors take these court cases against unauthorised distributors. These cases are on the increase and ‘grey brokers’ are disappearing from the market. We’ve seen in the last few months Gen X It & K IT go under.
Few ‘grey’ market providers offer anything other than a price differential. Consequently for many (and it has been proven so), unless they are buying illegitimately the business model is unsustainable. It is worth noting that resellers in the UK, who turnover to the tune of >£100m per annum, buy from ‘grey’ brokers and are aware of how the market works. Many of these resellers are unable to obtain registered stock from official distribution or are simply lowering their ‘official’ price by sourcing stock cheaper outside of official distribution.”
Barnard continues, “In my experience one can make a legitimate living in the wholesale supply space, as long as one sources legitimately and offers value to the reseller. Any supplier who starts playing outside the rules, let alone attempts to defraud Vendors, isn’t likely to survive.”