Channel to Dell: choose one model
- 28 June, 2007 22:00
Texas-based Dell has made waves of late, with talk of the direct-sell specialist adopting a channel model. Many local channel-centric businesses are predicting that Dell will move towards an indirect sales model.
New Zealand would be a prime location for Dell to execute its experiment with this kind of model, as this country has a strong channel focus and a relatively small but technology-mature population.
Moving from a direct model is no easy task and many industry leaders seem to believe Dell would never drop direct sales as part of the business. This could lead to some problems with potential channel partners.
Dove Electronics general manager Chris Rycroft says Dell would find it hard to maintain both models.
“It is hard to imagine that the current direct model and pricing structure would be compromised significantly to facilitate a channel. Therefore any potential channel partners would be competing with the significant momentum that is Dell’s current business. The biggest competitor for Dell’s channel partners will in all probability be Dell itself.”
Rycroft also says Dell could have problems convincing the channel it is a supportive and committed partner for the long-term.
Axon CEO Scott Green says Dell would be unlikely to drop direct sales and thinks Dell would have a challenging but promising road ahead should it go through the channel. Asked if Dell would lose customers through a transition he says: “[Dell is] unlikely to lose any. They would gain some where the indirect model is preferred.”
Allan Maclean, managing director at integrator Maclean Computing, believes Dell is likely to enter the channel, but believes the company’s channel attempts will ultimately fail.
“They have no commitment to anyone but themselves.”
Maclean goes on to say that he would not deal with Dell if it sold direct and through the channel.
“We would not deal with Dell while they compete for our lunch by selling direct as well. They need to make up their mind, instead of half-servicing the market as they do now. You cannot run New Zealand from Australia.”
Dell’s main competitors, Lenovo, Acer, HP and Toshiba, were given an opportuntity to comment on how Dell’s entry into the channel would affect their business. None responded by deadline.