Dell Canada’s channel challenges

Dell continued major restructuring initiatives at the onset of 2008.

With the loss of its number one market share position in the PC market in 2007, Dell was faced with the necessity to streamline operations. The efforts, however, haven’t hit their Canadian head office, as of yet, but have affected its Canadian call-centre activities.

In February, the organization announced plans to close the Edmonton call centre, resulting in lay-offs of approximately 900 employees. The company also scrapped plans to open an expanded call centre in Ottawa which was intended to employ 1,200 agents.

The diminished ability to service existing customers raises questions as to how Dell will improve its operations. If its business increases, customer service demands will increase. Without the call centres, how will Dell service its customers effectively?

A couple of strategic initiatives might be in order. Including, establishing call centres elsewhere, perhaps in less-expensive regions, or expanding existing centres. Another option is to shift the way in which it reaches customers.

And with that, Dell unveiled its “PartnerDirect” program in Canada on Feb 12, 2008. Initially targeting 2,000 partners, time will tell how traditionally channel-friendly organizations such as HP and Acer respond to this industry disruption.

This shift could benefit the solution provider channel. Here is how as I see it.

Enables solution providers to offer customers another vendor’s products;

Offering another vendor increases competition, which is an activity that traditionally benefits end-customers;

Resellers might have the opportunity to increase revenues through offering Dell’s services.

Increased competition is often feared and avoided by vendors. For solution providers who have partnered with ‘traditional” reseller friendly PC vendors, the challenge for years has been competing against Dell’s aggressive pricing. As Dell restructures and streamlines its business practises, which is necessary for its growth, solution providers will have increased options available. IT departments should benefit from this industry shift. Hopefully partners and vendors will too.

Michelle Warren is a senior analyst for Info-Tech Research Group of London, Ont.

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