Dell set to enter Layer 3 market

Strategy will undercut rival vendors and bypass resellers

Six months after entering the UK market for Layer 2 network switches, Dell is about to offer Layer 3 products as well as Gigabit Ethernet networking equipment.

Dell's strategy looks certain to undercut rival network vendors and bypass resellers as it reinforces commoditisation in this sector of the market.

But Gary Radburn, product marketing manager at Dell's networking group, acknowledged that to get traction in the Layer 3 space, Dell needs to beef up its networking expertise.

"We would need to have more support infrastructure for Layer 3," Radburn said.

"You need to have internal staff that sit side by side with the customer to design projects. That's a level we have not had here."

Resellers agreed. "It's not off-the-shelf box shifting, particularly with Layer 3 switches," said Ginny Thomas, marketing manager for systems integrator StarWand.

"Cost is a factor, but if the network is not properly designed, the cost of the error would be far higher than [the saving from] buying cheaper switches."

Des Lekerman, managing director of reseller Eurodata Systems, said: "I would not be worried about anything from Dell apart from servers, desktops and storage, because Layer 3 switching is all about services.

"When a customer buys a switch it is part of a wider solution and if they use more complex stuff they will chose someone like Cisco.

"I think Dell will be successful in the small-business sector only where customers want a small number of switches at a low price."

Keith Bird, channel director EMEA at Extreme Networks, said: "We sell only through the channel because it is hard for any vendor to sell this type of product direct for two reasons.

"First, it's a solution sell that needs some kind of integration, and second, because the resellers have a high level of skills and can solve complex issues."