Dell has said it is to launch its own range of networking products later this year in the UK, after confirming that Cisco has ended its US reseller authorisation.
"Effective 27 September, Dell will no longer be a Cisco authorised reseller [in the US]," Dell said in a statement.
Industry watchers said Cisco's decision has been triggered by Dell's intention to expand its own networking products, and that Dell does not fit in with Cisco's value-added channel model.
John Chambers, Cisco's chief executive, warned last month that competition from players new to the market, such as Dell, will be fierce. Dell has shipped a million ports of its PowerConnect LAN switch in the US in just a year.
George Sanger, sales and marketing director at Cisco reseller Xpert Systems, said the decision removed a major competitor from Cisco's channel because Dell had the ability to price competitors out of the market. "That is [Dell's] strength because of its size, whereas our strength is value-add," he said.
In the US Dell sources networking equipment direct from tier-one vendors such as Cisco, Nortel, Extreme Networks and Enterasys. However, Dell may still be able to obtain Cisco equipment from Ingram Micro, its source for networking kit in the UK, sustaining the threat to UK networking resellers.
Dell's own networking products are not yet available in Europe but market watchers expect the firm to make the move shortly. Keith Humphreys, an analyst at EuroLAN Research, predicted a UK launch would come before the end of the year.
However, Nortel said it would continue its relationship with Dell. Peter Finter, director of channel strategy and support, EMEA, at Nortel, said: "Dell is complementary to our channel targets at the smaller end of the market.
"Our resellers sell in the mid-market. It's interesting that Cisco sees Dell as an alternative for its products."
Earlier this year Hewlett Packard (HP) stopped supplying its printers to Dell because it intended to manufacture products rivalling HP's own line.
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