Northrop shuts down IT reseller business

Northrop Grumman plans to shut down its computer reseller division, according to a company announcement issued today. The company had previously announced its intent to get out of the reseller business.

According to the announcement, the purpose of the move is to sharpen the company's focus on its core business. The division, called the Enterprise Information Technology business unit, has about 365 employees, most of them based in Greenbelt, Md.

The announcement comes on the heels of trouble at GTSI, a rival reseller. GTSI's longtime leader, Dendy Young, stepped down from all duties but his chairman of the board position, and not long after that the company received a notice of default from some creditors and delayed its planned earnings announcement.

"After a thorough analysis of our options, we determined it was more advantageous for the company and our shareholders to quickly and decisively shut down the business," said James O'Neill, corporate vice president and president of Northrop Grumman's Information Technology sector. "We will continue to honor our commitments to all of our customers, suppliers and vendor partners."

Mark Amtower, a federal marketing consultant, said the news reflects growing dissatisfaction customers have for some resellers, as customers increasingly demand Internet-age responsiveness and customer service.

"It signals to me that the traditional reseller in this market is toast," he said. "The catalog reseller -- the leaner, meaner faster machine -- is it."