Dell makes fast friends in slow times

Once rivals, now best pals – Dell is further entrenching itself in the distribution channel by growing its PartnerDirect program through Ingram Micro and Tech Data. Though Dell may want to consider changing the name of its program, since it’s not exactly direct anymore.

Back in March, Dell announced it would start offering its Vostro desktops and notebooks, as well as multi-function laser printers, through the two disties in North America, although product has only become available in Canada this month. Dell also plans to expand the range of products offered through distribution in the coming months, which could include categories such as storage and servers.

When Dell first made the shocking announcement it would start selling through the channel, it had no plans at that point to go through distribution. So what’s changed?

Dell says it will still offer its configure-to-order capabilities for the channel through its PartnerDirect program, but some resellers need a faster turnaround – and that’s where distribution comes in. Resellers can call up Ingram Micro or Tech Data and receive product in 24 to 48 hours.

In Canada, Dell has about 1,400 channel partners. But there are still a lot of resellers who don’t deal with Dell, and distribution is the easiest way to reach those resellers. Globally, Dell has 35,000 registered partners, but it’s looking to expand that as well, particularly for reaching the SMB market where there’s less of a requirement for custom configuration.

To make this work, pricing will be a key factor, and Dell says the products available through distribution will be “competitively priced” with products available direct from Dell. The value for resellers, it seems, will be the ability to get product for customers in a day or two. There’s also a trust factor involved – some resellers who’ve never dealt with Dell in the past and remain skeptical of Dell’s commitment to the channel may feel more comfortable dealing with distributors.

Perhaps Dell is finally seeing that the benefit of distribution extends well beyond logistics (something Dell does well on its own). Ingram Micro and Tech Data bring a lot more to the table: credit capacity, technical training, specialized marketing expertise, complementary products and services, as well as program management. And a whole bunch of potential customers that Dell has never done business with in the past – both in Canada and in worldwide markets where Ingram Micro and Tech Data have an established customer base.

Not such a bad deal for Dell. And it’s not so bad for the channel either. No matter how you feel about Dell, it’s a major endorsement of the distribution model, from a major player.

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Jim Love, Chief Content Officer, IT World Canada

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Vawn Himmelsbach
Vawn Himmelsbach
Is a Toronto-based journalist and regular contributor to IT World Canada's publications.

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