IBM falls foul of direct sales as Dell nabs Mobil deal

Dell Computer has performed a coup de grace over IBM by winning a three-year hardware supply contract with Mobil worth $75 million.

The deal will establish the direct vendor as Mobil's standard global hardware supplier. Dell claimed it will reduce Mobil's corporate desktop IT costs by 25 per cent as the oil giant looks to narrow its corporate computing total cost of ownership and achieve year 2000 compliance.

The move comes as a blow to vendors struggling to compete with Dell's direct sales model. Last month, it won a similar contract to supply food giant Sara Lee in a global deal worth an estimated $60 million. Other global customers include Ford, Procter & Gamble and Boeing.

Some analysts remain sceptical of Dell's ability to sustain its surge into the global corporate accounts sector. Clive Longbottom, strategy analyst at CSL Consultancy Services, said: 'The market is moving from buying tin to buying solutions and you have to question Dell's ability to make that transition.

Terry Earnest-Jones, analyst at IDC, commented: 'I see nothing in the next 12 months to obstruct Dell other than controlling its own growth.

A greater emphasis on services may tax its resources in the long run.'

IBM refused to comment.