Dell Sets Sights On SMB

Dell, Round Rock, Texas, has reported several straight quarters of disappointing financial results and has been spending hand-over-fist—$150 million this year alone—to boost its services capabilities and get back in good graces with disgruntled customers. In the SMB space, Dell is seeking to take on aggressive rivals like Lenovo, Raleigh, N.C.

Company executives spelled out their SMB strategy during a conference call with reporters last month, in which they also pitched their new PowerEdge servers for deployment in small-business accounts.

"We fully recognize there is a set of small businesses that don't want to do that and they do want to work with solution providers," said Frank Muehleman, vice president and general manager of Dell's SMB division. "And we will work with solution providers. We like to work with solution providers who are going to add value to a company."

Dell has routinely worked with solution providers in the past, largely to provide installation and configuration. The company also has contracted with solution providers as part of its $6 billion-a-year enhanced services offerings. Its focus on working with the channel in small-business engagements is an indicator of the company's desire to simply leave no money on the table in that segment. But don't expect Dell, which has been struggling to keep its profits and revenue growth from declining, to come to the table with financial incentives for VARs.

"What we don't really want to do is provide large bulk shipments to a reseller who is simply going to break bulk and not add any value. If there is value added in that supply chain, we're open to working in a way that makes it easy for that end user to work," Muehleman said. "That said, I'm not really interested in creating a lot of MDF or co-op or incentive programs.

"What I'm really interested in is a customer-[driven] equation where a solution provider is adding real value to that customer, and we can work with that solution provider to provide a product that's configured," Muehleman said. "A product that could have the right software installed, that's customized for what exactly that customer needs."

Steve Seaforth, director of business development at Advanced Office Systems, a Cromwell, Conn.-based solution provider and Dell reseller, said his company's relationship with Dell has been a productive one in the SMB arena. "We're a perfect example," he said. "It's working well. We have cultivated the rapport over the last five years."

Seaforth said, "The only incentive Dell gives us is very good up-front pricing," but added that since many local businesses want the combination of a trusted local adviser for technology and a name brand, the synergy with the PC maker has become a good one.