Dell embraces the channel

In an apparent reversal of long standing policy, Dell has recently announced that it is to sell boxes through the channel.

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By  Guy Mathew Published  August 31, 2002

In an apparent reversal of long standing policy, Dell has recently announced that it is to sell boxes through the channel.

Or to be more precise, to the channel, because the company has said that it considers dealers to be potential customers rather than end users. The move applies to the US only, where it will sell D510 boxes without the Dell logo.

According to Banc of America analysis, Dell makes 22% of its revenues in the SMB sector so a move to increase it share of that sector should have a useful impact on its bottom line.

There are no plans for the move to be repeated outside the US as yet, but don’t bet against it happening here in the future if Dell likes the results.

The move is good news for the channel there because it shows that Dell recognises that it cannot reach all potential customers through the direct sales model.

It would be particularly applicable for the Middle East because e-commerce is not exactly well established and traditionally a high value is put on face to face (or F2F as some now want to call it) meetings. Dell has said that wants to target the SMB sector with this plan as it realises that a lot of businesses in that size bracket are not going to buy over the Internet and without support from a reseller they know.

The boxes will be cheap ($500) and come without monitors, but resellers will have a quality base to work from and be able offer their own specification. Dell often says that it sees white boxes as its main competition in the market, so this move will take the fight closer to that sector.

The decision can be seen a welcome boost for the channel after fears that Dell was setting a dangerous precedent for other vendors to follow by going direct. It is recognition that the channel has major role is getting product to market, even for commoditised hardware.

The uptake in certification and the overall skill levels of resellers these days means that the added value provided by the channel makes the chain from vendor to user crucial. If Dell, the paragon of direct sales has realised this, then resellers that are sharp can expect to reap the rewards. Let’s hope the company decides to roll out the programme in the region soon.

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