Keep an eye on the cookie jar
- 22 March, 2007 23:00
Direct seller Dell’s recent loss of market share to Hewlett-Packard can be championed as a win for the case for having an indirect sales channel.
The merits of maintaining a strong channel filled with technology experts who often act as the de facto IT departments for their clients are especially strong in a market like New Zealand, where you are still expected to know the middle name of your customer’s pet llama.
However, it may be too soon to declare the channel as the overall victor in the battle for the hearts – and wallets – of this country’s CIOs, IT managers or anyone else who holds the IT-spend chequebook.
Sure, rumours abound that Dell is considering adopting a channel model and that it wants to open a first-ever retail store in the US.
And yes, HP’s broad base of resellers has undoubtedly helped it reap back market share from Dell.
However, it should be noted that HP’s growth in the last six month has been largely fuelled by robust sales of its consumer laptops in retail outlets.
This does little to help the majority of HP resellers who make a coin supplying New Zealand’s ubiquitous small to medium-sized businesses.
HP reckons there are around 300,000 SMEs in New Zealand who buy from retail shops and who could be well served by its resellers. But, reaching these users can be a hard task for channel players whose marketing budgets pale in comparison to the war chests of the likes of Harvey Norman, Noel Leeming and Dick Smith.
Moreover, Dell is not the only vendor selling direct to end-users in New Zealand. It is merely the only major PC maker that does not sell through the channel at all.
HP too sells services and hardware direct to enterprise customers. Across the ditch it offers an online store, as does Lenovo here, while Apple recently took over its New Zealand web store from distributor Renaissance.
While it may have been hard going for Dell, which has virtually no presence in this country, to maintain warm relations with customers here, a vendor like HP is more able to keep close to its local customers.
With 580 people on the ground here, HP can bring powerful resources to bear to both support and compete with its partners.
To be fair HP does support a large channel and regularly reasserts its commitment to its partners, and it is unlikely to stray from the channel path completely anytime soon.
But it pays to keep in mind that however Dell responds to its current predicament, direct selling will remain a feature of the industry. So protect your patch and keep an eye on the cookie jar when you have a vendor rep over for a cuppa…