Should we open the gates to Dell?
- 18 April, 2007 22:00
Rumours and news surrounding the king of direct sales, Dell, have reached lahar proportions lately. The return of CEO and founder Michael Dell in the US, seems to have kicked some life into old faithful.
First off, Dell has announced the discontinuation of its Axim line of handhelds and has vowed never to return to the market. That is according to US spokeswoman Anne Camden. OK, we can understand this one; Dell has never enjoyed much success with its handheld line. The latest model in the series saw the light in mid-2005, and nothing much has happened since. Granted, personal organisers have been in trouble ever since smartphones took off in the market.
This brings us to the first rumour. Dell appears to be a likely suitor in the Palm saga and the company is heavily tipped to purchase the smart phone company. According to analysts, Dell is looking like it will release a smartphone later this year, and what better way to do that than to piggyback on Palm’s reputation? Loyal to the fairytale plot, it is also rumoured that Dell will have to fight off the dragon that is Nokia for a piece of the Palm pie.
In New Zealand and Australia, one rumour has continually resurfaced in the last few years. Will Dell finally see the light and start selling through the channel? A few analysts, including IDC New Zealand, seem to think so.
However, there is a question as to whether resellers would be willing to work with a company they have long considered as the antithesis of all things channel.
Would Dell succeed with a possible channel model? The success of HP and Lenovo suggests it would, but there are obstacles to consider. Organisations looking for the full package and complete solutions have traditionally steered clear of the direct vendor, and any overnight decision to go through the channel would be regarded with suspicion. Resellers would be wary, as Dell could just as easily retreat back into its cave and take some lucrative deals with it.
The possible death of the massive direct sales model is becoming a wolf in sheep’s clothing story. With little to separate channel and direct, and the possible opening of a direct market that is faltering, yet resonably robust, there are bound to be casualties. Not only would Dell have to open up to the channel, but the channel would have to open up to a direct market. That is a proposition some faithful channel vendors will have a problem with.