Dell feels the wrath of PC channel stalwarts

Top executives from PC and server vendors have hit back at the threat of direct manufacturer Dell, insisting manufacturers cannot afford to disregard the channel.

Joe Marengi, vice president of Dell and former chief executive of Novell, was at the twin IDC Systems Market and PC Market Outlook conferences in Santa Clara last week. In a debate on the future of the channel, he said: 'The key thing about direct is that we have a great relationship with our customers.'

But Ray Robidoux, vice president for optimised distribution methodology at Compaq, said: 'The message is, there is not one type of customer and there's no one size fits all. You need a choice of products and of delivery (methods).'

Janet Waxman, programme director at IDC, said: 'A multi-channel strategy works best, but it is also the hardest to manage. You will have conflicts and when you have them, you must address them.' She said Dell will need to find partners of its own if it wants to fulfil the needs of its more demanding customers.

But David Dukes, former president of Ingram Micro and president of the Global Technology Distributors Council (GTDC), warned: 'Anyone in this room who underestimates the importance of the reseller is about to make a big mistake. Most of the difference (in cost) between direct and indirect is in finished goods inventory. Most of that can be removed thanks to channel assembly.'

Dukes said the reseller-customer relationship was a powerful thing, adding that resellers may turn to brandless 'white boxes' if scorned by vendors.

'If vendors abandon the channel, the power of distributors to sell (customers) these white boxes is phenomenal,' he predicted.