IBM goes direct to Dell and back

The pot of gold at the end of the services rainbow has once again glinted in the corner of a corporate eye and caused partial madness. As other corporates re-affirm their commitment to the channel, IBM announces it is going direct in a vain attempt to inject life into its server sales.

There is no question the IBM Personal Systems Group (PSG) is watching its market share erode dramatically against Dell. But the answer is not to antagonise the channel by going direct. The answer should be to lean more on the channel. If IBM would find out what services and added value the channel can provide, surely that should do the trick.

But IBM seems to prefer the path of least resistance - in other words, let's make the same mistakes again. This is a shame, since the e-commerce programme is working well and deepening its market coverage.

Therefore, the new Netfinity Direct programme unveiled with much pomp and circumstance last week is doomed to the same volte-face that IBM has done before on direct selling. It will have to concede that distribution and fulfilment are not its only areas of expertise. Cracks are bound to show and that is not what the corporates that IBM is attempting to steal from Dell want to see.

IBM representatives are saying it will use resellers to give its services and deliver PC servers to most of its accounts, but it will deliver large orders which only involve one configuration to individual buyers when it is asked for.

This looks a bit like cherry-picking the juiciest accounts and leaving the reseller to scrabble with the complicated ones that don't deliver high margin returns. But I could be wrong.

This recognises one of the channel's secrets - and that is Dell's ability to work with the channel on orders where Dell cannot deliver. But at the end of this direct episode, little will have changed apart from rattling the reseller cage.

How the channel operates with large accounts will not change. The orders will be delivered in the same way and the channel will carry on deepening its expertise and service provision. Dell's server sales are worrying IBM. The vendor is doing well but is still seen as the underdog. The corporate buying pattern in the UK, is dominated by the conservative ethos which dictates that you buy an IBM or Compaq box through the channel because a decent reseller will give you support.

Dell is being hit by the inability of UK management to see beyond the headcount problem. IT departments are understaffed and service is important as they don't have the staff to fix dodgy desktop kit. So you are less likely to buy Dell. And that problem will hit IBM.

It will have to prove how fast it can provide the network troubleshooting it talks about in its Netfinity Direct scheme. If it means hanging on the end of a phone line then it's no improvement at all.