Dell delves into channel

Direct vendor recognises value of resellers to make headway in services market

Direct vendor Dell has finally recognised that using the channel is the best way to attack the services market, by admitting it will use resellers and system integrators for consultancy and integration.

Late last month the vendor stalled plans to reveal its widely anticipated services strategy.

However, it is currently recruiting VARs in the US to act as services partners in enterprise accounts.

Under the US strategy, resellers receive up to a seven per cent cut of product sales.

A Dell representative confirmed to vnunet.com's sister title Computer Reseller News: "There is a similar strategy in the UK, but we cannot confirm any specific details."

Industry watchers have said the channel is vital if Dell is to protect its market share, but admitted Dell could still face challenges.

Anthony Miller, analyst at Ovum Holway, said customers want more than just assembly when they buy a PC.

"Although Dell is in no danger yet, it risks losing market share as competitors and resellers wrap services around product sales," he said.

Miller added that Dell should build a small services capability to support resellers because "firms such as Computacenter can put together a more compelling proposition".

Mike Gill, chairman at Hewlett Packard (HP) reseller European Electronique, said: "Dell dallies with the channel from time to time, but I would always question it's commitment."

Gill added that companies such as HP and IBM are more reliable. "Most of Dell's staff are direct salespeople and this seems a recipe for resellers to be hurt later on," he said.

According to Gill, Dell will struggle to attract UK resellers away from rival vendors.

Although sceptical, Steve Derbyshire, managing director of reseller Telamon, said that if Dell created a services capability just to support the channel it could be an interesting alternative.

However, he warned that the vendor must stick to its guns. "If it starts to compete by doing direct services, it could get messy," he said.